Supreme Court of the Republic of Slovenia upholds IPS workers v. Luka Koper

In December this year, the Supreme Court of the Republic of Slovenia adopted a decision on the appeals of nine workers who had requested a declaration of the existence of an employment relationship and the recognition of their rights under the employment relationship at Luka Koper d.d. (Port of Koper).

The workers were employed by “port service providers” (IPS), companies whose only business partner was Luka Koper. They were in a contractual relationship with the company on the basis of contracts for the provision of stevedoring and other services, which outwardly constituted a subcontract under the law of subcontracting. In reality, the contracts were only fictitious, since the port service providers never provided any services to or for the Port of Koper, but merely provided it with workforce.

The workers were in fact working for the Port of Koper, under its full supervision, in its working process, in its premises and with its equipment. The work was carried out in this way over a long period of time, continuously, with minimum wages and long shifts. The average number of workers working in similar circumstances at the Port of Koper each day was between 640 and 700. In 2019, port service providers terminated the employment contracts of workers for business reasons due to the reduction in traffic with the Port of Koper.

The Supreme Court found that this business model is illegal. The port service providers did not comply with the conditions for the placement of workers under the Employment Relationships Act (ZDR-1) and the Labour Market Regulation Act (ZUTD), and therefore should not have placed workers with, and the Port of Koper should not have accepted them. It is also disputed that Luka Koper only cooperated with companies which did not fulfil the legal conditions for providing workers. Furthermore, the work of the workers at the Port of Koper was also of a long-term and continuous nature, but, in accordance with Article 163(3) of ZUTD and Article 61(1) of the ZDR-1, the work of a dispatched worker is only of a temporary nature. According to the legislation, the workers should receive at least the same salary and work under at least the same conditions as the workers formally employed by the Port of Koper. The port service providers and the Port of Koper abused the workers in this way, as they worked on a call-out basis, whereby they were told one day in advance where they were to report the following day and how many hours they would be working. They worked irregular hours, without respecting the rules on rest in labour law and, unlike the workers officially employed by the Port of Koper, they were paid minimum wage for their work. In this way, Luka Koper increased its profits by reducing labour costs.

The Supreme Court held that during the relevant period, the workers had a clandestine employment relationship with the Port of Koper, which externally transferred the employment relationship to other employers, but retained a decisive influence on their activities and employment, and in fact acted as the employer in the relationship with the workers.

In the light of all the foregoing, the Supreme Court of the Republic of Slovenia held that the workers were entitled to establish the existence of an employment relationship with the Port of Koper from the date of termination of their employment contracts with the port service providers. However, for the duration of the employment contract, the Supreme Court of the RS ruled that the Port of Koper was liable to pay the workers the difference in remuneration which they should have received under the relevant legislation.

The decisions of the Supreme Court of the Republic of Slovenia represent an important step in the story of the IPS workers, which has been in the media for a long time due to violations of their labour rights. At the same time, the decisions are crucial for the decisions in all the remaining IPS workers’ court cases that are still pending.

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