Changes to the Calculation of Length of Service: What Did the Constitutional Court Decide?
By Decision No. 17 of 20 October 2026, the Constitutional Court declared unconstitutional the amendments to Article 355(1)–(4) of the Labour Code, introduced through the 2026 State Budget Act.
The amendments provided for a new method of calculating length of service, including its proportional recognition in cases of part-time work. Although the amendments were adopted in 2026, the new rules were intended, in practice, to start applying from 1 January 2027.
What did the amendments provide for, why did the Constitutional Court declare them unconstitutional, and what are the consequences for employers and employees?
1. What was changing in the calculation of length of service?
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Practical example
Under a standard statutory working time of 8 hours per day, an employee who works 4 hours per day on every working day of the month currently acquires one full month of length of service.
Under the proposed new rules, length of service for the same period would have been recognised proportionally to the time worked — approximately half a month in this example.
The change was significant because length of service is linked to a number of employment rights, including entitlement to paid annual leave, additional remuneration for length of service and professional experience, and certain termination-related compensation payments.
2. What did the Constitutional Court decide?
By Decision No. 17 of 20 October 2026 in Constitutional Case No. 15/2026 and the cases joined to it, the Constitutional Court declared unconstitutional the amendments to Article 355(1)–(4) of the Labour Code.
The Court’s main reasoning was not that the proportional calculation of length of service is, in itself, contrary to the Constitution, but that the change had been introduced in a constitutionally impermissible manner — through the 2026 State Budget Act.
The Constitutional Court emphasised that the legislature has the power to change the method for calculating length of service, provided that constitutionally guaranteed rights are not infringed.
At the same time, amendments to other laws introduced through the State Budget Act must be directly related to the revenue and expenditure for the respective budget year.
In this particular case, the new rules on length of service were intended to start applying only from 2027. Therefore, they were not directly linked to the implementation of the 2026 State Budget.
The Court held that the budget legislation had been used to introduce a permanent and substantial change to citizens’ rights that went beyond the permissible scope of such legislation.
3. What remains in force?
It is important to note that the Constitutional Court did not declare the 2026 State Budget Act unconstitutional in its entirety.
With regard to § 46 of the transitional and final provisions, concerning the mechanism for determining the minimum wage, the Court dismissed the application due to subsequent legislative amendments and the expiry of the effect of the challenged provision. Accordingly, the Court did not rule on the merits of its constitutionality.
4. What does the decision mean in practice?
Once the Constitutional Court’s decision enters into force, the amendments to Article 355(1)–(4) of the Labour Code that were declared unconstitutional may no longer be applied.
This means that the proportional calculation of length of service for part-time work, which was intended to apply from 1 January 2027, will not take effect on the basis of those amendments.
For employers, the decision is relevant to the calculation and recording of length of service, the management of employment records, and the determination of rights that depend on length of service.
Could new legislative amendments still be introduced?
Yes. The Constitutional Court does not rule out the possibility that the legislature may introduce proportional calculation of length of service again in the future. However, any such amendments would need to comply with constitutional requirements both in terms of the legislative procedure and the protection of fundamental rights.
Key takeaway: The Constitutional Court’s decision prevents the implementation of the specific amendments that were adopted, but it does not preclude a future reform of the rules governing the calculation of length of service.
