Czech Republic: Conceptual Amendment To The Czech Labour Code

Last Updated: 22 August 2011
Article by Nataša Randlová

As a response to the 2008 judgment of the Constitutional Court of the Czech Republic, which has cancelled some provisions of the Labour Code, as well as to comply with the government's Statement of Purpose, the Ministry of Labour and Social Affairs prepared a conceptual amendment to the Labour Code. The proposal has been approved by the Government in June 2011 and it should be debated by the Chamber of Deputies in its July 2011 session. The effective date of the amendment is planned for 1 January 2012.

The purpose of this article is to summarise the most important changes which shall be brought by the amendment.

Invalidity of employment law acts

The proposal should, in some cases, explicitly stipulate the principle of absolute invalidity. I.e. some employment law acts would be invalid without necessity to contest their validity. Currently, only relative invalidity is applied to employment law acts.

Trial period

The length of the trial period should be changed for managerial employees. Managerial employees are those who are entitled to assign work to their subordinates, to lead and check their work and give them binding instructions. Those employees may agree with the employer on a longer trial period than in the case of an "ordinary" employee (3 months), amounting up to 6 months.

A new restrictive provision should be introduced, stating that if the employment relationship is concluded for a fixed term, the trial period may not be longer than half of the total agreed time of employment.

Employment relationship for fixed term

The maximum length of the employment relationship for a fixed term will be 3 years. However, it will be possible to repeat the employment relationship for a fixed term two times between the same parties (as repeating will be also considered extension of the current employment relationship). Fixed-term employment relationships that terminated three years previously will not be taken into consideration for this purpose.

Grounds for notice

A brand new notice ground shall be introduced - an especially gross breach of the regime of a temporarily incapable employee (the obligation to remain in the set place of residence and to abide by the periods and extent of allowed outings) in the period of the first 21 calendar days of temporary incapacity to work. This notice ground may only be used by the employer within 1 month from the day he learned about this breach (in other cases of breach of obligations a 2-month subjective period is applied), at the latest 1 year from the breach itself.

Severance pay

The legislation regarding severance pay should be changed, making the amount of severance pay depend on the length of the employee's employment relationship. The employee should be entitled to severance pay as follows:

  • less than 1 year = 1 average monthly earning,
  • at least 1 year and less than 2 years = 2 average monthly earnings,
  • at least 2 years = 3 average monthly earnings.

The above-mentioned limits of severance pay are specified as the minimum. Of course, the employer can provide more, but never less severance pay.

Discretionary power of the court

The amendment should also bring the reintroduction of the discretionary power of the court in the event of an employee claiming compensation of salary in relation to seeking invalidity of employment termination by the employer. If the time for which the compensation should be granted exceeds 6 months, the court may, on the motion of employer, take into account eventual other employment of the employee during this time and lower the compensation adequately.

Agreement to complete a job

The amendment extends the limit of employment on the basis of an agreement to complete a job for one employer per one calendar year from the current 150 hours to 300 hours. However, the "price" for this extension will be the payment of social security contributions (from which these agreements are currently exempted) in months in which the remuneration exceeds CZK 10.000.

Working hours

A significant change in the field of working hours should be the unification of the conditions for employee in even and uneven distribution of working hours. Specifically, the maximum length of a shift should always be 12 hours (currently 9 hours for even distribution). The employer should be obliged to draw up a schedule of working shifts and to acquaint the employees with this schedule at the latest 2 weeks (in case of account of working hours 1 week) before the beginning of the schedule, even in the case of even distribution.

There should also finally be a clear definition of an "employee working at night". The amendment provides that it should be the employee who works at least 3 hours of his/her shift during the night time on average at least once a week during a period determined by the employer – 26 weeks at maximum.

Salary with regard to eventual overtime work

The current wording of the Labour Code allows employers to agree with managerial employees on salary with regard to eventual overtime work up to a maximum extent of 150 hours per calendar year. In these cases, there is no further payment of salary, extra pay for overtime work or providing of compensatory time off for overtime up to the agreed extent.

The amendment brings a change in this area, making it possible in the above extent (maximum of 150 hours per calendar year) to agree on salary with regard to eventual overtime work with all employees. In the case of managerial employees, it should be possible to agree on this in the extent of maximum possible overtime work, including agreed, i.e. up to approximately 416 hours per year (per 52 weeks).

Temporary assignment of an employee

An important change is the reintroduction of the possibility of temporary assignment of an employee to other employer without the necessity to obtain a license for recruitment (i.e. to become an employment agency).

This new type of temporary assignment would be performed on the basis of an agreement between the employee and the employer and the condition of such assignment is that it is free of charge and the employment has already lasted for at least 6 months. This regulation would not apply to agency employment, but it is the response to requests of employers who often use temporary assignment for example within their own group to improve employee qualifications.

Non-competition clause

Final version of the proposal only brings the decrease in adequate amount of financial compensation for the employee which should correspond to at least one-half of the average monthly earnings (currently one monthly earning) for each month of complying with the non competition clause. Further, it should newly be possible to conclude the non-competition clause during a probationary period.

Transfer of employment

In the legal regulation relating to the transfer of rights and obligations from employment law relationships, the amendment specifies that the rights and obligations from collective agreements are transferred to the new employer only for the period of effect of the collective agreement, but no longer than until the end of the following calendar year.

Also in this area, the employer's obligation to inform employee representatives (if there are none - affected employees) about the upcoming transfer is being specified – it must be fulfilled by the employer no later than 30 days before the date of the planned transfer.

Further the amendment introduces a possibility for the employee, whose employment has been terminated within 2 months from the effective date of the transfer, to claim in court that the termination was due to a significant deterioration of working conditions in relation to the transfer. If the court finds the employee's claim legitimate, the termination will be (fictitiously) considered as for organisational grounds and the employee will be entitled to severance pay.

If the employee gives notice of termination in relation to the transfer, the employment should newly terminate at the latest on the day preceding the effective date of the transfer.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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