The Czech Labour Code is likely to see significant changes again. In April 2023, the government approved after a revised draft amendment, which will affect the rights and obligations of employees and employers in many areas.
On the one hand, the amendment reflects the European regulation of the directives on work-life balance and predictable working conditions (Directive (EU) 2019/1158 of the European Parliament and of the Council on work-life balance for parents and carers and Directive (EU) 2019/1152 of the European Parliament and of the Council on transparent and predictable working conditions in the EU), and on the other hand, it seeks to regulate telework, simplify delivery, and digitise employment documentation.
Please note, however, that the changes set out below are still only a proposal that must go through the legislative process and there can be no reliance on the amendment being adopted in its current form.
The current assumption is that the amendment could be approved this autumn. It is worth mentioning in this respect the so-called split effectiveness of the amendment. The vast majority of the provisions of the amendment should enter into force (i.e., become applicable to the parties to the employment relationship) on the first day of the first calendar month following the date of promulgation of the law. On the contrary, for example, the widely discussed holiday entitlement for agreements should take effect on the first day of the calendar year following the date of promulgation of the law, i.e. on 1 January 2024.
Agreements outside the employment relationship (FTE AND FTE)
The status of employees working under a contract of employment ("CBA") or a contract for performance of work ("CfW") will change in any event, as the basis for the changes is largely derived from the aforementioned European Directives.So-called contract workers should thus be afforded a much higher level of protection than before. On the other hand, for employers this will probably mean an increase in administration and costs even for these traditionally more flexible forms of employment.
Holidays
If the employee will (as expected from 1 January 2024) work on the basis of a fixed-term or permanent contract and meets the statutory conditions, he/she will be entitled to holiday. The general leave regulations in the Labour Code apply to the conditions for the accrual, calculation and collection of leave. For the purposes of leave, the weekly working time for the purposes of leave shall be set at 20 hours, regardless of the actual amount of working time agreed and performed under the agreement.
When calculating holiday pay for every 20 hours worked, the employee is entitled to approximately 1.5 hours of holiday. The result shall be rounded up to the nearest whole hour. Thus, in theory, an employee on a fixed-term contract may be entitled to up to 80 hours of holiday per year if he works 20 hours and takes four weeks' holiday.
Similarly to an employment relationship, if the employee is unable to take the leave during the employment relationship, the employer will compensate the employee for the leave after the end of the work under the agreement. Thus, particularly in shorter-term agreements, we can assume that the parties will be primarily inclined to do the work within a specified period of time and then be compensated financially for the untaken leave.
Example: an employee on a fixed-term contract works 12 hours per week with a fixed holiday allowance of four weeks. He works a total of 624 hours in 2024. The employee will therefore work 31 whole multiples of 20 hours per week (624 / 20 = 31.2) and will be entitled to 48 hours of leave [(31 / 52) × 20 × 4 = 47.69].
Transition to employment
The current provision of Section 74 of the Labour Code already stipulates that the employer should ensure the performance of its tasks primarily by the employee in an employment relationship. The amendment aims at the same goal and states that if the employee has worked for the employer under one of the agreements for at least 180 days in the previous 12 months, he may request the employer in writing to switch to an employment relationship. The employer is then obliged to provide a written response within one month, giving reasons (not necessarily granting the request).
Working time schedule
Another important change is the employer's obligation to draw up a working time schedule also for employees working under an agreement. The employer is obliged to inform the employee of the schedule at least three days in advance. However, it is possible to agree on a shorter notice period for greater flexibility.
However, according to the explanatory memorandum, it is sufficient if the employer schedules in advance, within a statutory or agreed period, for example, one or more shifts for which it already knows in advance that the employee will be required to work for a certain amount of time.
We recommend paying attention to shift scheduling. If an employee shows up for a scheduled shift and the employer does not have enough work for the employee, the employee could be entitled to back pay due to an impediment to work on the part of the employer.
Extra pay, obstructions to work
Another novelty is the provision of additional payments (for holiday work, including compensatory time off, night work or weekend work) also for employees working under an agreement. It is thus recommended to focus on scheduling working hours so that the so-called agreement workers do not work during these periods. This can prevent further cost increases for the employer.
Furthermore, according to the amendment, employees working under an agreement will have the right to take all work restrictions. The special restrictive regulation will thus be deleted from the Labour Code. However, employees working on the basis of an agreement will only be entitled to wage compensation for other important personal obstacles at work and obstacles in the general interest if they agree with the employer or if an internal regulation so provides.
Justification for termination of the agreement
The amendment considers it equally important to ensure a higher level of protection in the event of termination of an employment relationship based on an agreement. Termination of an agreement does not normally require justification.
However, if, under the proposed wording of the amendment, the employee believes that he or she has been given notice of termination of the agreement because he or she has asserted or exercised his or her rights in a lawful manner, he or she has the right to request a written justification from the employer. If the employer fails to comply with this obligation, a fine of up to CZK 200,000 may be imposed on the employer on the basis of the proposed amendment to the Labour Inspection Act.
Extended information obligation
Employers will be obliged to inform their employees of their statutory rights and obligations arising from the employment relationship within seven days of the commencement of the employment relationship. This is a substantial reduction from the current one-month period. In the case of changes, the information should then arrive no later than on the day of their entry into force. Informing employees will therefore become an issue that employers will have to deal with on an ongoing basis.
Although many employers already fulfil these obligations when signing the employment contract directly in the contract or in separate documents, they should also pay attention and update their practice after the amendment comes into force, as the scope of the information to be disclosed will be expanded at the same time.
Employees should now be informed, for example, about the duration and conditions of the probationary period, professional development if provided, the extent of the minimum continuous daily/weekly rest period, as well as the social security body to which the employer pays social security contributions.
Employers will also be able to provide this information electronically. In addition to accessing this information, employees should be able to save or print it.
The information obligation will also apply to employees on fixed-term and temporary contracts.
Information about the reasons for the employer's decision
Following European legislation, employers will now be required to provide written reasons for certain decisions (e.g. refusal to transfer employment, refusal to telework - home office).
The justification should be clearly formulated, as far as possible objectively, and above all should not give the impression of discrimination or favouring/disfavouring certain employees over others.
Digitisation of employment documents
The amendment should take forward the digitisation of employment documents and allow for the electronic conclusion of contracts with employees as well as the delivery of documents.
Contracts in electronic form
Firstly, the amendment allows bilateral documents relating to the creation, modification or termination of an employment relationship (e.g. employment contract, FTC, FTC, amendments, termination agreement) to be concluded and delivered electronically.
However, they must be delivered to an electronic address of the employee that is not available to the employer (e.g. private e-mail). The employee will only be able to withdraw from documents concluded in this way within seven days of delivery if he or she has not yet started work.
Electronic delivery
As regards the electronic delivery of unilateral documents relating to the termination of the employment relationship (e.g. notice of termination, immediate termination, termination during the probationary period), as well as wage or salary assessments, a stricter regime applies. The amendment gives priority to the delivery of such documents by hand. The employer will only be able to deliver electronically if the employee has consented to this method of delivery in a separate written declaration in which he or she has also provided an electronic address for delivery that is not at the employer's disposal. The employer must also inform the employee in writing of the conditions for electronic delivery before giving consent. It will therefore be appropriate to obtain this consent from the employee at the beginning of the employment relationship. However, the employee's consent will be revocable (in writing). At the same time, the document from the employer must be signed with a recognised electronic signature. The writing is delivered on the date the employee acknowledges receipt (typically by replying to an email). If he or she fails to do so (and the message is not returned as undeliverable), the so called "fiction of service" applies. The message will therefore be deemed to have been duly delivered after the expiry of the 15-day period from the date of delivery. Similar rules apply to service by the employee on the employer. However, the employee is not required to sign the message with a recognised electronic signature.
Work from home (Home Office)
After years of legislative vacuum and uncertainty, the home office, defined in the law as teleworking, will be regulated more closely.
The basis for a written agreement
Home from work has undergone a major transformation in the comments procedure of the amendment. A written agreement is to be an elementary prerequisite for telework. However, the specific elements of the agreement are no longer proposed and it is therefore up to the parties to agree on the content. Compared to the original proposal, the new agreement does not explicitly require the provision of contact with other employees or the provision of technical equipment.
However, for the legal certainty of the parties, we strongly recommend that at least the basic conditions for teleworking are laid down. These include, in particular, the place or places where the telework is to be carried out, the method of communication, the distribution of working hours and the volume of work, as well as the assignment and control of the work. It is also advisable to regulate, for example, the principles of occupational health and safety and the security of the resources entrusted to the worker (not necessarily directly in the agreement).
The agreement can be terminated with 15 days' notice. However, the parties will be able to agree on a different length of notice period, as well as on the non terminability of the agreement.
The possibility for the employer to order telework is also introduced. However, this will only be possible:
- if a measure of a public authority so provides, for a strictly necessary period of time, if the nature of the work to be performed allows it and the place of telework is suitable for the performance of the work.
However, it will always be up to the employee to inform the employer of a suitable teleworking location (or that he or she does not have one).
Lump-sum reimbursement of expenses
One of the biggest current snags has been calculating and paying the actual costs of telework. The amendment brings a major simplification and allows for payment of lump-sum reimbursement of costs (now always according to the decree of the Ministry of Labour and Social Affairs compared to the original proposal of CZK 2.80 per hour of work). Another major change from the original proposal is the possibility to agree in writing that no reimbursement of expenses will be paid.
Employees will be able to request telework. In addition, pregnant employees, employees caring for a child under the age of 9 or dependants will have the right to a written justification if their request is refused.
Conclusion
It is already clear from the above overview of the changes that significant changes are on the horizon in the area of employment law. Although the exact effective date and scope of the amendments to the Labour Code are not yet known, we recommend keeping in mind that sooner or later there will be some changes, not only because of the need to bring Czech law into line with the requirements of the European Union.
The amendment will affect the vast majority of employers and will require the modification of internal procedures and the creation of new model documents in order to comply with all the new obligations.
Source: Novela zákoníku práce 2023 – nejdůležitější změny - Portál POHODA