Czech Republic: Labour Law Highlights in 2017

Czech Supreme Court supports an extremely broad interpretation of business transfer

The Court was asked to rule whether a business transfer under the Acquired Rights Directive (referred to as a TUPE transfer in UK) would apply when the landlord of a commercial property, which was leased to a coffee shop, terminated the lease and found a new tenant, who also used the premises as a coffee shop.

The Court ruled that the mere fact that a similar business activity was previously carried out at the same premises leads to a transfer of the business activity and as such to the automatic transfer of employees. This despite there being no direct relationship between the two tenants on the takeover of the lease or on the sale of any tangible or intangible property relevant to the business such as kitchen equipment or stock. According to the Court’s opinion the business transfer occurs on the basis of whatever legal acts which result in change of the employer and their replacement for another eligible employer.

This decision has brought great uncertainty to real estate practice as the general understanding prior to this decision was based on the fact that the transfer of employees may be carried out only with the transfer of a stable economic entity.

Conclusions: We recommend that parties involved in commercial property transactions review the history of the premises and consider asking for appropriate representations and warranties on employee transfer. Prior legal assessment to avoid an accidental TUPE transfer is advisable in any case.

Limits to employees’ free speech that potentially defames the employer

The Czech Supreme Court recently dealt with a case in which the employer dismissed a television reporter without notice after the employee gave an interview describing alleged television censorship. In the course of the interview the employee even compared the internal relations at the television station to a totalitarian regime.

The Court took the opportunity to give helpful guidance for the first time on the limits of employees’ free speech. Any criticism of an employer must be based on facts and avoid giving any misleading information aimed at defaming the employer. This also applies to employees who comment on matters of public interest as part of their job.

Any inappropriate and unjustified criticism may lead to termination of employment.

It is often difficult to evaluate whether certain employees’ conduct actually harms the employer’s legitimate business interests or reputation or whether it still remains within the limits of everyone’s constitutional right to free speech.

In this decision the Court made a distinction between legitimate criticism of the employer falling within the limits of an employee’s free speech and unjustified criticism which may have employment consequences.

Conclusions: With the growing number of social media platforms where anyone can express their views, employers are now more often confronted with employees freely sharing their views on internal employer’s matters to an unlimited number of followers.