Czech Republic: A look back at important court decisions in 2021
We would like to present to you a summary of the most important court decisions regarding employment law handed down in 2021.
1. Equal pay for equal work must be guaranteed (regardless of whether in Prague or in Olomouc)
The Constitutional Court of the Czech Republic confirmed that it is inadmissible to pay different wages to employees performing the same work for the same employer but in different regions.
Specifically, the dispute concerned the fact that a driver for the Czech Post in Olomouc was paid less than a driver performing an equivalent job in Prague. The Czech Post argued that the difference in wages between employees with equivalent jobs is due to factors that include higher costs of living. Since costs of living are higher in Prague, a driver in Prague should have a higher wage, according to the Czech Post. The Constitutional Court stated that such reasoning is inadmissible and the remuneration for equal work of equal value must be equal regardless of workplace.
(Decision of the Constitutional Court, dated 31 August 2021, file No. I. ÚS 2820/20)
2. Employers may validly withdraw from a non-compete clause without stipulating any reason
The Constitutional Court concluded that an employer may withdraw from an agreed non-compete clause even without stipulating any reason if this possibility was agreed between the parties. Such practice was inadmissible until the issuance of this decision.
An employer and an employee concluded a non-compete clause. The employee was obliged to refrain from certain gainful activity for six months following the termination of his employment and was entitled to half of his remuneration for such restriction. The employee resigned. The employer withdrew from the non-compete clause several days before the expiry of the termination notice period without stipulating any reason. Until the issuance of this decision, such withdrawal was ineffective. The Constitutional Court reconsidered this practice and stated that it is possible for an employer to validly withdraw from a non-compete clause in this manner depending on the particular circumstances of the relevant case. However, the withdrawal should not be arbitrary or constitute an abuse of the employer's rights against the employee (e.g. withdrawal just before the end of the employment relationship, even though the employer could have done so at any earlier time).
(Decision of the Constitutional Court, dated 21 May 2021, file No. II ÚS 1889/19)
3. Only employers are liable for damage caused by employees
The Supreme Court of the Czech Republic decided that employers have sole liability for damage caused by employees while performing their work. However, this applies only if the employees have not acted excessively while performing their work.
In the given case, the employee, acting on the instructions of his employer, unlawfully dismantled and removed a customer’s kitchen equipment. This conduct caused damage to the customer. The customer sued both the employer and the employee. The Supreme Court has held that if the employee does not deviate from the limits of the employer's instructions in performing his work (i.e. if the employee does not act excessively), he cannot be obliged to compensate the plaintiff for damage. In such a case, only the employer is obliged to pay damages.
(Decision of the Supreme Court, dated 26 October 2021, file No. 25 Cdo 1029/2021)
4. When to reimburse employees for stand-by time
The Constitutional Court stated that if an employee remains at the employer's disposal during a break (for a meal or rest break) (e.g. he is always ready to work as a firefighter at the airport), then such breaks must be paid.
In addition, the CJEU decided in another case that stand-by time during which an employee performs other self-employed professional work with the consent of his employer, but must often be ready to work within ten minutes if called, does not constitute “working time” and thus does not require remuneration. The CJEU further stated that the possibility to engage in other gainful activity during stand-by time is an important indicator that the terms of the stand-by time do not impose significant restrictions on the employee that have a very significant impact on the way in which the employee manages his time.
(Decision of the Court of Justice of the European Union, dated 11 November 2021, file No. C‑214/20, and decision of the Constitutional Court, dated 18 October 2021, file No. II. ÚS 1854/20)
This is just a short summary of a selection of the most important employment case law from 2021.
If you are interested in other topics, we would be happy to talk about them as well. Some of the topics that are still being addressed in the current situation include regulations regarding working from home, determination of annual leave, flex time accounts, compulsory vaccination of employees, obligation of statutory board members to act with due care.