Czech Republic: Practical Impacts of the Amendment to the Labour Code 2017

In the light of the amendments to the Czech Labour Code (the “Amendment”)^* currently under discussion, we have prepared an overview of the most significant proposed changes and their practical impacts.

Changes to employment relationships

Performance of another type of work

The Amendment revokes the present practice under which in certain situations (e.g. due to health reasons, incapacity to perform night work or pregnancy) the employer could transfer the employee regardless of the type of work agreed in his or her employment contract. Under the Amendment, the employer can only assign the employee an alternative suitable position reflecting the agreed type of work or offer them other suitable work (unless this is necessary in order to avert an imminent accident, for example).

In practice, the following possibilities might occur:

• the employee accepts the new position: in this case the type of work agreed in the employment contract will be changed;
• the employee refuses the position: in this case the employee is not entitled to receive salary compensation;
• the employer does not have or does not offer an alternative suitable position: in this case the employee is entitled to receive salary compensation in the amount of his or her average earnings.

The suitability of the work has to be considered primarily depending on the employee’s state of health and abilities and the employer should also take into consideration his/her qualifications.

Considering the definition of the “suitable work”, it seems probable that the employee’s qualifications will not be the decisive criterion. The employer could presumably also offer the employee a position requiring lower qualifications and thus often also a lower salary.

If no suitable position exists, we recommend always considering on an individual basis whether it is possible to terminate the employee’s employment relationship.

Home office**

Arrangement: if you are willing to allow use of a home office on a regular basis, it must be agreed in the employment or other contract;

Costs: it remains the employer’s duty to cover the costs associated with a home office – internet connection, phone and energy. The Amendment determines the possibility to cover these costs by a lump sum; nevertheless, it is always necessary to explicitly separate them from the salary;

Means of work: the Amendment explicitly determines that the employer might permit the employee to use his or her own means to carry out the work. Use of this possibility will lead to an increase in reimbursement of the costs to employees;

Working hours: since employees allocate their working hours by themselves, they are not entitled to wages and payments of premiums or time in lieu overtime work and work on public holidays, to payment of premiums for night work or for work on Saturdays and/or Sundays. Where a working day falls on a public holiday, the employee is entitled to receive a compensatory salary like other employees. The employee is also entitled to receive salary compensation in the event of temporary incapacity for work.

We recommend in particular:

• checking payment settings for related costs. In view of the prohibition of unequal treatment, it must be ensured that salary of home office staff is not, considering reimbursement of ancillary costs, lower than the remuneration of other employees in the same positions;
• paying attention to data protection, especially if employees use their own work facilities;
• in view of the new employer's duty to allow home office employees to keep contact with other employees, they should be still invited to regular meetings and team building events;
• also setting out working hours for home office employees for salary adjustment purposes, such as in the case of temporary incapacity for work.

Annual Leave

Length of annual leave with pay: five weeks are proposed as a standard length instead of the current four weeks;

Leave entitlement: according to the Amendment, the employee’s annual leave entitlement will be determined in hours (not in days) and the basis will be their weekly working hours (not days). The employee’s entitlement will be calculated as the multiple of their specified weekly working hours (typically 40 hours) and specified length of the paid leave (e.g. five weeks), i.e. the entitlement for the calendar year will be 200 hours. Possible overtime work will not influence the length of the annual leave;

Leave-taking by an employee with even distribution of working hours: for two weeks’ paid leave (for a 40-hour working week) the employee takes 80 hours of the paid leave (40x2);

Leave-taking by an employee with uneven distribution of working hours: the number of hours of the paid leave taken depends on the length of shifts planned for the relevant week. In case of two weeks leave (for a 40-hour working week) during a week in which the employee is instructed to work 10-hour shifts and during a week in which they are instructed to work 8-hour shifts, the employee takes 90 hours of the paid leave (10x5 + 8x5);

Periods of leave-taking: only in extraordinary cases it is possible to take leave in a shorter period than the length of one shift. The employer is furthermore obliged to allow the employee to take the paid leave in whole weeks.

We recommend:

• checking whether employment/collective contracts or internal regulations determine the employee’s entitlement as being one week of paid leave in excess of the statutory regulation if the standard length of five weeks paid leave is approved;
• ensuring that the flexible distribution of working hours does not apply in the case of paid leave, i.e. that in such cases the standard distribution of working hours into shifts is used.

Definition of top-level management employees

Who is a top-level managerial employee:

• a senior employee who is directly subject to the executive director or board of directors of the company, or a senior employee directly subordinated to such senior employee;
• concurrently, such employees must have a contractual salary of at least CZK 75,000 and must agree to their status as a top-level managerial employee.

Working hours:

• maximum allowed weekly working hours including overtime work is 48 hours;
• working hours are allocated by the employees themselves, and they are not entitled to any salary and premium payments or time in lieu for overtime work and work on public holidays or for night work and work on Saturdays and/or Sundays.

The Amendment does not specify what weekly working hours will be the basis for calculating leave with entitlement to pay for top-level management employees, i.e. whether it is the standard 40-hour or special 48-hour working week. We assume that it is not intended to grant these employees a higher holiday entitlement than regular employees, meaning that the basis will be the 40-hour working week.

Serving documents in employment relationships

The Amendment significantly simplifies the delivery of the most used document – the termination notice (and of course other documents involving creating, changing or terminating employment and remuneration). At first, the employer should try to hand over the document personally in the workplace. If the employee is not present in the workplace (for a long period), the employer may send the document by registered mail*** or hand it over to the employee personally, wherever he or she is caught up.

If the employee does not pick up the delivered termination notice within 15 calendar days, a legal fiction of delivery will apply and the termination notice will be delivered on the last day of this period.

The employer must deliver to the employee's last known address communicated by the employee to the employer in writing. We recommend determining which department (e.g. HR) or person (managing director) will be responsible for updating the employee address records and agreeing with the employee in writing that the specified department must be informed immediately if there is a change in the delivery address.

Other selected changes

• employees and employers can agree on a shorter time than the statutory two weeks for an employee to get used to a change in the working time schedule. However, according to the Amendment the agreed shorter period may not be less than two days;
• the employer is now obliged to place the employee in their original position and workplace after they return from parental leave as well (not only after returning from maternity leave). If this is not possible, e.g. because of the dissolution of the workplace, the employee should be placed on a position in line with the type of work agreed in the employment contract;
• the employer is now obliged to set up measures to prevent the risk of stress, violence and harassment in the workplace. The Amendment does not provide any specific instructions on which measures should be adopted. This may include, for example, monitoring that the workload is distributed appropriately and that employees are not overloaded in the long term, setting up specific procedures on how the abovementioned situations should be reported and to whom and on steps to address them;
• the Amendment extends the rights of employees working on the basis of agreement to complete a job (Czech abbreviation DPP) and agreement to perform work (Czech abbreviation DPČ). Specifically, they will be entitled to a work break, the employer must keep a record of their shifts and ensure that the duration of their shift does not exceed 12 hours and that the employees have an uninterrupted rest period.

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^{* The Amendment is subject to a second reading in the Chamber of Deputies, meaning it is subject to approval by both chambers of the parliament and signature of the president.
** This regulation is not applicable to employees who are working from home only exceptionally.
***For the delivery of the termination notice and other important documents to the employee, an envelope with a single blue stripe is usually used.}