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Amendments to the Czech labour code (Part 1)

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The last time Czech Labour Code saw such extensive emendation was approximately 5 years ago. The current changes are scheduled to come into effect on 1 April 2017. The new rules are still at the beginning of the formal legislative procedure, which means that this is still very uncertain what they will look like in their final draft. Is is already certain, however, that the most important changes that the social partners have agreed upon will, in some way or another, definitely show up in the new Labour Code next spring. What exactly are these changes going to be? What do you need to watch out for when planning your company’s budget for next year? And what should you already begin to take into account and slowly start getting ready for?

AMENDMENT TO THE LABOUR CODE

Below, you may find recently discussed areas which should become part of the prepared amendment of the Labour Code.

TOP-LEVEL MANAGERIAL EMPLOYEES

Top-level managerial employees are a newly introduced category of employees. They are to make up a special level of managerial employees, who are to be directly subordinate to the employer (or the employer’s statutory organ) or directly subordinate to these employees. At the same time, their wages have to be agreed upon, and have to amount to at least CZK 75,000 a month.

If the employee fulfils the above stated criteria, and makes an agreement with the employer to become a top-level managerial employee, the employee’s working time will be subject to entirely different rules. The employee will be permitted to schedule his/her working time, in the scope of up to 48 hours a week, entirely independently.

Provisions related to overtime work; the length of the weekly working hours and the maximum length of a shift will thus not apply.

Remuneration will then not be in any way influenced by work overtime, at night, on Saturday or Sunday, and it will thus not be necessary to compensate the employees with the respective extra pay.

Concurrently, these employees will not be entitled to any wage compensation for any other important work impediments.

Wage compensation in the case of temporary work incapacity will be paid out according to a fictional schedule, which the employer will be obliged to create for these reasons (similarly to the current treatment of agreements on work performed outside of an employment relationship, should the employee participate in a sickness insurance scheme). A similar schedule will then be used for wage compensation during a bank holiday due to which the employee did not perform work.

EMPLOYEE WORKING TIME INFORMATION

The content of employee working time information, according to Sec. 37 of the Labour Code, is being made more precise. It will now be necessary to include indication about the agreed upon working time and how it is to be scheduled, including the length of the compensatory period (when the scheduling is uneven). It will continue to be possible to replace this specification with reference to legislation, a collective agreement, or internal regulation.

PERFORMANCE OF ANOTHER TYPE OF WORK

The amendment completely abolishes the institution of transferring to another type of work, as it has been used up to now, and replaces it with the concept of performance of other work. This, however, is not just a change in terminology, but a complex change of the entire institute. As the current treatment is often criticized due to the fact that being transferred to another type of work without the employee’s consent essentially constitutes forced work, the performance of which the employee cannot refuse, the newly established performance of other work is drafted as the employer’s obligation to offer up another type of work. In the stated examples, the employer will thus be obliged to offer the employee another suitable type of work, and, just as now, this will have to be adjusted to the employee’s health condition, abilities, and, if possible, to the employee’s qualifications. An agreement on this change to the employment contract will then have to be made.

If the employer will not offer the employee other suitable work, or will not be able to, this will constitute impediments at work on the side of the employer, and the employer will thus have to compensate the employee with 100 % of the average amount of earnings. The only exceptions are made up of those cases, in which the employee causes, through his/her own fault, that he/she cannot perform the work performed to date, as directed by the final judgment of a court or another statutory body (such as restriction of eligibility to undertake a certain activity) or should the employee temporarily lose the qualifications needed to perform the work (e.g., by having his/her driver’s license rescinded). In these cases, the employee won’t be entitled to wage compensation.

Unfortunately, this exception won’t be applied to loss of eligibility based on medical unfitness on the grounds of a general illness (even if it is not related to the performance of work – e.g., if the employee does not act in accordance to regulation, and, for example, goes skiing off the ski-slope, and injures him/herself in such a way that impedes his/her performance of work).

Should the employee reject the job offered, this would constitute impediments at work on the side of the employee. His/her absence at the workplace will be excused, but the employer will not be obliged to provide any kind of wage compensation.

Reasons for the obligation to offer the employee other suitable work remain the same as those for the compulsory transfer of the employee to another type of work (health reasons, work which may not be performed by an employee who is either pregnant or nursing, the decision of a court or statutory organ and the request of a pregnant employee).

Moreover, a new reason, temporary loss of working qualifications, has been added, under which it used to be possible to transfer an employee, but it was not the employer’s obligation. On the other hand, the following reasons for transferring have been completely eliminated: termination of employment relationship according to Sec. 52 f) and g) of the Labour Code (i.e. for the reasons of non-fulfilment of requirements or requisites, unsatisfactory work results, and the breach of work obligations).

The performance of another type of work without the employee’s agreement will only be permissible in one instance –when it is needed to avert emergencies, natural disasters, or other imminent accidents or to mitigate their immediate aftermath.

TERMINATION DUE TO A TRANSFER

The conditions and the period of the termination of employment relationships in the case of a notice submitted by the employee due to the transfer of rights and obligations are now to be better specified.

The new employer will no longer have to experience, as much uncertainty about how many employees will actually transfer. Currently, employees may give notice to their employer shortly before the realization of the transfer, and have the employment relationship then end only one day before the transfer comes into effect.

It will now, however, only be possible for the employee to give this kind of notice up to 15 days from the day, on which they were informed about the transfer of rights and obligations. According to the Labor Code, employers are obliged to inform their employees about the transfer at least 30 days before it comes into effect.

Should an employee not be informed of the transfer, it will be possible for him/her to give notice up to 2 months from the day that the transfer came into effect. In such cases, there will be a 15-day notice period.

AGREEMENTS ON WORK PERFORMED OUTSIDE OF AN EMPLOYMENT RELATIONSHIP

The popularity of the “agreements” at the expense of employment relationships and their common misuse has led to efforts to tighten the rules governing their use. The amendment changes the rules for these agreements in 3 different areas:

  • Minimum wage and guaranteed wage

Employees performing work on the basis of agreements will now have to be remunerated at least in the amount of the guaranteed wage. It will thus no longer be possible to remunerate them just with the amount of minimum wage.

  • Working hours and keeping record of working hours

Employees working under an agreement will now also have to follow certain rules concerning working hours. Apart from being permitted to work 12 hours at a time at most, it will be necessary to keep in line with the maximum length of time of performance of work for youths, provide them with work breaks and keep records of their working hours.

  • The duration of the compensatory period

The maximum duration of the work performance under the Agreement to Perform Work will now be set at 26 weeks. It will only be possible to prolong this period at a maximum of 52 weeks if set so by a collective agreement.

ACCOUNT OF WORKING HOURS

Account of working hours will now become more similar to other methods of scheduling working hours. It will be possible to assign or agree on work outside of scheduled shifts only in the extent and under the conditions for work overtime. It should then, based on an explanatory memorandum, also become possible for employers to assign their employees with work according to a schedule of working time – if the employer fails to do so, impediments at work on the employer’s side will arise.

Other limits in the possibility to assign work lays in the setting up of rest days to a larger extent, even to days, in which the employer did not assign a shift ahead of time, or scheduled it to a smaller duration, than one half of the duration of a shift in a 5-day working week.

Provisions governing so-called permanent wages, which are paid out to employees in the account of working hours, are also being clarified. It will now be possible to reduce this amount, should the employee not perform work (for reasons such as taking leave, or impediments at work, etc.).

THE PERIOD OF UNINTERRUPTED DAILY REST

The concept of uninterrupted rest between two shifts will now be replaced by the concept of uninterrupted daily rest. Even though the rules for the provision of this rest remain the same (with the only difference being the emphasis on the need to actually provide it, not just schedule it), the name change should accentuate that the rest has to always be provided in cycles of 24 consecutive hours.

It will now also be possible to reduce the period of this uninterrupted rest at large upon the establishing of an account of working hours.

BEING ON CALL AND FLEXIBLE WORKING HOURS

Due to the fact that an employee working in flexible working time chooses when to commence and end the performance of work by his/herself within the frame of optional working hours, it will no longer be possible for him/her to be on call within optional working hours.

First published by our Ius Laboris partner firm Randl Partners from Czech Republic. To be continued.