On 16 April 2024, the Ministry of Labour and Social Affairs (hereinafter referred to as the “Ministry“) published a substantive draft amendment to the Labour Code, which aims to increase the flexibility of the Code, particularly in relation to the termination of employment relationships or the distribution of working hours, but also to expand the opportunities for the employment of working parents or to simplify the delivery of selected labour law documents (hereinafter referred to as the “Amendment“). The Amendment also introduces several other partial changes to various parts of the Labour Code.
Below is a brief summary of selected changes.
More flexible termination of employment
The amendment provides for a number of significant changes in the area of termination of employment relationships on the basis of notice.
The first change is the start of the notice period, which now starts on the first day of the month following the month in which the notice of termination is delivered to the other party. However, the notice period is now to start from the moment of delivery of the notice, which will in practice lead to a shorter notice period. At the same time, the current notice period is also to be shortened from two months to one month in the event that the employer gives notice to the employee for reasons related to the employee’s misconduct.
The amendment also proposes to merge the grounds for notice related to long-term loss of medical capacity, whereby in the event of an occupational accident or occupational disease, the employee will now be entitled to compensation paid from the employer’s compulsory insurance in the same amount instead of severance pay.
Changing the length of the probationary period
The length of the probationary period is also likely to be subject to change, with a new provision allowing for a probationary period of up to four months for regular employees (as opposed to the current three months) and up to eight months for leading employees (as opposed to the current six months).
Changes to the employment of working parents
The amendment also aims to encourage an earlier return from parental leave and should facilitate the overlap between parental leave and return to work (for example, by arranging a temporary or permanent contract for the same type of work). According to the Amendment, employers should now guarantee the same job to the parent of a child up to two years of age.
In addition to the above, the Amendment should also give employers greater freedom to repeat fixed-term employment for an employee who replaces another employee on maternity and parental leave.
Changes to the distribution of working time and rest periods
The amendment also affects the regulation of the scheduling of working time and rest periods. According to the Amendment, it should now be possible for an employee to schedule his or her own shifts. At the same time, the Amendment also proposes the employer’s right to reduce significantly the employee’s daily rest period in case of emergency situations.
Other forthcoming changes
As we have already indicated above, the Amendment also introduces a number of other partial changes.
For example, the amendment is intended to promote the employment of professionals in public administration by allowing selected public employees to perform, concurrently, work with membership in the bodies of entrepreneurial legal entities.
Also, it will newly be possible to negotiate the payment of wages in a currency other than the Czech currency, which will be particularly welcomed by employers employing employees with a place of work abroad.
The amendment is also intended to correct the illogic of the last amendment (known as the “big amendment”), which established strict rules for the delivery of wage and salary assessments in one of the ways provided for in Sections 334 et seq. of the Labour Code, which has been highly criticized in practice and described as unsystematic. The more flexible conditions for electronic conclusion of contracts under Section 21 of the Labour Code should now apply to these documents.
Last but not least, the Amendment also regulates:
- Conditions for calculating average earnings when changing the weekly working time, which are not yet addressed in the Labour Code;
- Equalization of partners, in particular for obstacles to work on the side of the employee;
- Proving the competence of a trade union;
- Allowing light work to be performed by minors aged 14 and over even without having completed primary education at the time; or
- Clarification of the employee’s rights in the event of invalid termination of employment.
Conclusion
The amendment is being prepared in accordance with the programme statement of the Government of the Czech Republic and on the basis of recommendations of experts and the National Economic Council of the Government. The content of the Amendment was also widely discussed within working groups and in inter-ministerial proceedings.
The Amendment is intended to introduce significant changes to the Labour Code, in particular in the area of more flexible dismissal, which has long been called for by Czech employers, but also in the area of employment of certain categories of employees, and it also introduces other changes in various areas of the Labour Code. On the other hand, there is no doubt that the Amendment is likely to reduce employee protection in certain areas. In view of the forthcoming legislative developments, we therefore expect extensive discussion on the floor of the Parliament.
Moreover, the current substantive draft of the Amendment does not indicate whether it will also modify the grounds on which an employer may unilaterally terminate an employment relationship with an employee, albeit on the condition of paying a higher severance pay than is currently provided for in the Labour Code, which the Ministry is currently presenting in the media. It will also be interesting to see whether the Ministry succeeds in enforcing stricter conditions and a reduction in the duration of unemployment benefits, which are related to the Amendment and which are also currently being widely discussed by the Ministry.
Finally, please note that as of the date of this post, we only have a substantive plan, with the exact draft of the wording expected to be submitted to the Government by May 2024. This post therefore does not aim to provide a detailed analysis of the individual changes, but merely presents the general framework of the Amendment.
For a more detailed analysis of the Amendment and its contribution and application in practice, the specific draft of the wording of the Amendment and also in what wording the Amendment will be finally approved will be crucial. We will keep you informed of further developments.
