News - Czech Republic

Czech Republic - October 2016

Proposed Amendments to the Labour Code – Issue 1

Welcome to the first issue in our series discussing the proposed amendments to the Czech Labour Code.  The amendments, scheduled to take effect from 1 April 2017, are currently in consultation and have already raised numerous concerns.  We will explore each key change individually, starting with the introduction of top management employees and provisions on employee transfers to a different type of work.

Top management employees

An entirely new concept to be introduced in Czech labour law is that of the "top management employee".  Currently, Czech law only recognizes “managing employees” as the highest tier of employees below the company’s statutory governing body.  Managing employees are classed as any employee who supervises subordinates and have different terms of employment than their subordinates (such as higher unpaid overtime limits and longer probation periods).  

Within the scope of the amendment, based on an agreement with the employer, employees in the two highest management levels under the company's statutory body may be classed as top management employees.   In the original version, a top management employee had to be paid a contractual salary at an average monthly amount of at least CZK100,000. This solution was less than ideal, since calculating average salary is based on all income received in the previous quarter and can vary.  After going through the comments submitted during the government comment procedure, a top management employee should have a regular (not average) monthly gross salary of at least CZK75,000.

The concept of "top management employee" is intended to provide greater flexibility in the regulation of working time and management of additional payments to employees.

Increased flexibility in working time

As mentioned above, the main benefit of creating a new category of employees is increased flexibility in working time.  Under the amendment, top management employees will have the option to work as much as 48 hours per week.  This would be the maximum permitted working hours, with no differentiation between full-time weekly working hours and overtime work.  All work of top management employees (up to 48 hours per week) would be considered regular work, without extra pay, as the general provisions and compensation of overtime would not apply.

Top management employees will also only receive compensation for periods of medical leave (or leave due to illness) and not for periods of compassionate leave (such as attending a wedding or funeral).

Employee transfer to a different type of work

We believe that another area that should be significantly changed by the amendments relates to provisions on employee transfers to a different type of work.

The concept of a one-sided employee transfer to a different type of work for statutory reasons by employers should be removed from the Labour Code. If the amendment passes, employers will still have an obligation to offer to transfer an employee to another type of work for statutory reasons, but the employee has to consent to the transfer (without such consent an employee will not transfer at all).  “Statutory reasons” for this are basically the same as the reasons for which the employer is now obliged to transfer the employee to different work (mostly for health-related reasons).  According to the Amendment, when an employer is unable to assign the employee work that falls under the work agreed in the employment contract, it must offer the employee work that is appropriate with regard to the employee’s health condition, abilities and, if possible, to qualifications. If the employee refuses the work offered, it would be an impediment to work on the side of the employee with no entitlement to salary compensation.

Further information

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Resources

Sec. 41(2) of the Labour Code

Amendments to the Labour Code submitted by the Ministry of Social Affairs of the Czech Republic

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