News - Czech Republic

Czech Republic - September 2013

Recent Changes in Czech Employment Law

On 1 August 2013, new legislation came into effect governing minimum wage and fixed-term employment.

Fixed-term employment relationships

Since January 2012, the Czech Republic Labour Code has stated that a fixed-term employment may not exceed 3 years (previously the maximum duration was 2 years). Further, fixed-term employment at the same employer could not be repeated more than twice, i.e. can be concluded altogether 3 times (the maximum duration of subsequent fixed-term contracts is therefore 3 times 3 years). Those 2012 rules have resulted in practical difficulties, necessitating adoption of the amendment.

Since 1 August 2013 employers are now able – under certain conditions – to repeat an employee's fixed-term employment without limitation. Those conditions are where material operational reasons exist, or if it is a special type of work where concluding an unlimited employment contract cannot be reasonably required (e.g. seasonal employees, employees working on projects). In order to apply these new rules, the employer must have an agreement with a trade union covering certain particulars, in particular an explanation of the operational reasons or the special type of work (or issuance of an internal regulation if no trade union is established at the employer).

In practice, these new rules allow repeating a fixed-term employment as well as agreements on longer fixed-term contracts. However, they may not be applied when hiring a replacement for an employee on maternity or parental leave.

This new law also included a reduction in the minimum number of hours between shift breaks for adult employees, from 12 to 11 hours.

Minimum wage

On 1 August 2013 the minimum monthly salary was increased from CZK 8,000 (€ 320) to CZK 8,500 (€ 340) and the minimum hourly wage from CZK 48.10 (€ 1.92) to CZK 50.60 (€ 2.02).

The new regulation also increased guaranteed salaries. This affects more than just employees remunerated at the minimum wage level. There are 8 levels of monthly guaranteed salary, determined by the complexity of the work performed. The first level corresponds to the minimum salary, i.e. CZK 8,500. The highest guaranteed salary, for the 8th level, is now CZK 17,000 per month (previously CZK 16,100).

This change does not apply to employees who are entitled to an invalidity benefit. Their salaries are kept at the above-mentioned previous levels (this should encourage employers to continue to employ them).

Resources

Governmental Regulation No. 567/2006 Coll. on Minimal Wage Section 39 of the Labour Code (Act No. 262/2006 Coll.)

For further information or to discuss any of the issues raised, please contact Mr. Daniel Vejsada (daniel.vejsada@prkpartners.com) and/or Ms Tereza Erényi (tereza.erenyi@prkpartners.com) on +420 221 430 111.

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