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After many weeks of discussions, adjustments and negotiations, the long-awaited amendment to the Czech Labour Code was finally approved.
On 13 September 2023, the House of Representatives overruled the Senate’s proposals to the amendment to Act No. 262/2006 Coll., the Labour Code (the “Labour Code”) and therefore approved the amendment as submitted to the Senate by the House of Representatives.
The Act was signed by the Czech President on 17 September 2023 and published in the Collection of Laws on 19 September 2023 as Act no. 281/2023 Coll.
The amendment is intended to enter into effect generally on the first day of the month following its publication in the Collection of Laws. The amendment will thus enter into force on 1 October 2023.
The provisions concerning the introduction of the right to annual leave for employees working under agreements on work performed outside the employment relationship are to take effect from the first day of the year following the publication of the amendment in the Collection of Laws, i.e. 1 January 2024.
This also applies to the amendment of Section 92 regulating continuous weekly rest and the modifications to Section 303 Subsection 3 limiting the activities defined therein for selected groups of public sector employees.
The amendment brings the following changes:
All changes concerning agreements outside the employment relationship (i.e. agreement on work performance or “DPP” and agreement on work activity or “DPČ”) are related to the underlying change of concept, according to which the working time provisions will now apply to these agreements.
As a result of the application of the working time provisions, the employer will be obliged to:
The schedule will need to be communicated to the employee at least 3 days in advance unless the parties agree on a longer or shorter reasonable period of time. The extent to which this period can be shortened is debatable; in special, justified cases, for example, a period of 1 day could be considered; however, until sufficient interpretative practice develops, we recommend that, in order to uphold the principle of predictability of the terms of the employment relationship, the three-day period is generally kept unless special circumstances of the work or operation are present.
All provisions concerning the scheduling of working time must be complied with:
This is also linked to the employer’s obligation to record working time.
Unless the employer is able to schedule working hours so that no work is performed during these times, DPP and DPČ workers will now be entitled to additional premiums for work on public holidays, weekends or night work.
From 1 January 2024, an employee working based on DPP or DPČ agreements will be entitled to annual leave.
In order to be entitled to annual leave, the employment relationship will have to last at least 4 weeks and the employee will have to work at least four times the notional (fictionally stipulated) working time (i.e. 80 hours; including any compensatory time).
The calculation of annual leave will be based on the notional working time of 20 hours per week, regardless of the actual agreed scope of work or work tasks. The principle for calculating the length of annual leave will be the same as to date, e.g. since the weekly working time for leave purposes is always 20 hours per week, an employee with a 4-week basic leave entitlement will be entitled to 1/52 of 80 hours, i.e. approximately 1.5 hours of annual leave, for every 20 hours worked (including compensatory time).
If the annual leave is not fully used up by the end of the employment, it will have to be compensated, similarly to employees working under employment contracts.
As a result of the application of the working time provisions, employees will be entitled to obstacles to work on their side, i.e. their absence will have to be excused by the employer.
Employees working on the basis of these agreements will not be legally entitled to salary compensation (remuneration), but it will be possible to agree on its provision or to establish such entitlement in the employer’s internal regulations. The period of obstacles to work will not count towards the legal limit for agreements (i.e. a maximum of 300 hours for DPP or half of the agreed working time in the case of DPČ), as this relates to the actual performance of work. Thus, if the employee takes annual leave or there are obstacles to work on his/her side, for example, this will not count towards these annual limits. However, according to the explanatory memorandum to the amendment, it should be noted that these compensatory periods will be counted in for the purposes of annual leave calculation according to the same rules as with standard employment contracts.
The employee will be able to request, within 1 month of receiving a termination notice, written specification of the reasons for employment termination, specifically if the employee believes to have received the notice as a result of asserting his/her rights, e.g.:
The employer will be obliged to provide such written justification of the notice without undue delay.
Employees will now be able to make a written request for employment under an employment contract instead of DPP/DPČ, if their relationship with the employer under such agreements outside of the employment relationship has lasted for a cumulative period of at least 180 days in a period of 12 consecutive months. However, the amendment does not establish an obligation to comply with such a request and only provides for the obligation of the employer to respond in writing to such a request within 30 days.
The Labour Code newly stipulates that the agreed work must be specified in DPP, as is already the case for DPČ.
Salary compensation from the agreement (as well as the advance on such compensation) is explicitly included among other income that may be subject to salary deductions under Section 147 of the Labour Code.
More significant changes are to be made to the employer’s information obligation under Section 37 of the Labour Code, both at the commencement of the employment relationship (or DPP/DPČ) and at the time of posting. These changes consist both in shortening the time limit for compliance with this obligation and in expanding the scope of information that must be provided to employees, which is also extended to cases where the employee is posted abroad by the employer.
The time limit for fulfilling this obligation is to be reduced from the current 30 days to 7 days from the beginning of the employment relationship. A significant part of the information obligation may be fulfilled by reference to information contained in internal regulations, so attention should be paid to their wording. The employer is obliged to inform the employee of any changes to the information without undue delay, at the latest on the day on which the change takes effect.
The employer will thus have to inform the employee in writing of the following (i.e. beyond the current scope of the information obligation):
The information obligation will have to be fulfilled regardless of the duration of the employment relationship, i.e. also for employment relationships shorter than 1 month. At the same time, the Ministry promised to develop a template information form pursuant to Section 37 of the Labour Code meeting the new statutory conditions. However, according to the information available to us, the Ministry has not yet prepared such a template.
As far as existing employees are concerned, if the information obligation was fulfilled before the amendment to the Labour Code came into effect, the employer is obliged to provide information according to the extended list of information only upon the employee’s written request within 7 days from the date of receipt of such a request.
Additional information beyond Section 37 must be provided in advance to employees posted abroad for a period exceeding 4 weeks, with a special category of data requested for employees posted in the context of the transnational provision of services in the EU. This includes data on:
The information obligation also applies to agreements on work performed outside the employment relationship in the newly inserted § 77a and § 77b of the Labour Code, which essentially reiterate the above provisions on information on the employment relationship and posting.
If the information is provided in electronic form, the information must be accessible to the employee in such a way that the employee can save and print it; the employer must keep proof of the provision of the information to the employee.
Changes also await us in the regulation of remote work, although compared to the originally published and widely media-hyped text of the amendment, the changes are ultimately of a rather minor nature, with the exception of the lump sum amount of reimbursement of expenses, which will hopefully bring clarity to the issue of reimbursement of expenses and its taxation.
The amendment distinguishes between remote work unilaterally ordered by the employer and remote work agreed between the parties.
It will now be possible, on the basis of the experience of the Covid era, to order remote work unilaterally. However, the possibilities for such order are very limited. It will only be possible to order remote work on the basis of a decree issued by a public authority and for a strictly necessary period of time if the nature of the work allows it. At the same time, the employee will have to indicate the location of the remote work site suitable for such work, or to state that no such site is available.
In other cases, remote work will only be possible by written agreement with the employee. The agreement may be separate but may also be a part of an employment contract or DPP and DPČ. The amendment no longer provides for any mandatory requisites of such an agreement and therefore leaves its content to the will of the parties. However, this also means that remote work can no longer be regulated exclusively as a benefit in the employer’s internal regulations but must always be subject of an agreement between the parties. In this context, the transitional provisions stipulate that if a written agreement on the conditions of remote work has not been concluded before the amendment entered into effect, the employer shall conclude such a written agreement no later than 1 month after the amendment enters into effect, i.e. by the end of October 2023.
The concluded agreement may be terminated by both parties in writing with 15-day notice period, which may be shortened or extended at will by agreement of the parties but must be of equal length for both parties. The period of notice shall commence on the date of delivery. The notice does not have to be justified in any way.
The termination of the agreement shall not affect the duration of the employee’s employment.
The possibility to terminate the agreement may be contractually excluded.
A pressing topic is the reimbursement of costs related to the performance of remote work.
The amendment presumes that costs will primarily be reimbursed in the amount actually incurred by the employee. However, it is possible to agree with the employee, or stipulate in an internal regulation, that these costs will be fully reimbursed by a lump sum. The amount of the lump sum compensation is no longer stipulated by the Labour Code and the regulation is left to a decree of the Ministry of Labour and Social Affairs (proposed amount of CZK 4,60 per hour is expected based on the latest Ministry decree proposal, subject to regular indexation). The lump sum reimbursement is payable by the end of the following calendar month. In the private sphere it will be possible to provide a higher lump sum compensation, but according to the explanatory memorandum it should constitute taxable and insurable income of the employee. The lump sum compensation is granted for each hour of working remotely (shorter periods are added together for the purposes of compensation) and is rounded up to the nearest cent decimal.
Rather surprisingly, the Labour Code will now provide for the option to agree that the employee is not entitled to any reimbursement of expenses in connection with remote work. However, this requires an explicit (written) agreement (e.g. it cannot be set out in an internal regulation), which is something employers must bear in mind when drafting remote work agreements.
Persons working on the basis of DPP and DPČ agreements should only be entitled to reimbursement if this has been expressly agreed with them.
The originally planned and widely criticized entitlement of some employees to remote work has been completely abolished and only the possibility to request remote work has been enacted.
The employer does not have to approve such request (or demonstrate serious operational reasons or other circumstances of non-approval) but must give reasons in writing for refusing such a request.
The same group of employees can request remote work as can request a reduction in working time under the current legislation. The only difference is that the child age limit in case of remote work is set at 9 years, whereas for shorter working hours it is 15 years. The employer should word the refusal carefully to avoid discrimination, unequal treatment or other unlawful practices.
See the section on Carers’ rights: set out under 8 below for more information.
For the first time, the Labour Code contains an explicit legal regulation according to which it is possible to conclude (selected) employment documents in electronic form. This applies to the employment contract, the agreements on work performed outside the employment relationship as well as the agreements on their amendments or termination thereof. This is a change that practice has long called for.
For these purposes, it will be necessary to obtain from the employee his or her private electronic address (i.e. usually a private email address, possibly the employee’s private cloud storage address or the employee’s electronic address within a communications application) in writing.
Generally, the employee will be given the opportunity to withdraw from documents so executed within 7 days. However, this will not apply to termination agreements (i.e. termination of employment or DPP and DPČ). Furthermore, withdrawal will not be possible in those cases where the employee has already started acting according to the concluded document (e.g. the employee has started performing work according to an electronically concluded employment contract). Withdrawal will cancel the contract thus concluded from the outset, i.e. it will be treated as if it had never occurred.
Following the introduction of the possibility of electronic conclusion of certain employment documents, the range of documents that must be delivered to employee´s own hands has been logically narrowed down and other conditions of delivery have been adjusted.
Only unilateral documents, i.e. in particular termination of employment during the probationary period, notice of termination, immediate termination of employment, warning letter and salary assessment, are to be delivered into one´s own hands.
The employer will primarily deliver:
Delivery by post shall be secondary, if delivery cannot be made at the workplace.
In the delivery methods area, electronic delivery will be significantly simplified.
Electronic delivery will require the following:
However, the employee will no longer have to confirm receipt of the electronic message using his/her recognised electronic signature, which made this method of delivery effectively unusable in reality. The written acknowledgement can therefore take any form, provided that if the employee does not acknowledge receipt within 15 days, the document is deemed to have been delivered on the last day of that period.
Delivery to the employee’s and employer’s data box is also simplified:
The amendment refines the existing legislation by replacing the existing term “rest between shifts” with the term “daily rest“.
The Explanatory Memorandum adds that the decisive criterion for granting this continuous rest is a cycle of 24 consecutive hours and not the total time between the end of one shift and the start of the next shift. This intends, among other things, to help prevent possible circumvention of this regulation through overtime work.
The 24-hour daily rest cycle must include both the scheduled shift and any overtime work, on-call work and a continuous daily rest of at least 11 hours, or a reduced rest of at least 8 hours.
The wording is also clarified so that the employer is obliged to actually provide this daily rest and not just schedule it. A corresponding change in wording is also applied to the regulation of continuous weekly rest. The obligation to provide both longer daily rest (24 hours) and weekly rest (48 hours) to juvenile workers remains.
Parental leave is one of the important personal obstacles to work on the part of the employee.
In addition to the existing general regulation that the employee must notify the employer of an obstacle to work known to him in advance, the amendment provides that:
For reasons of legal certainty, a written form of the request is necessary. The employee’s right to apply for parental leave repeatedly, or to extend or terminate it and return to it again, remains.
The provisions of Section 241 et seq. of the Labour Code regulating the rights of those caring for others have been amended to a relatively significant extent:
The request should now be in writing and the employer’s reasons for not granting the request should also be in writing.
The Explanatory Memorandum further clarifies the intended application practice by stating that the request should be seen as the initiation of a dialogue on the change of the employment contract. Where the employer is willing to approve the request (agreeing in principle to shorter working hours or remote work), the employer will enter into negotiations with the employee and subsequently conclude an amendment to the employment contract, agreeing on all relevant matters. This should resolve previous disputes as to whether this constitutes an agreement on changed conditions or a unilateral approval (decision) by the employer, which the employer is then also entitled to change unilaterally. For the sake of completeness, it should be added that the parties are not restricted in their ability to agree on such changes only for a fixed time period (e.g. 6 months, 1 year, etc.).
From our point of view, the new regulation of the possible modification of working time and other conditions is rather unclear. However, in brief, the following applies:
Request for reinstatement or partial reinstatement of the original scope of working hours:
Request for further reduction of working time:
Request for other appropriate adjustment of working time:
In the context of shorter working hours, the Labour Code now provides for an express obligation to agree on shorter working hours in writing. In addition, for persons caring for a child under the age of one, the law also prohibits overtime order by the employer.
Despite considerable criticism from health professionals, the amendment reintroduces the possibility of additional agreed work in the health sector beyond the scope of generally permissible overtime. Its maximum scope is set at an average of 8 hours, or (in the case of ambulance service employees) 12 hours per week. This overtime work must be agreed in writing and comply with the statutory requirements. Employees shall not be pressured to conclude the agreement. The employer must keep a list of the employees with whom the agreement has been concluded and must also inform the competent labour inspection body of the application of the additional agreed overtime work.
The institute is introduced for a fixed period, from 1 October 2023 to 31 December 2028.
In connection with the amendment to the Labour Code, the employer should take the following factual/practical steps: