Legal solutions for less work for employees in Czech

Possible options - no work available for employees

How to deal with less work for employees in Czech Republic?

There are in principle the following options available in the Czech Republic if the Czech employer has no work assignable to the Czech employees.

Option 1 – Partial termination (collective dismissal) of employees without work

If the employer has no work to be assigned to the Czech employees the employment relationship can be terminated based on “organisational changes”. The Czech employer can decide on the “organisational changes” anytime and identify the employees, which shall be terminated. As already discussed, the notice period shall start to run on the first day of the calendar month following delivery (service) of the notice and come to an end upon the expiry of the last day of the relevant calendar month. This means, that if the termination is announced (termination notice is served) at the beginning or in the course of the calendar month, the employer still has to pay the full salary to the employee until the end of the calendar month disregarding of the fact, that the employee will not perform any work. If the employer intends to conclude a termination agreement with the employees, the same salary (payment) shall be included in the termination agreement.

Option 2 – Short-time working of employees with partial work (60% salary)

Pursuant to Section 209 of the Czech Labour Code the employee can be paid a compensatory wage at the minimum level of 60% of his average earnings if “some other obstacle to work on the side of the employer consists in a situation in which the employer is unable to provide an employee with work within the scope of weekly working hours due to a temporary drop in sales of the employer's products or due to a drop in demand for services rendered by the employer (“partial unemployment”, also referred to as “short-time working” or “temporary layoffs”; in Czech „částečná nezaměstnanost“).” This possibility has to be regulated by internal regulation of the employer unless there is a trade union active, in such a case an agreement between the employer and the trade union organization is required.

Please note, that the Section 209 of the Czech Labour Code shall be applied only in case of “temporary” obstacles and we are of the view that the court will interpret this provision in a way, that only in case of “short-time working” (for example is the employee stay at home only one working day per week), i.e. not in case the employee shall stay at home the whole week. The purpose of this provision is not to solve a situation, when the employer does not have the work for the employee at all and such situation should be solved by means of termination of the employment relationship.

Despite there is a certain room for application of the Section 209 of the Labour Code and for saving the costs, we believe, that this could result in negative attitude of the employees and the actions of the employer (reduction of the salary) could be contested by them at court anyway. In addition, the employees could establish trade unions and could file different complaints with Czech authorities (State Labour Inspection Office etc.) and complicate the subsequent termination procedure.

Option 3 – Employees stay at home with compensatory wage

Pursuant to Section 208 of the Czech Labour Code “Where an employee cannot perform work due to obstacles to work on the side of his employer, the employee shall be entitled to compensatory wage or salary in the amount of average earnings…”

Option 4 – Working hours account (“konto pracovní doby”)

Pursuant to Section 86 and 87 of the Czech Labour Code the employer can introduce a “working hours account” system, which is a method of distributing working hours and this method may only be introduced on the basis of the relevant collective agreement or, where there is no trade union organization operating in the employer's undertaking, on the basis of the internal regulations (internal rules). Where a working hours account is applied, a settlement period may not exceed 26 consecutive weeks. Only the relevant collective agreement may extend this period up to a maximum of 52 weeks. Only where it is laid down in the relevant collective agreement, overtime work that was performed by an employee within the working hours account scheme in a determined settlement period (which is fixed in the collective agreement and which does not exceed 52 consecutive weeks) and that is in a maximum scope of 120 hours may be credited to the immediately following settlement period. Where working hours accounts are used, the employer shall keep a working hours account for every employee. An employee's working hours account shall state: (a) the standard weekly working hours or, where a part-timer is concerned, the working hours, agreed; (b) the distribution of working hours to individual working days, including the start and the end of a shift; and (c) the hours worked on individual working days and per week. Where working hours accounts are used and a period shorter than 26 (52) weeks is applied, a difference between (relevant multiples of) the standard weekly working hours, or the agreed working hours of a certain part-timer per week, and the number of hours worked over such shorter period shall be calculated at its end.

For more information, contact us at:

JUDr. Mojmír Ježek, Ph.D.

ECOVIS ježek, advokátní kancelář s.r.o.
Betlémské nám. 6
110 00 Praha 1
e-mail: mojmir.jezek@ecovislegal.cz
www.ecovislegal.cz

About ECOVIS ježek advokátní kancelář s.r.o.
The Czech law office in Prague ECOVIS ježek practices mainly in the area of Czech commercial law, Czech real estate law, representation at Czech courts, administrative bodies and arbitration courts, as well as Czech finance and banking law, and provides full-fledged advice in all areas, making it a suitable alternative for clients of international law offices. The international dimension of the Czech legal services provided is ensured through past experience and through co-operation with leading legal offices in most European countries, the US, and other jurisdictions. The Czech lawyers of the ECOVIS ježek team have many years of experience from leading international law offices and tax companies, in providing legal advice to multinational corporations, large Czech companies, but also to medium-sized companies and individual clients. For more information, go to www.ecovislegal.cz/en.