Czech labour law in flux: another "flexible amendment" to the Labour Code

The amendment seeks to ease some of the rigid provisions of the Labour Code and to promote greater flexibility in the labour market. While certain changes benefit employers, others are designed to help employees reconcile family and working life. The amendment also fundamentally changes well-established institutions, such as the length of the notice period and how it is determined. Below is a brief summary of the main points of the amendment.

Probationary period

The maximum length of the probationary period is extended from the current three months to four months for regular employees and from six months to eight months for managerial employees. Additionally, the probationary period can now be extended, but only within the above maximum limits.

Notice period

For specific grounds for termination (including employee misconduct), the notice period is reduced from the current two months to one month. Additionally, the start of the notice period has been changed. Previously, it began on the first day of the month following the month of delivery of the notice; now, it will start on the day the termination notice is delivered and end on the corresponding date in the following month(s).

Merging of termination grounds for employee's health

Currently, the Labour Code differentiates between two separate grounds for termination based on the employee's health, one for an occupational accident or disease and the other for a general illness (i.e. for a reason unrelated to work performance). As there was often confusion about which grounds for termination to use, the two were combined. Employers should no longer need to worry about lawsuits seeking the invalidity of dismissals on these grounds. Additionally, severance pay in the case of a work-related accident will be replaced by special compensation, which will be covered by statutory insurance.

Holiday pay in the event of invalid notice

In the event of invalid notice, the employee is entitled not only to compensation for lost wages but also to holiday pay.

Extended time limits for termination due to employee misconduct

Currently, an employer can terminate an employee for misconduct only if the breach occurred within the past year and the employer became aware of it less than two months ago. As these time limits were often rightly seen as too short (e.g. for conducting internal investigations), they are being extended to 15 months from the occurrence of the breach and three months from its discovery.

Fixed-term employment

Fixed-term employment can only be renewed twice. However, this limitation will no longer apply when an employee is replacing another employee on maternity or parental leave. Nonetheless, the overall maximum duration of nine years for a fixed-term employment relationship will still apply.

Co-existence of multiple relationships for the same type of work

Employees are currently prohibited from concluding multiple employment contracts with the same employer for the same type of work. Under the new regulation, this will be allowed for employees on parental leave who may, in addition to the standard employment contract, conclude agreements on work outside of the employment relationship for the same type of work.

Changes to pay

The current legal regime providing for payment of wages in cash at the workplace is being discontinued, as it no longer reflects the reality where the vast majority of wages are paid via cashless transfer. Employers will now be allowed to pay wages by wire transfer without the employee's explicit consent. Additionally, the range of situations in which wages can be paid in a currency other than Czech crowns is being expanded. Previously, this was possible only if the employee worked abroad. Now, it will include a broader group of foreigners as well as persons with a "foreign element".

Work from the age of 14

Work for minors from the age of 14 during the summer holidays will now be regulated.

Public sector employees will be permitted to engage in business activities

Selected public sector employees will now be allowed to serve as members of the bodies of legal entities running a business.

As can be seen, the range of provisions affected by the amendment is extensive. For some of these changes, it will be advisable to prepare, particularly by updating template employment contracts and related documentation. Employers should take advantage of the opportunity to extend the probationary period or, conversely, shorten the notice period.