The Labour Code requires employers to provide employees with a written employment contract in order for the employment to be valid. Employment contracts can be in any language and must be agreed before the commencement of work. Employers should give a copy to the employee and keep a copy for themselves.
Employment contracts must cover the following details:
It’s not mandatory to include the employee’s remuneration in the contract (although the amount must be agreed on before the beginning of work). If not included, there has to be a separate agreement stating the monthly gross income in Czech Koruna. Employment agreements that don’t specify the rights and obligations of employees must be presented to them in writing within a month of commencing employment, which includes any data changes and the following details concerning the employment:
On the commencement of employment, the employee must be acquainted with the statutory provisions and other rules concerning the safeguarding of occupational safety and health, which he/she must observe during performance of work. The employee must also be acquainted with the collective agreement and internal regulations.
The consent may be required only exceptionally, such as in the case when the employer wishes to process personal data that isn’t necessary to process in order to fulfil legal or contractual obligations.The conditions for termination, the employer’s obligation to assign work to the employee and ensure health and safety at work are all implied terms in every employment contract, which don’t need to be spelled out to be biding.
Terms and conditions of an employment contract may be amended in writing only and by mutual agreement between the employer and the employee. Companies that don’t provide employees with an employment contract in writing may be subject to a fine of up to CZK 10,000,000 by the Czech labour inspection authorities.
Employees are entitled to receive an itemised pay slip by the end of the following month after the work was carried out, stating their pay rate, grade, and pay date. Pay slips must also break down any deductions from the employee’s pay. The pay slip can be delivered in a digital or physical form, and wages must be rounded up.
In the absence of an agreement, wages must be paid at the workplace during working hours.
Employees have the right to be protected from discrimination at work and during all stages of the employment cycle, from interviews to termination. If an employee brings the discrimination concern to the court, the burden of proof passes exclusively to the employer.
Employees are protected from being discriminated based on gender; racial, social, or ethnic origin; nationality; age; sexual orientation; marital and family status or obligations to the family; union membership; language; property; religious and political beliefs; and physical or mental disability.
First, the employee can file a complaint, and the employer is obliged to discuss it with the employee. Otherwise, they’re exposed to the risk of a fine of up to CZK 400,000.
Subsequently, the employee may notify the labour inspection, and the labour inspection may impose a fine of up to CZK 1,000,000 on the employer, and up to CZK 500,000 in the case of discrimination in the field of a renumeration.
All employees have the right to be treated equally at work with respect to the working conditions, regardless of gender, disability, or any other grounds for discrimination. Employers should give the same benefits, training, and promotion opportunities to all employees and pay the same for work of the same value and conditions.
Probationary periods are not mandatory, but they are very common for all levels of employment. For probationary periods to be valid, they must be specified in the employment agreement and agreed on before the commencement of work. They cannot last longer than three months (six months for managerial roles).
During this period, the employer can cancel the contract without being bound by dismissal protection laws.
For fixed-term contracts, the probationary period cannot be longer than half of the agreed employment period.
Employees with a disability have a right to reasonable accommodation of their workplace. Employers have the obligation to secure, at their own expense and by means of technical and organisational measures, the necessary adjustment of the working conditions, adjustment of workplaces, establishment of sheltered working sites, training or instruction of such employees and increase in their qualifications in the performance of their regular employment.
There are no special regulations protecting whistle-blowers at the moment, but a recent European directive has been adopted, which must be implemented by the end of 2021. An employer must not put an employee at a disadvantage merely because they have lawfully claimed rights arising from the employment relationship. An employee who submits a genuinely held complaint in good faith cannot be dismissed or subjected to any detriment as a result of that action.
During a business transfer, employees are transferred automatically to the new employer and cannot be dismissed before or after the transfer. The rights and obligations of the employment relationship are automatically retained if:
a) the activity is performed after the transfer in the same or similar manner and scope;
b) the activity does not consist wholly or mainly in the supply of goods;
c) immediately prior to the transfer, there is a group of employees which was deliberately created by the employer for providing this activity;
d) the activity is not intended to be short-term or does not consist of a one-off task; and
e) property is transferred, or the right to use it, if such property is essential for the performance of this activity, or a substantial part of employees used by the current employer to perform the activity is taken over, if this activity depends substantially on employees, not on assets.
If all these are fulfilled, the new employer inherits the same responsibilities and must uphold the same employment conditions as stipulated on the employee’s employment agreement with the transferor, while the transfer has no legal consequence for the employee.
Employers must inform and consult with all employees being transferred directly, at least 30 days before the transfer takes place. In case of companies with trade unions or work councils, the employer must inform and consult with them instead (breaches lead to a fine of up to CZK 200,000). The legal, economic, and social consequences of the transfer must be discussed — together with the reasons, date of transfer, and the likely effect of the transfer on the workforce.
Employees who give their notice upon learning about the transfer must have their employment terminated at the latest on the day preceding the day when the transfer enters into effect. The employee may seek a determination at the court that the employment relationship was terminated on the grounds of considerable impairment of working conditions in connection with the transfer. In such a case, the employee may be awarded with severance payment in the same amount as in the case of notice due to organisational changes.
Individuals who are dismissed from work (except in cases of gross misconduct) and are seeking a new job are entitled to unemployment benefits from the social security authorities if they have made Social Security contributions for a minimum of 12 months in the last two years. Regardless of the reason for the employment termination, individuals younger than 50 years of age are entitled to up to 5 months of unemployment benefits. Those aged 50 to 55 are entitled to 8 months of unemployment benefits, and those over 55 are entitled to 11 months.
The European General Data Protection Regulation (GDPR) rules apply in the Czech Republic, granting the right to privacy and the right to determine who is to receive personal data.
The employer may process personal data for
Employers controlling data have the duty to keep records of their data-processing activities, particularly with respect to personal data processed systematically and with respect to all employees’ personal data. Companies must also inform employees about the processing taking place and secure the processed data by implementing appropriate technical and organisational measures depending on the type of data processed and its extent.
Companies can transfer personal data within the members of the European Union and the European Economic Area, which adhere to the GDPR rules, if they have legal reasons to do so. For data to be transferred outside these parameters, the recipient of the data must ensure an adequate level of protection.
Employees are entitled to paid time off either by the employer or the social security authorities (see the Leave section for more details) in different circumstances:
Employers need to have a valid and recognised reason to terminate the employment of an employee. The reasons recognized by the Labour Code are as follows:
Some employees are protected from being dismissed during certain periods of their lives, as follows:
Employers have the duty to care for the employees’ health and safety at work, regardless of whether the employee works in office or from home. Companies have the following duties to comply with:
Non-competition clauses are valid and regulated by the Labour Code in the Czech Republic only if adherence to them can be justly required from the employee with regard to the nature of information, knowledge, and operational and technological know-how that the employee acquired during the employment relationship — i.e., this applies to managerial and key employees only. Employers can impose in writing a non-competition clause that prevents employees from engaging in a gainful activity in a similar industry for a certain period after termination of employment. Non-competition clauses are valid for a maximum of one year from the end of employment, and employees are entitled to employer-provided compensation of at least half of the employee’s average monthly salary for each month of adhering to the clause.
Employees may engage in a gainful activity similar to the business activities of the employer during employment only with the company’s prior written approval. The employer may withdraw from a non-compete agreement only during the existence of the employment relationship. The employee may terminate the non-compete agreement if the employer fails them with compensation within 15 days of its due date. In that case, the agreement ceases to be valid on the first day of the calendar month following the delivery of the notice.
A penalty can be applied in case an employee breaches the non-competition clause. The amount of the contractual penalty must be reasonable in connection with the conditions of the non-competition clause. Generally, the penalty will be considered reasonable where it equals a maximum of the amount of the total remuneration paid for not competing multiplied by two.
Employees are entitled to severance pay in situations where the company is being liquidated or relocated, or because the employee’s role becomes redundant as a result of the company’s re-organisation.
Severance pay is based on the length of employment. Employees with less than one year of employment are entitled to one month’s average salary; those with one to two years of employment are entitled to two months; those with more than two years of employment are entitled to three months.
Employees who suffer a work accident, get an occupational disease, or are exposed to the threat of an occupational disease are also entitled to severance pay. The pay must be at least 12 times the employee’s average month salary. Severance pay is paid out by the employer on the nearest agreed payment date and doesn’t include any social and health insurance contribution.
While companies have the economic rights to their employees’ work created during employment, employees retain personal rights to their creations. It is, however, presumed that the employee has given their consent to the work being altered, made public, or marketed under the employer’s name. It is recommended to include consent in the employment contract so that it cannot be challenged by the employee.
Employees are entitled to additional remuneration in situations where the salary paid to the employee responsible for the creation is obviously disproportionate to the profit gained from using rights to the employee’s work.
In the case of inventions, if an inventor has made an invention as part of their work deriving from an employment relationship, the right to the patent passes to the employer. The employee must notify the employer and hand over the relevant documents to the employer, and the employer then has three months to exercise their right to the patent. Where the employer does not claim the right to the patent, the right reverts to the inventor. Any inventor who has made an invention under an employment relationship is entitled, where the employer claims the right to the patent, to appropriate remuneration from the employer for that patent right.