The Czech Parliament and government have been unusually active in the field of labour law recently so there is a lot of legal news.
To keep up with the large number of changes, we bring an overview of the most important ones introduced by the latest so-called transposition amendment to the Labour Code with effect from 1 August 2024:
Automatic indexation of the minimum wage
The principle of determining the national minimum wage has completely changed. The minimum wage was previously determined by a special government decree, but now, an automatic indexation mechanism for its determination has been introduced into the law.
The minimum wage will now be determined as the product of a forecast of the average gross monthly wage in the national economy and a coefficient set by the government.
The Ministry of Finance will publish the average wage forecast by 31 August each year. The coefficient will be set by a government decree for 2 years in advance so that the minimum wage is proportionate to the set parameters (e.g. the cost of living or the rate of wage growth in the economy).
By 30 September each year, the Ministry of Labour and Social Affairs will publish the minimum wage for the following year. The minimum wage for 2025 has not yet been determined, but the Ministry of Labour and Social Affairs expects a significant increase in the minimum monthly wage to approximately CZK 20,800 (approx. EUR 830).
Abolition of the guaranteed wage in the private sector and introduction of guaranteed salary
The so-called guaranteed wage (basically another higher minimum wage for 8 groups of jobs according to their complexity, responsibility and workload) has been abolished, which will simplify and clarify remuneration in the private sector.
However, four levels of the so-called minimum guaranteed salary have been introduced, which will apply only to employees in public sector.
Collective bargaining with multiple trade unions
The amendment addresses a relatively common and previously difficult to resolve situation where several trade unions operating at an employer could not agree on a common approach for negotiating a collective agreement and for this reason the collective agreement was impossible to conclude.
Now, if there is no agreement between the trade unions on a joint approach within 30 days from the commencement of mutual negotiations, the employer may, under specified conditions, conclude a collective agreement only with the trade union with the largest number of members employed in an employment relationship at the employer (or with several trade unions that together having the largest number of members).
The other trade unions must be informed of this procedure and the submitted and final draft collective agreement must be discussed with them.
However, employees will have the option to block such collective agreement if a majority of them oppose the procedure within 30 days from the employer’s notification.
Remuneration for zero-hours contracts (DPP/DPC) including premiums
A major new feature in the area of remuneration is the possibility to negotiate remuneration from the zero-hour contracts – “DPP” and “DPČ” (i.e. agreement on performance of work) and agreement on work activity) including possible night work, work in a difficult working environment or work on Saturdays and Sundays. Since last year, employers have been obliged to provide these premiums also to these employees.
However, the agreement must stipulate the maximum amount of work in the specified difficult working conditions that has been taken into account in such an arrangement and the amount of additional premiums that would otherwise be granted to the employee for this reason. The employee will continue to be entitled to premiums for periods of work in excess of the stipulated amount.
We therefore recommend that you consider concluding amendments to existing agreements and do not forget to include this new provision in new ones.
Cancellation of annual leave taking schedule
Employers are no longer required to issue a written schedule for annual leave each year, which also required a prior approval of the trade union and works council. However, other rules and principles of annual leave planning remain unchanged.
Longer shifts and a new premium for healthcare workers
Employees in the healthcare sector can now be scheduled for shifts of up to 24 hours, for which they will be entitled to a new premium of at least 20% of their average earnings from the 13th hour worked.
Employee self-scheduling of working time (from 1.1.2025)
Starting next year, it will be possible to agree in writing with an employee (both in an employment relationship and on “DPP” / “DPČ”) that the employee will schedule their own working hours, subject to the basic restrictions of the Labour Code. Such an agreement can be terminated by both parties with 15 days’ notice period.
Until now, such self-scheduling by agreement has been explicitly allowed only for remote workers, and in other cases it has not been possible according to prevailing opinions.
Allowing the scheduling of working time by employees themselves outside the home office is a major step towards more flexible forms of work and a reduction of the administrative burden for employers, while there may also be an advantage for employers since some obstacles to work will not be applicable.
The upcoming “flexi-amendment” of the Labour Code
The Chamber of Deputies is currently debating another bill amending the Labour Code, which aims to significantly streamline employment relationships.
The proposed changes include in particular:
- extension of the maximum duration of the probation period (up to 4 months, 8 months for managerial employees); in addition, the probation period can be extended after it starts;
- the notice period will start from the date of delivery of the notice, and also, in case of breach of duties or failure to meet requirements, the statutory notice period will be reduced to one month;
- certain groups of employees can be paid in foreign currency;
- the employer will be obliged to guarantee employees on parental leave the same job until two years of their child’s age; and
- a special compensation financed by employers’ insurance for employees who lose their jobs due to occupational accidents or diseases.
The flexi-amendment bill currently foresees to be effective as of 1 January 2025.
However, significant changes may occur during the legislative process. We are monitoring the legislative process and will keep you informed of the final proposal.
By Radek Matou, Partner, and Ondrej Sudoma, Senior Associate, Eversheds Sutherland
