A new Employment Act for the Czech Republic

Czech Republic

A new Employment Act will come into force in the Czech Republic on 1 October 2004, along with separate legislation making consequential amendments to a further 55 Acts. Although the new laws mainly regulate public administration of employment, there are a number of changes affecting private sector employers, including:

  • more limited rights for employees to carry forward accrued unused holiday entitlement to the next calendar year. In principle, employees carrying forward holiday from the previous calendar year who do not use it before the following 31 October will be obliged to use it immediately (from 1 November).
  • employers will no longer be obliged to pay employees in lieu of their 4 weeks statutory holiday except in case of termination of employment.
  • the use of seconded/outsourced workers is expressly permitted but only through licensed employment agencies. The principle of outsourcing is that the employment agency employs the worker and retains all principal obligations of an employer (such as paying wages, operating payroll etc.), whereas the worker works for user, who has the right to give the worker day-to-day instructions. There are detailed regulations, including:
    • a limit of 12 months on outsourced workers working for any one user (with  certain exceptions).
    • the user and the agency must ensure that workers enjoy the same pay and working conditions as the user's own employees with the same skills doing the same job.
  • a new definition of a disabled person is introduced. The way in which the new definition is interpreted by the relevant authorities will determine whether or not it increases the number of people who are classified as disabled.
  • there are new rules governing the employment of foreigners (more detailed information on this will be provided in our next law now release).