Latest Developments in the Area of Labour Law New Labour Code

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Latest Developments in the Area of Labour Law
New Labour Code

• February 13, 2007

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Contents

• Basics of the labour law reform
• Employment relations (varc-system)
• Employment relationships, beginning of employment
  relationship
• Termination of employment relationship
• Other agreements under the labour code
• Working hours
• Leave
• Remuneration
• Sickness
• Compensation of damages
• Collective agreements

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Basics of the labour law reform

• Act 65/1965 Coll. Labour Code
• contractual liberty only when expressly permitted
  
• new Labour Code 262/2006 Coll.
• basic principle everything is allowed that is
  not expressly forbidden (section 2, 363, para 2
• Act 264/2006 Coll.
• Decrees 567, 589, 590/2006 Coll.
• criticism and discussion
• Myths and actual fears
• Amendments, correctionsreforms are awaiting

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Basics of the labour law reform

• content of new labour code
• 396 sections including many areas that were
  formerly covered by separate laws
• relation between labour code and civil code
  withdrawal from contract?
• new definition of dependent work, section 2,
  para. 4,5 Labour Code
• deletion of 13 Employment Act
• transitory provisions

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Employment relationships

• employment relations not always the classic
  employment relationship
• No more nomination into functionManagerial
  contract for leading employees
• New Agreement on recall and resignation ,
  Section 73
• section 3, 30-73 Labour Code
• deletion of vedlejsi pracovni pomer
  (transformed into normal employment relationship)
• agreements on work performed outside an
  employment relationship (section 74, 77)

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Termination of Employment Relationship

• Manners of termination - Section 48 et seq.
  Labour Code
• Agreement
• Notice
• Without notice
• Dissolution during trial period
• Expiration of the term of employment
• Death of the employee
• Cancellation of the residence permit
• Expatriation
• According to the new regulation, by expiration of
  the term, for which the employment permit has
  been issued.
• New Termination of the employment relationship
  by death of the employer - Section 342(1) Labour
  Code
• Except for cases of continuing business under
  Trades Act

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Termination of Employment Relationship

• Agreement on termination of the employment
  relationship - Section 49 Labour Code
• New Written form under the sanction of
  invalidity.

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Notice

• Notice Written form and delivery - Section 50
  Labour Code
• Termination by e-mail?
• Notice periods Section 51 Labour Code
• New Always two months, at the least longer
  periods can be agreed but for both sides.
• Notice by the employer Section 52 et seq.
  Labour Code
• New The employers duty to offer a new job has
  been abolished
• Only for reasons stipulated in Section 52 Labour
  Code
• Notice prohibited during the protective period
  Section 53 and Section 54 Labour Code new The
  prohibition of notice applies also if the
  employee is transferred within the place(s) of
  work to perform work in accordance with their
  employment contract
• New Special protection for certain employee
  categories (e.g. single parents with children
  under 15) is not stipulated in the Labour Code
  anymore.

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Notice

• Notice due to organisational changes Section 52
  lit. a) c) Labour Code
• Severance pay Section 67 Labour Code 3223?
• New Severance pay in the amount of three average
  monthly earnings, at the least.
• Notice due to health reasons Section 52 lit.
  d),e) Labour Code
• New reason for termination on health grounds
  (industrial accident, occupational disease)
  Section 52 lit. d)
• New Severance pay in the amount of twelve
  average monthly earnings, at the least Section
  67 Labour Code.
• Notice due to the employees failure to meet the
  prerequisites or requirements for the performance
  of their work Section 52 f) Labour Code
• Notice due to breach of duties arising from legal
  regulations applicable to the work performed by
  the employee Section 52 lit. g) Labour Code
• New Instead of notice due to a breach of work
  discipline.

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Immediate Termination of Employment Relationship

• By the employer Section 55 Labour Code
• Upon sentencing for a criminal offence specified
  in Section 55 Labour Code
• New Due to material breach of duties arising
  from legal regulations applicable to the work
  performed by the employee.
• By the employee - Section 56 Labour Code
• Employers failure to transfer the employee to a
  different suitable work
• Employers failure to pay wages or wage
  compensation to the employee
• New Employers failure to pay any portion of
  wages or wage compensation ? potential risks?
• New Employees are entitled to severance payment
  pursuant to Section 67. Three salaries? 12
  salaries? Better check your payroll accountants
  liability insurance.

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Working Hours

• Working hours and working hours schedule -
  Section 78 et seq. Labour Code
• New Length of the working hours for employees
  under 18 is 30 hours a week Section 79 (2) lit.
  d) Labour Code
• New Stand-by on the place of work also counts as
  working hours - Section 78(1) lit.a) Labour Code.
  Exemption for employees in certain sectors
  Decree 589/2006 for traffic
• Even schedule of working hours - Section 82 et
  seq. Labour Code
• New Flexible schedule of working hours in case
  of even scheduling off-set period is one week
  Section 85.
• Uneven schedule of working hours Section 83 et
  seq. Labour Code
• New Off-set period maximum 26 weeks, or
  maximum 52 weeks if stipulated in a collective
  agreement, Section 83 Labour Code
• New Flexible schedule of working hours in case
  of uneven scheduling off-set period is four
  weeks Section 85 Labour Code
• New Working hours account Section 86 Labour
  Code

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Working hours

• New regulation of the working hours accounts
  Section 86 Labour Code, Section 87 Labour Code
• Can be stipulated in a collective agreement or
  prescribed in the employers internal
  regulations
• Requires prior consent of all employees who will
  be working on the basis of working hours
  accounts
• Offset period see uneven schedule of working
  hours
• Duty of the employer to keep working hours
  accounts and wage accounts of the employees
• Duty of the employer to show every week the
  difference between prescribed weekly working
  hours and hours actually worked off.

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Working hours

• Wage under the working hours account system -
  Section 120 Labour Code, Section 121 Labour Code
• During the offset period wage in the same
  amount, stipulated in the collective agreement or
  internal regulation minimum 80 of average
  earnings
• The wage account shows the wage in the constant
  amount and the wage actually achieved in the
  calendar month
• For the offset period, the employee is entitled
  to claim the difference between the wage actually
  achieved and the wage in the constant amount.
• Insolvency of employer?

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Work Breaks and Overtime Work

• Work breaks Section 88 Labour Code and Section
  89 Labour Code
• New The work break can be divided into several
  shorter breaks, lasting at least 15 minutes each
  
• New Safety breaks.
• Ordered and agreed overtime work Section 78
  Labour Code, Section 93 Labour Code
• New Always Extra pay for overtime work or
  compensatory time off, even for managerial
  positions Section 114 Labour Code.
• Pragmatic solutions?
• Lump sum payment for overtime?
• New contracts?

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Leave

• Types of leave Section 211 Labour Code
• Annual leave in a calendar year - Section 212
  Labour Code, forced leave form Nov.1 remains
• Leave for days worked-off and extra leave (new
  1/12 of the annual entitlement for every 21
  worked-off days) Section 214 Labour Code and
  Section 215 Labour Code
• Other types of leave are not amended by the new
  regulation
• Decree 590/2006 own wedding only one paid day
  off, the other day without salary
• Calculation of annual leave in a calendar year -
  Section 213
• Four weeks in the private sector
• New Contractual freedom in the prolongation of
  leave, not necessarily entire weeks
• New If the proportionate amount of the leave is
  less than a day, it is rounded down to a half day
  Section 216 Labour Code
• Leave taking Section 217 et seq. Labour Code
• New - The employer cannot order the employee to
  take their leave not even until the end of the
  subsequent calendar year due to the employees
  being on parental leave the employer shall
  schedule the leave taking only after the end of
  the parental leave - Section 218(3) Labour Code
• New Schedule of leave taking
• New The employer must inform the employee of the
  scheduled leave taking minimum 2 weeks in advance
  in writing. The employer may also agree on a
  shorter period of time with the employee
• Company holidays 2 weeks.

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Remuneration

• New minimum wage CZK 8.000 per month, CZK 48,10
  per hour
• But always at least 10 in addition for work in
  aggravated conditions

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Sickness

• Changes (employers would be liable to pay first
  two weeks of sickness insurance against reduction
  of social security payments) have been delayed
  until 1.1.2008, unclear whether special rules
  will apply for SMEs
• Better possibilities for control ?
• Sickness in trial period prolongs three-month
  term

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Compensation of Damages (apart from compensation
for industrial accidents and occupational
diseases)

• Employees liability for damage Section 250 et
  seq. Labour Code
• General liability - Section 250, Section 257
  Labour Code
• Liability for deficit in entrusted values, which
  the employee is accountable for - Section 252 et
  seq. Labour Code
• New Agreement on liability (new title of the
  agreement),
• New Only such things of value can be entrusted
  to the employee that the employee may dispose of
  for the entire period, for which these things
  have been entrusted to the employee
• Liability for the loss of entrusted things -
  Section 255 et seq. Labour Code
• New If the entrusted things value exceeds CZK
  50,000, it is necessary under the sanction of
  invalidity to enter into a written agreement on
  liability for the loss of entrusted things in
  other cases a written certificate of receipt is
  sufficient.
• New Possibility to withdraw from the agreement
  if the employer fails to create conditions for
  securing protection of the entrusted things
• New Termination of the agreement by withdrawal
  or by termination of the employment relationship.

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Compensation of Damages (apart from compensation
for industrial accidents and occupational
diseases)

• Liability for the production of rejects is not
  governed separately in the Labour Code any more
• New Amount of damage caused by a senior employee
  who is the employers statutory body or
  representative Section 262 Labour Code
• Has not been regulated before, the amount of
  damage is determined by the person who appointed
  the employee into their position.
• Do not forget problems with parallel employments!
  Liability under the Commercial Code!

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Compensation of Damages (apart from compensation
for industrial accidents and occupational
diseases)

• Employers liability for damage Section 265 et
  seq. Labour Code
• General liability Section 265 Labour Code
• Liability in the event of damage averting
  Section 266 Labour Code
• Liability for damage on things left in charge of
  somebody Section 267 Labour Code
• New Extent of damage on things left in charge of
  somebody The limit of the employers liability
  for things which the employee does not usually
  wear or bring to work or which the employer did
  not take over into special custody, is CZK 10,000
  Section 268 Labour Code

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Collective Agreements

• Types of collective agreements Section 23
  Labour Code
• Plant and higher level agreements Section 23
  Labour Code
• New So-called group collective agreements
  Section 23 Labour Code
• Binding effect and term of collective agreements
  Section 25 Labour Code, Section 26 Labour Code
• Binding for employees, higher level agreements
  are binding for trade organisations
• New Higher level collective agreements are
  binding for the members of employer organisations
  and members who have left such an organisation at
  the time of the agreements effectiveness
• New Possibility to conclude a collective
  agreement for an indefinite period of time
  notice period 6 months
• New reaction time after proposal 7 days
• Plurality of union organisations at the employer
  Section 24 Labour Code
• The employer negotiates with all union
  organisations who act in concert
• New If the union organisations fail to agree,
  the employee is entitled to conclude the
  collective agreement with the union organisation
  having the greatest number of members working
  with the employer.

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Summary

• What has to be done in your company?
• Discussion
• What must be changed in the new Labour Code?

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Contact

• bpv Braun Hakovcová
• Palác Myslbek, Ovocný trh 8
• CZ-110 00 Praha 1
• Tel. [phone]
• Fax [phone]
• prague_at_bpv-bh.com
• www.bpv-bh.com

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