Amendment to the Labour Code approved: what else has changed and what needs to be addressed first?

Following lively discussions and many revisions, we can finally look forward to the long-awaited amendment to the Labour Code whose main objective is to transpose EU directives on transparent and predictable working conditions and on work-life balance for parents and caregivers.

On Tuesday, the Chamber of Deputies voted on the Senate’s amendments, which, among other things, proposed postponing the amendment’s entry into force until 1 January 2024. However, the Chamber of Deputies stuck to the original proposal, so it will be necessary to react to the adopted changes as soon as possible. The amendment is now awaiting the President’s signature and subsequent publication in the Collection of Laws.

While the amendment comes into force on the first day of the calendar month following the date of its promulgation, i.e. most probably already on 1 October 2023, the effectiveness of some of the changes has been postponed until 1 January 2024 (e.g. holiday entitlement for agreement to perform work (abbreviated in Czech as “DPP”) and agreement on work activity (abbreviated in Czech as “DPČ”).

The new regulation mainly concerns work from home and other flexible forms of work, improvement of the position of employees working on a DPP/DPČ, simplification of delivery in employment relations and extension of the employer’s information obligation. A more detailed overview of the new regulation in these areas is provided below.

Employers should certainly not underestimate the new obligations, as they can face fines of hundreds of thousands of Czech crowns for non-compliance.

During the approval process, several changes were made to the original proposal, in particular:

• No precise requirements for a work from home agreement are stated
• It may be agreed with the employee in advance in writing that reimbursement of expenses for work from home is not applicable
• Lump-sum reimbursement for work from home includes reimbursement of all expenses (not just utilities and other listed expenses)
• The employer is obliged to provide written reasons for not allowing work from home for an employee caring for a child under the age of nine (the original proposal assumed the age of the child to be 15)
• The employer newly has the obligation to provide written reasons for not allowing shorter working hours if the request is made by a pregnant employee, an employee caring for a child under 15 years of age or another person dependent on assistance (the original proposal retained the current wording, where the employer is obliged to grant the request unless serious operational reasons prevent it, but without the obligation to provide written reasons if the request is not granted)
• Obligation to familiarize employees working on a DPP/DPČ with a written working time schedule at least three days in advance (the original proposal provided for a week’s notice), unless otherwise agreed

In light of the new obligations, we recommend that employers focus first on checking their work from home setup and verifying that written agreements are in place for all employees working from home.

Work from home and flexible forms of work

An employer may order remote work unilaterally only in exceptional cases and only where provided by law. In other cases, remote work is possible after the amendment only based on a written agreement between the employer and the employee. Compared to the original proposal, the law no longer stipulates the mandatory content of the agreement. The work from home agreement may then be terminated by agreement between the employer and the employee or by giving 15 days’ notice, unless the parties agree on a different length of notice.

If the employer currently has employees working from home without a written agreement, this agreement must be concluded additionally, no later than one month after the amendment comes into force, i.e. by 1 November 2023.

Employees may still be reimbursed for the actual costs that they prove to the employer or newly for a lump sum if the parties so agree or if this follows from the employer’s internal regulations. The amount of the “statutory” lump sum reimbursement is set by a decree of the Ministry of Labour and Social Affairs. An employer in the private sector may provide a higher lump sum compensation. However, only the amount up to the statutory lump sum will not be taxable, so any difference will constitute taxable income for the employee. As the lump sum compensation is set as an hourly rate, accurate records of the time spent by the employee working from home must be kept as a basis for payroll and to prove that the compensation or part of it is not taxable.

If work from home is requested, the employer is obliged to give written reasons for not granting it if the employee is pregnant, caring for a child under nine years of age or another person dependent on assistance.

If shorter working hours are requested, the employer is newly obliged to provide written reasons for not granting it if the employee is pregnant, caring for a child under 15 years of age or another person dependent on assistance.

DPP/DPČ

The aim of the amendment to the legislation governing DPP and DPČ was primarily to strengthen the position of these employees and give them more security. Employees working on a DPP/DPČ will now have to be informed of the written working time schedule at least three days in advance, unless they agree otherwise with the employer. They will be entitled to holidays, all work-related obstacles, statutory wage supplements (for working on public holidays, weekends, etc.), and in certain circumstances the right to request a transition to an employment relationship or to request written justification for termination of employment.

For the purposes of holiday entitlement, it will be assumed that the employee’s weekly working time is 20 hours. As in the case of an employment relationship, the minimum amount of leave for an employee working on a DPP/DPČ will be four weeks per calendar year. The change in holiday entitlement for DPP/DPČ will take effect from 1 January 2024.

If an employee working on a DPP/DPČ has worked for the employer for at least 180 days in the previous 12 months, they may request in writing to be employed by the employer based on an employment contract. The employer is then obliged to provide the employee with a reasoned written reply within one month at the latest.

In certain cases, the employee may also request written reasons for the dismissal, especially if they believe that the dismissal was given because they were asserting their legal rights.

In this respect, employers should think about whether the existing DPP/DPČ will need to be updated in any way, whether and what changes will need to be made to the payroll system in relation to these employees, etc.

Simplification of delivery of documents and conclusion of contracts

One novelty is the possibility to conclude certain contracts and agreements via an electronic communications network or service. In this way, it will be possible to conclude an employment contract, DPP, DPČ, amendments thereto and agreements on termination of employment or termination of a DPP/DPČ. The contract or agreement must be sent to an electronic address of the employee that is not in the employer’s possession (i.e. not a work e-mail) and that the employee has communicated in writing to the employer for this purpose. If these conditions are met, it is sufficient if the document is signed with a simple electronic signature (scan of signature, confirmation by e-mail). The employee will be able to withdraw from the contract or agreement thus concluded in writing, but only within seven days of the date of delivery to their electronic address and only if they have not already begun to work.

Only documents relating to the termination of employment, termination of DPP/DPČ (other than a termination agreement), dismissal or resignation from a managerial position and wage statements will still have to be delivered in person.

It will also be possible to render delivery in person electronically, provided that the employee has agreed to this method of delivery in writing and has provided an electronic address for this purpose (again, it cannot be an address in the employer’s possession). The document must be signed with the employer’s recognized electronic signature and must be delivered on the date on which the employee acknowledges receipt (compared to the previous arrangement, acknowledgement with the employee’s recognized electronic signature is no longer required) or upon the expiry of 15 days.

The simplification also applies to delivery to the employee’s data box, where the employee’s further consent is not required for this method of delivery. A document sent in this way is delivered on the date the employee logs in to the data box or upon the expiry of 10 days.

It is still possible to deliver to the employee in person at the workplace (or wherever the employee can be found) and, if it is not possible to deliver the document at the workplace, it may be delivered through the postal service provider.

Information obligation

The amendment extends the employer’s information obligation regarding the content of the employment relationship and shortens the deadline for compliance from one month to seven days from the commencement of the employment relationship.

If this information is not included in the employment contract itself, the employee newly must also be provided with information on the duration and conditions of the probationary period, more detailed information on the procedure for termination of employment, the professional development provided by the employer, more thorough information on working hours and rest periods, and the social security authority to which the employer remits the contributions for the employee. The employer also has a similar information obligation in relation to employees working on a DPP/DPČ. In addition, the employer has special information obligations in relation to employees assigned to the territory of another country.

Some of the information obligations can also be fulfilled by reference to the relevant legislation, collective agreement or internal regulation and, under certain conditions, information can also be provided in electronic form. The employer must be able to prove that the information was provided to the employee.

 

If you have any questions about the amendment or if you would like any assistance implementing the newly required obligations (e.g. preparation of a work from home agreement, review and update of DPP/DPČ, preparation of an internal directive governing work from home or documentation covering the newly required information obligations, etc.), please do not hesitate to contact the authors of this article Michal Zahradník and Dana Provázková or your contact person in our office.