When pursuing business activities in the Czech Republic, companies often use, in addition to their regular employees, services provided by employment agencies that provide their own employees to them. Agency employment represents a so-called economic lease of a labor force where an employment agency assigns (seconds) for consideration its own employees to work for another employer (user) for an agreed period of time. Employment agencies typically do not have all professions required by the user—therefore they need to perform an employee search for the user in the market first, and subsequently they employ and second them to the user for an agreed period of time.
The user then assigns work tasks to such agency employees and organizes work for them and generally treats them as regular employees, with the exception that the user is not authorized to take acts vis-à-vis such agency employees aimed at modification or termination of their employment relationship. Throughout the entire term of secondment, the salary (wage) is paid to agency employees by the employment agency as their actual employer.
The demand for agency employees keeps growing. Large production and logistics corporations now have up to 20 percent of their employees from employment agencies. Although agency employees typically work in positions requiring only a low level of qualification, companies requiring a higher level of qualification of employees, including a relevant track record (job experience), have also become accustomed to using services provided by employment agencies. This applies, for example, to companies operating in the pharmaceutical industry, where seconded employees usually work as business representatives and in managerial positions.
The legal regulation applicable to agency employment contained in the Czech Labor Code is rather brief (merely three sections) and this has caused a number of unclear issues and problems in practice. In particular, there are issues of ensuring such labor and wage conditions applicable to agency employees, which may not be worse than the conditions applicable to regular employees working in a comparable position; methods of early termination of the temporary assignment of an agency employee and issues of settlement between the agency and the user associated therewith; and many others.
It should also be mentioned that the Ministry of Labor and Social Affairs is planning to impose more stringent rules on agency employment; for example, to introduce a 15 percent limit for the share of agency employees in an enterprise, or a ban of serial employment contracts for a definite period of time applicable to agency employees, or a change in evidencing the financial eligibility of employment agencies, including the introduction of a duty to pay a security deposit.