The Parliament recently approved an amendment to the Czech Labour Code (the “Amendment”) which provides greater flexibility for fixed term employees.
The current law
Czech law prevents an employer from entering into an employment agreement with an employee for a term of longer than three years. Employers are also prohibited from renewing employment agreements with employees on more than two consecutive occasions. Should the employer wish to extend the employee’s employment beyond these time limits, an indefinite term agreement must be entered into.
The Amendment does not abolish the current law but instead allows employers to deviate from the law should the employer have justified reasons to do so. As an example, the employer can renew an employee’s agreement on more than two consecutive occasions where the employer requires employees for the summer season only.
Should the employer apply its own rules and deviate from Czech law, the alternative rules should be included in the employer’s internal policy. This policy must explicitly state:
- the reasons for the employer’s deviation from the law;
- the differences between the current law and the alternative rules of the employer;
- the employees affected by the rules; and
- the period during which the rules are valid.
If the employees are represented by trade unions, the employer’s alternative rules must be included in the agreements with the trade unions.
Employers likely to benefit from the increased flexibility for fixed term employees are those in the agriculture and construction businesses where there is a high demand for seasonal workers. Nevertheless, the Amendment is envisaged to have a broader scope and promote greater flexibility in all industries.
The Amendment is likely to become effective on 1 August 2013. It would therefore be prudent for employers to begin considering the Amendment’s effect on their workforce and, if necessary, begin implementing appropriate measures into their internal policies.