Amendments to the Labour Code following the recodification of Czech private law

The largest reform to Czech private law in the last 20 years in the shape of the new Civil Code is scheduled to come into force on 1 January 2014. Additional legislative changes including amendments to the Labour Code are also expected to come into force on 1 January 2014.

The new Civil Code will apply to those employment relationships, which are currently not covered by the Labour Code, and provides new rules regarding the conclusion of contracts. Current laws prescribe a strict procedure for the conclusion of a contract from which the parties cannot depart. The new Civil Code instead allows parties to agree on their own procedure when concluding an agreement, which provides greater flexibility for employers and employees to agree terms of employment. The amendment of the Labour Code will also affect the regulation of wage deduction agreements with new rules for the maximum amount to be deducted (now, at least 50% of the salary will be protected from any deduction).

Further, the amended Labour Code will allow individuals appointed as the legal representative of employees who are under 16 years old (e.g. parents) to terminate the employment of such an underage employee. Currently, a person who is under 16 years old may enter into an employment contact by himself provided he or she has completed compulsory full-time education. Under the amended Labour Code, parents of an employee who is under 16 years, will be able to intervene and terminate the employment contract in the interests of protecting the underage person.

Increased minimum wage effective from 1 August 2013

The minimum monthly wage in the Czech Republic increased to CZK 8,500 (about €330) from 1 August 2013. The minimum wage had been CZK 8,000 (about €310) since the previous increase in January 2007. The right-wing coalition parties whose government collapsed in June have resolutely opposed the increase. The unions have welcomed it, saying that it will improve the spending power of employees in the Czech Republic who are paid the minimum wage (amounting to 3% of the national workforce).