Employment Act – significant changes proposed

A Bill proposing significant changes to the Employment Act is intended to come into effect in Czech employment law from January 2012.  Although Senate has not approved the Bill, it is expected that it will still be approved by the Chamber.

So what are the proposed changes?

Illegal work

  • A modified definition is proposed which should make it easier to identify, and punish, illegal working.
  • It is proposed to increase the maximum fine for performing illegal work  to CZK 100,000 (EUR 4,090) for individual employees.

“Švarcsystém”

The Bill proposes:

  • regulation of the “employment” of tradesmen as workers (as opposed to as employees employed under an employment contract) to seek to prevent employers avoiding their statutory duties as employers (eg payments for social and health insurance);
  • a new offence which will apply when an employer engages a person as a “worker” rather than as an employee. Although this is currently prohibited, there is no clear sanction; and
  • the penalty of a fine of up to CZK 10,000,000 (EUR 402,010) with a minimum fine of CZK 250,000 (EUR 10,05).

Share recruitment

It is proposed that:

  • employment agencies should be entitled to cooperate with the Labour Office when arranging or negotiating employment contracts;
  • an agency should be financially rewarded for each successfully placed candidate; and
  • special bonuses should be paid to agencies when a job candidate signs up to a permanent employment contract or to a fixed term contract of at least 6 months’ duration.

Removal from the Register of Job Seekers

It is proposed that a candidate will be removed from the register of job seekers where he or she has refused, for 2 months or more, to perform community service/works without proper reason.

Protected workplaces

  • It is proposed to merge the two institutions “protected workshops”  and “protected workplaces” with the aim of reducing the administrative burden.
  • Where a workplace is adapted by the employer for a disabled person with the agreement of the Labour Office, the employer will receive a financial contribution of up to CZK 48,000. It is proposed that this will be paid once the adaptations have been in place for 12 months.

Employment of disabled persons

It is proposed that:

  • funding to support employment of disabled people will only be available in respect of employees working in “protected” jobs which have been established by agreement with the Labour Office;
  • the maximum funding available will be reduced. However, if an employer incurs additional costs, higher funding may be available; and
  • there will be a limit on the extent to which employers can comply with their statutory obligations by buying products from employers who do employ disabled persons.

Retraining for job seekers

It is proposed that:

  • job seekers should be able to choose the profession in which they will be retrained; and
  • only accredited courses can be subscribed to.

Employer’s obligation to notify the Labour Office of new vacancies

  • Notification to the Labour Office of any new vacancies will be voluntary rather than obligatory; and
  • for job seekers who enjoy increased care from the Labour Office, notification will also be voluntary.

Certificate of indebtedness

The proposed change is that the Labour Office will be able to obtain a certificate of indebtedness, provided that the applicant gives  consent, thereby reducing the administrative burden on the applicant.