Important and/or distinctive aspects of rights on termination in the Czech Republic.
Protecting confidential information
During the term of their employment, employees are required to keep all information that could be considered a ‘trade secret’ of their employer confidential. However, under Czech labour law, employees do not have an obligation to keep all information that they have been exposed to during their employment confidential. In practice, this is often circumvented by the Employee signing a separate civil law non-disclosure agreement.
Keeping employees from staying in the same business
Even though the concept of garden leave does not exist in Czech law as such, an employer may still decide not to provide an employee with work and provide him / her with compensation of his salary instead during their termination period. By suspending the employee in this way, the employer may deter the employee from handing in a notice of termination and at the same time, especially in industries which are subject to very time sensitive information (e.g. stock brokers), prevent a situation in which this information could be made available to competitors.
Post-termination restrictions are limited under Czech labour law to non-competition clauses. Under these clauses, the employee agrees that he / she will refrain from carrying out profit-making activities that would be identical and / or compete with the employer’s primary activities. The duration of these non-competition clauses may not exceed one year. Other post-termination restrictions are not permissible under Czech law.
Preventing employees from going to competitors
Apart from the option mentioned above (non-competition clause), there are no other mechanisms under Czech law which would prevent employees from joining a competitor. Some employers (usually in the same industry) enter into non-solicitation agreements with each other which prevent them from soliciting their competitors’ employees.
Recent case law
In a ruling of the Supreme Court of the Czech Republic last year, it was held that a relationship between two colleagues does not give an employer a right to instantly terminate their employment contracts on the basis of breaking the principle of loyalty and good manners towards the employer. The Supreme Court also stated that the mere existence of a relationship between two employees of the same employer does not necessarily mean that those employees are breaking their duties and obligations arising from the employment. If the employer wants to terminate the employment contract of these individuals, other measures must be observed and clearly manifested, for example, a significant decrease in the employee’s working efficiency or evidence of the employees spending working hours on non-work related activities.