COVID-19 and Employment contracts in Czech Republic

How to deal with a reduction of business during COVID-19 pandemic? How can I save on wage expenses? Is there any help from the state?

The employers can consider one of the following options:

a) To analyse the legality of the employment “contract”

Not all people “working” for employers have an employment contract for an indefinite period of time. Some of them might be business entrepreneurs (freelancers), some might have employment contracts for specific period of time, some might be in a trial period, and some might have agreements for works performed outside of an employment relationship. With all these aforementioned groups, it is easier to terminate the relationship.

b) Support employees to use the opportunity to stay at home with children

The state has closed schools since 11th March 2020, and shall pay employees who stay at home with their children (nursing) until the end of June. In light of this, it highly recommended for employers to support their employees in utilizing this opportunity and stay at home with their children. In such a case, employees are paid by the state and not by the employer.

c) Direct employees to take their remaining days of paid leave

The employer is the one who decides when employees take their paid leave. Nevertheless, it has some conditions- the leave must be assigned 14 days in advance, and the employer must take into account the employer’s operational conditions and individual employees’ justified interests. It is obviously possible to assign part of the paid leave, but it might be disputable to assign the entire paid leave in this way.

d) Change the work schedule

The employer can implement changes in work schedule to put lesser number of shifts during critical months (May, June), and on the other hand impose more shifts during later months like August etc.

e) Use temporary layoffs and apply for the state contribution

If the employer does not have any work for the employees, or has only limited work, they can ask employee to stay at home and pay them between 60 % to 100 % of the wage compensation based on the reason. In such cases it is possible to apply for state contribution from the Antivirus program; according to which the state pays 80% of wage expenses to employers who were forced to temporarily close down due to the state measures, and 60% of the wage expenses to employers who had partial unemployment due to the economic reasons, typically lessening of the demand.

What if I had just hired someone? Can I take my employment offer back?

If only an offer was made, but employment contract was not signed, the employment contract is not valid and the employer can take it back. The employer can be found responsible to pay remedies to the employee in such a case, but the provisions about the pre-contractual responsibility under Czech law very new and we consider it very likely that the remedy in such cases will be low.

On the other hand, if an employment contract was signed, then the employer is bound to it. Nevertheless, most employment contracts contain a clause for a 3 month trial period, during which the employment contract may be terminated by any contractual party without reason. The employer can use this option to terminate the employment contract in trial period without stating a reason.

How to deal with employees that cannot go to work/ work from home because they have to take care of their children? Are they allowed to stay at home? Is the employer obliged to continue payment of wages?

During the period from 11th March until the end of June, employees that are required to take care of their children are allowed to stay at home and care for their children. In such cases, employees are paid from the social security system and not by the employer (nursing). But during this time, the employees are not supposed to work from home for the employer.

If the employer needs the employee to work from home during this period, they can agree with the employee on working from home (home office). In such a situation the wage is paid by the employer.

Unfortunately, the combination of state contribution and home office is not possible. The employee can be either in the first or in the second regime. If the employer needs only a small part of the work to be performed by the employee, they can leave the employee in the social security system (nursing) and, either rely on the goodwill of the employee or try to motivate the employee somehow financially, e.g. bonuses. This approach may be controversial from the Labour Law perspective, but it is widely used in the practice.

What should I do if there is still some business to do? How can I anticipate the end of the lockdown?

During the lockdown, and most likely also afterwards, working from home will be prioritized.

Companies have been strongly encouraged to implement work from home as much as possible.

When work from home is not possible, the employer has a duty to organize the workplace in a way to minimize the risk of employees from getting sick at work.

This means that the organization of production and work shall be adapted to these new requirements. We can give you following tips- organization of the office/production line respecting social distancing, provision of soap and/or hydro-alcoholic solution to employees, regularly disinfecting the workplace, avoid crowded offices through various means (modification of the working hours, part employees to work from home etc.), splitting the workforce into two groups, so that if there is an employee infected with COVID-19 and their coworkers are quarantined, only one group (half of the team) will be in quarantine, implement the use of veils, reduce the personal meetings and prefer the online communication, set rules for personal meetings, reduce business trips, set conditions for third parties to visit the workplace (in case it is needed), random temperature measurements of the people coming into the workplace, provide protective equipment (respirators, gloves) to the employees in high risk jobs etc.

These new means and organizational rules should be registered. Where there are staff representatives, they shall be required to follow these rules, as well as the occupational doctor in charge of the company.

Do I have the right to terminate contracts in this period?

Yes, it is the same as in any other time. But we have to point out that the Czech law allows to terminate the employment contract only from the reasons given by the Labour Code.