Labour Law

The current crisis situation has a negative impact on, among other things, the private business sector and the economy. Employers often face a decline in demand for goods and services which in turn causes lack of work for their employees.

We have prepared the overview of the basic areas that many employers may or will most likely face during the crisis. The following text consists of the following main topics:

  1. Employer and quarantine
  2. How to legally agree on home office?
  3. What to do when there is not enough work for your employee(s)?
  4. Termination of employment during crisis.


Employer and quarantine

It is important to mention that only public health protection authorities (especially regional hygiene stations, or the Ministry of Health of the Czech Republic) are the only bodies entitled to decide on the quarantine. The employer is then obliged to follow the rules laid down in the quarantine order, but it is not itself entitled to decide on the existence of the quarantine.

Employer main obligation is to excuse the employee's absence at work during the period of quarantine ordered by public health protection authorities and provide him with the compensation of his wage for the first 14 days of quarantine (after that the state takes on the responsibility to pay the compensation).

What options does the employer have if the quarantine is not ordered by the public authorities but a certain employee may be a potential risk for others, so the employer wishes to separate him from others? Below are at least 3 basic possible ways to address this issue.

Firstly, the employer may arrange home office. This is of course possible only if the nature of the employee's work so permits. In this case, the employee will continue to perform his work under the agreed conditions but will not stay in the workplace. This is probably the most appropriate method of prevention while maintaining employee performance (details about home office below).

Another option is to order an employee to use his days off (holidays). However this must be ordered by the employee at least 14 days in advance, unless otherwise agreed with the employee (such agreement may therefore shorten the period). During the days off, employees are entitled to wage compensation.

A third possible procedure is to inform the employee that he or she cannot be assigned work for a certain period of time. This means that the employee should not to go to work until further notice. In this case, however, this is an obstacle on the part of the employer, which means that the employer is obliged to pay the employee a full monthly wage (or an average wage if it’s not fixed).

Any employee may also apply for unpaid leave, but that is usually not very likely to happen.

Home office

In the current difficult situation, the home office provides a suitable way to keep businesses running at least to a certain extent while ensuring employee health protection. What are the legal conditions for an employee to be able to work from home?

First, the nature of work must be compatible with home office – doable from home. Also, the employer must have the technical possibilities to enable employees to work from home. This will mainly include the provision of tools needed for work (usually a computer with the necessary software and a telephone).

Home office requires the consent of the employee and cannot be unilaterally ordered by the employer.  Therefore, there must be a written agreement between employer and employee about home office.

We usually recommend that the basic rules of home office should be regulated by an internal regulation and the specifics with certain employee should be laid down in a written agreement on temporary work from home. It is necessary to pay attention especially to the area of ​​work safety, because the employer is still responsible for possible work injuries, even if they occur within the home office in the employee's home. The employer should therefore make sure that the employee's workplace at home is suitable and safe. Another area that employers should not underestimate in this regime is the protection of personal data.


What to do when there is not enough work for your employee(s)?

Many employers are considering what to do when they do not have enough work due to the crisis. What to do with an employee who, due to the decline of orders, has nothing to do? 100% wage compensation is expensive and termination of employment seems premature. For these circumstances, Labour code offers a solution called “partial unemployment”.

Partial unemployment is when employer cannot give work to a worker due to a temporary decline of the sales of his products or a reduction in the demand for his services. In these situations, the law allows the employers to overcome this temporary negative situation by giving them an option to send temporally redundant employees home and pay them only a part of their regular earnings.

If there is a trade union, the employer has to conclude an agreement with it, under which employees must be paid at least 60% of their average earnings during the period of partial unemployment.

If there is no union with the employer, the employer may replace the agreement by an internal regulation unilaterally issued by the employer. However, even in this internal regulation, the compensation must be at least 60% of employees´ average earnings. The internal regulation can be changed or cancelled by the employer at any time.


Termination of employment during crisis

Despite all efforts by employers to maintain the operation of business in the present economic situation, there may be situations where employers are forced to terminate employment with some of the employees. How should the employer proceed in such a case?

If the employer does not have enough work for some employees due to insufficient sales of products or services (if the situation cannot be solved with the measures described above), the next step is to adopt a decision on organizational changes. With this decision, the employer often reorganizes work and cancels unnecessary jobs.  Employees who have held the cancelled job thus become redundant.

Such employees may be lay off on the basis of an agreement or dismissal by the employer for the legal reason described below.

An agreement to terminate an employment contract is a bilateral act and requires the employee's consent to conclude it. The advantage of the agreement is that in such a case there is no notice period and the employer and the employee can agree on the date of termination of employment, as well as on any other related matter.

The dismissal, on the other hand, is only one-sided and the employee's consent is not required for its validity. If an employee becomes redundant as a result of a specified organizational change, notice of dismissal is in accordance with section 52 (c) of the labour code. The reason for the notice must be sufficiently specified in the dismissal notice. At the same time, it is necessary that the employee is informed about the organizational change at the latest on the day of delivery of the notice. Consequently, it is necessary to respect the notice period, which is legally two months.

Of course, it is not excluded that, even in times of recession, the employment relationship with the employee may be terminated by notice for other legal reasons. If an employment contract is terminated for organizational reasons, whether by agreement or termination, the employee is entitled to severance pay which is calculated with regard to the duration of the employment (one to three times the employee´s average wage).

But what if the employer has such economic difficulties that he needs to terminate employment with more employees at the same time? This area is regulated by the so-called collective termination, where, in addition to meeting the above-mentioned basic conditions, certain legal specificities must be met.

Collective termination means termination of employment contracts within a period of 30 calendar days based on notice given by the employer for organizational reasons (cancellation of the employer or its parts, relocation of the employer or its part, redundancy) to at least 10 employees with employers employing 20-100 employees; 10 % of employees with employers with 101-300 employees and 30 employees with employers employing more than 300 employees.

Given the severe impact of collective termination on the labour market, there are specific legal rules. In the case of collective terminations, the employer is obliged to discuss this important measure with the trade unions and the regional branch of the Labor Office. In addition, this discussion must take place before the employees are dismissed, and the law stipulates what the employer must inform the concerned employees and authorities. This rule is laid down in order to discuss, in cooperation with trade unions or employees, the possibilities of preventing or substantially reducing any collective terminations.

If, after discussion, the employer finds that collective terminations are necessary, it is obliged to inform the regional branch of the Labor Office in a written report of his decision and the outcome of the discussion. This report, too, has the statutory requirements.

The termination procedure, whether through an agreement, dismissal or subsequently in the form of collective terminations, is a complicated issue given the rather strict statutory rules. Incorrect wording of the organizational change or dismissal notice may result in the invalidity of such documents and the subsequent wage compensation. If you need to lay off employees, we recommend that you consult our labour law specialists.

If you have any additional questions or requests for assessment of your situation or processing of relevant documents, do not hesitate to contact attorneys and associates of KODAP legal, who are ready to assist you:

Kodap skupina - daňové poradenství

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+420 485 228 471

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