Association for Foreign Investment

2003/08/21, Sedonns v.o.s. – law office with headquarters in Prague and London Founding member of AFI

Employers in the Czech Republic, and especially those from countries where labor law is not affected by the protectionist system used in the CR, grapple with the protectionist provisions of Act No. 65/1965 Coll., the Labor Code, in the case of employment termination. The Labor Code very much restricts employers with regard to termination notice, unless it involves an employee who breaches his/her obligations. In most cases then it possible to use the provisions on organization changes, i.e. on employee redundancy.

Under the Labor Code, an employer can give an employee termination notice only for reasons expressly stipulated by law. The reason for giving notice may not be subsequently changed. Notice must be given in writing and delivered to the second party (this means preferable to the employee in person) and the reason must be factually specified, otherwise it is not valid.

There are several conditions for giving termination notice due to redundancy. The first condition is the decision of the employer or relevant authority on a change of tasks, technical equipment, on a reduction in staff in order to increase work efficiency or other organizational changes. The second necessary condition is a "causal relation" between such decision and employee redundancy. According to previous experience this reason may include for example the situation where for organizational reasons part of the employees' job description will be eliminated because the activity performed by them has been reduced and now takes them only three hours a day, or one or more activities agreed in the work contract were eliminated. Other conditions of notice by the employer in such a case are the following:

• the employer is unable to continue to employee him at the agreed place of work performance, or at their residence, not even after prior training,
• the employee is not willing to transfer to another suitable job which the employer offered him at the place agreed for work performance or at their residence, or is not willing to undergo training for this other work.

That means that, if the employer cannot offer an employee work corresponding to his qualifications, he must demonstrate that the employee was not willing to transfer to other suitable work, or that the employer was not willing to undergo the necessary training for such work. This sequence of offering other suitable work must be adhered to prior to giving notice. In the opinions of courts there then arises the situation where the employer is obliged to offer the employee any job within the employers' company that is available at the time, even if such a position requires prior training.

The notice period for the above-mentioned reason is 3 months and begins as of the first day of the calendar month following the date notice is delivered, and ends upon the expiration of the last day of the respective third calendar month. For completeness however one must also even consider cases where the employee is protected under the Labor Code in the case of such reason of notice, and where there is either an absolute impediment to giving valid notice or events that may influence the length or course of the notice period.

Employees may not be given notice during the "protection period", i.e. particularly in the period,

• where the employee is recognized as being temporarily incapable of working due to an illness or injury, unless this inability was caused intentionally,
• or where a female employee is pregnant or takes maternity leave or a male of female employee takes care of at least one child younger than age three on a long-term basis

If an employee was given notice before the beginning of the protection period, the protection period is not included in the notice period, and employment terminates only with the expiration of the remainder of the notice period after the protection period has expired. This does not hold in the case where an employee announces that she does not wish to extend her employment. In other words, if a female employee gets pregnant, for example at the end of the first month of the notice period, she will continue to be employed throughout her entire pregnancy to the start of maternity leave and during the maternity leave, and the protection period runs even during the period of long-term care for the child up to 3 years of age. Only after this period ends does the remaining part of the notice period start to run again.

However, this ban on giving notice does not apply if the company or part thereof is dissolved or if the company or part thereof relocates; or if notice is given for reasons for which employment can be terminated immediately (except for a female employee on maternity leave, etc.); or notice for other breach of work discipline (if not involving a pregnant employee or employee caring for a child up to 3 years of age on a long-term basis).

Due to the fact as mentioned before that the reason for notice may not be changed after it is given, you may not use different reasons of notice for an employee already in the notice period, such as systematic breach of work discipline after two written warnings. In such a situation you would have to revoke the existing notice with the consent of the employee and give new notice, but then this would start a new notice period. Such a solution can be troublesome if the employee does not fulfill his obligations properly and who is already in the notice period. In this situation, one could only consider immediate termination of the employment relation if the employee breached discipline in an unusually gross manner.

Jan Grozdanovič,
Attorney
jang@seddons.cz
www.seddons.cz