- Phase
- Employment Act (Law No. 435/2004 Coll.), Labour Code (Law No. 262/2006 Coll.)
- Native name
- Zákon o zaměstnanosti, zákon č. 435/2004 Sb., Zákoník práce, zákon č. 262/2006 Sb.
- Type
- Working time flexibility
- Added to database
- 08 May 2015
Article
115, 120 a) too 120 f) of the Employment Act, 209 of the Labour Code (paragraph 1)
Description
The amendment to the Act no. 435/2004 Coll., on Employment, in force since 1 October 2015, aims at helping employers to retain existing employees in the event of adverse economic developments.
This includes situations in which the employer is unable to provide an employee with work within the scope of weekly working hours either due to a temporary drop in sales of the employer's products or drop in demand for services rendered by the employer ('partial unemployment', also referred to as 'short-time working' or 'temporary layoffs'; in Czech 'částečná nezaměstnanost') , or due to adverse weather conditions or natural disasters.
The Employment Act establishes that if the company is unable to provide work for employees for more than 20% of the weekly working time, it should give employees a wage compensation amounting to at least 70% of their original monthly wage according to the employment contract. The employer is entitled to ask for so the called 'Contribution at time of partial unemployment' (in Czech: 'Příspěvek v době částečné nezaměstnanosti'). The above-mentioned wage compensation is also determined by agreement with the trade union or, in case a trade union does not operate, the agreement may be replaced by internal regulation. Compensation can be provided for a maximum period of six months with the possibility of extension for the same duration.
The employer and the labour office agree on the amount of the contribution, which has to be later approved by the government. The amount of the contribution according to the act is 20% of the average salary per employee, but not more than 0.125 times the average wage in the national economy in the first to third quarters of the calendar year which was preceding the year of contract conclusion.
In conclusion, this means that an employer should pay his employees at least 70% of their average monthly earning, of which 50% is paid by employer himself and 20% by the labour office. An employee cannot be dismissed while receiving the allowance.
The above-described section 115, the Act no. 435/2004 Coll., on Employment, according to which the so-called allowance was provided during the period of partial unemployment, was canceled from 1.7.2021 and replaced by sections 120 a) to 120 f), according to which the allowance was provided during the period of partial work, the so-called Kurzarbeit. The condition is that the employees of the employer applying for the allowance must work at least 20% of their working hours in total. The amount of the contribution is 80% of the paid wage compensation, including mandatory contributions. The maximum amount of the allowance is newly capped at 1.5 times the average wage in the national economy for the first to third quarter of the calendar year preceding the calendar year. The contribution is provided to the employer by the Labor Office on the basis of an application. The provision of the contribution is determined by the government after a tripartite discussion in the event that the economy of the Czech Republic or its sector is seriously threatened for economic reasons, or due to the occurrence of a natural event or epidemic, cyber attack or other extraordinary situation that is an intervention of force majeure.
Response to COVID-19
In the framework of the 'Antivirus employment retention programme' (Antivirus - podpora zaměstnanosti) the government compensates employers' wage costs from 12 March to 31 August 2020:
- In case of ordered quaratine, the employee receives a wage compensation amounting to 60% of the average earnings (the first 14 days paid by the employer) from the employer. Average earnings are determined from the gross salary (or salary) settled for payment by the employee in the relevant period and from the time worked in the relevant period. The relevant period is the calendar quarter preceding the calendar quarter in which the average earnings are determined to satisfy the employee's claims. The employer receives a state compensation of 80% of the paid wage compensation and the social insurance contributions (up to CZK 39,000 (€ 1,415) per month and employee).
- In case of business closure ordered by the government, the employee receives a wage compensation of 100% of the average earnings from the employer. The employer receives a state compensation of 80% of the paid wage compensation and the social insurance contributions (up to CZK 39,000 (€ 1,415) per month and employee).
- In case of obstacles to work on the part of the employer due to economic difficulties caused by the COVID-19 crisis, the employee receives a wage compensation of 60-100% of the average earnings from the employer. The employer receives a state compensation of 60% of the paid wage compensation and the social insurance contributions (up to CZK 29,000 (€ 1,052) per month and employee).
Citation
Eurofound (2015), Czechia: Working time flexibility, Restructuring legislation database, Dublin,
https://apps.eurofound.europa.eu/legislationdb/working-time-flexibility/czechia