The amendments to the Labour Code, which we have presented in a two-part brief overview of all the amended areas (such as the regulation of teleworking, mandatory information for employees, new rights for caring employees and more), which can be found at the links here a here), brings many significant changes affecting the functioning of employment relations.
We have therefore prepared a multi-part series of articles focusing in detail on the individual changes, with the first two parts focusing on the area of electronic contracting (Part 1 can be found in here) and the expanded and modified employer information obligations (Part 2 can be found here).
In this, third article, we will focus our attention on probably the most controversial area affected by the amendment, namely the changes to the rules for concluding and executing agreements on work performed outside of employment. We will start by recalling the existing legislation, and then we will focus in detail on the new obligations and rules for employers and employees working on agreements on work performed outside of employment, the impact on practice, but also provide advice and recommendations on what to prepare for as an employer.
Modification of agreements before the amendment
At the outset, it is worth briefly recalling the legal regulation before the amendment came into force, when until 30 September 2023, employers did not have to schedule working hours in advance, for example, or deal with the registration of agreements, and employees were not entitled to holidays or additional payments for weekend or night work, etc. In general, agreements were thus more flexible and, especially for this reason, widely used in practice.
What has the amendment brought in the area of agreements?
The changes in the area of negotiation of agreements relate in particular to Sections 74 to 77b (and related provisions) of the Labour Code. More or less all the changes are aimed at one thing, namely tying up the rules. Although the legislator’s intention was to at least partially equalize employment relationships arising from one of the agreements with the employment relationship and to generally increase the predictability and protection of employees, this was done at the cost of a significant reduction in the existing flexibility.
The amendment introduces new requirements for employees working on agreements, as well as many new obligations for employers, which in aggregate make the use of agreements significantly disadvantageous for both parties (you can read about the impact on practice and recommendations on how to respond to the restrictions introduced by the amendment at the end of this article).
Obligations of employers
In order to increase the protection of agreement workers, new obligations have been created for employers, both in terms of administrative processes and in relation to the conclusion and form of agreements. Specifically, these include:
a) written scheduling of working time, including familiarisation of employees with the schedule
Employers must schedule the working time of the employee in writing in advance and provide the employee with a written schedule no later than 3 days before the start of the shift or the scheduled period (if a different familiarisation period is agreed with the employee, then within this agreed period). The working hours need not be scheduled for the whole duration of the agreement, but only for part of the scheduled period, e.g. only a week or a month.
If the employer is unable to assign work to the employee within the scheduled working hours, this is now an obstacle to work on the part of the employer and the employee will be entitled to wage compensation under Section 207 et seq. of the Labour Code.
b) records of working time
In relation to the working time schedule, the amendment introduces a related obligation for employers to keep records of the working time of contract workers, indicating the beginning and end of the shift worked.
c) information obligation for employers
In line with the aforementioned objective of the amendment to place agreements on an equal footing with employment relationships in many aspects of employment relations, the information obligation of employers set out in Section 77a of the Labour Code has also been extended. Thus, the information required to be provided by the employer in relation to agreement workers is almost identical in scope to that required in the case of a regular employment relationship (unless it is part of a particular agreement). Employers must provide this information to the employee in writing and, unlike in the case of a regular employment relationship, they must also inform the employee of (i) the expected amount of working time per day or week, (ii) the method of distribution of working time (i.e., equal or unequal) and (iii) the length of the compensation period (only in the case of a work performance agreement).
The employer has a special information obligation towards the posted agreement workers, as set out in Section 77b of the Labour Code, to the same extent as in the case of a regular employment relationship.
Entitlements of agreement workers
Compared to the increased administrative burden placed on employers, the amendment brings much more favourable changes in relation to agreement workers, as it introduces a number of new benefits and rights for them, improving their existing conditions, especially their bargaining position.
a) Institutes newly applicable to agreement workers
The amendment has expanded the list of provisions on the employment relationship that now also apply to agreements, in particular the possibility of negotiating a probationary period (which applies under the current legal conditions), statutory rest periods and breaks at work or minimum regime supplements. These will be compulsorily provided by the employer for work (i) at weekends, (ii) at night or on public holidays and (iii) in difficult work environment.
Agreement workers can also now claim the right to protection against obstacles to work on the side of employer and the resulting right to compensation for the agreement, as well as time off work. In contrast, personal obstacles of the employee or obstacles for reasons of general interest will only give rise to a right to compensation for agreed remuneration if it has been agreed or if it is expressly provided for in an internal regulation.
b) Switching to another form of employment
An important novelty is the possibility for an employee to apply for a transition to another, more secure form of employment – an employment relationship. This can only be done if the employment relationship based on a temporary or permanent agreement on work performed outside the employment relationship has lasted for at least 180 days in the previous 12 months with the same employer.
The change to an employment relationship does not occur automatically, nor is the employer obliged to offer the employee such a change. Therefore, the employee will always have to request the transfer in writing if the employee wishes to do so.
The employer is also not obliged to comply with such a request, but if it does not comply, it must always provide the employee with a reasoned written reply within one month of receipt of the request. Please note that the justification for not complying with the request should not be discriminatory or otherwise unlawful – for example, if the employer were to state that it did not want to employ anyone in the employment relationship, this would be in breach of section 74(1) of the Labour Code.
In this respect, employers are advised to establish appropriate rules within their internal procedures and regulations, in particular for the purpose of making applications and how they are processed.
c) The right to request written reasons for a termination notice
Where the employment relationship has been terminated by notice from the employer and the employee reasonably believes that the termination was (i) because of his exercise of the right to information, professional development, or advance work scheduling, (ii) because of a request made for a switch to employment relationship, or (iii) because of a request made for a modification of working conditions pursuant to Section 241 or Section 241a of the Labour Code or for the taking of maternity, paternity or parental leave, the employee may, within one month of receipt of the notice of termination, request in writing the reasons for the termination. In such a case, the employer is obliged to comply with such a request without undue delay and to provide the employee with the reasons.
Vacation
One of the most controversial changes brought about by the amendment, despite considerable criticism not only from the professional public, is the right of agreement workers to vacation. However, the provisions on leave came into force later than the other provisions of the Labour Code, on 1. 1. 2024.
Leave for agreement workers operates under a slightly different regime than leave for salaried employees. To be entitled to holiday, two conditions must be met simultaneously: (i) the employment relationship must last for a continuous period of at least 4 weeks (28 days) and (ii) the employee must work at least 4 times the notional working time[1] (i.e. 80 hours).
How to do it in practice?
In the first place, we recommend a review and modification of the employment documentation, i.e. revision of the existing relevant documentation – the agreements and to create a separate information document to fulfil the information obligation. In addition, it is advisable to request information from the employee about other agreements on work performed outside the employment relationship concluded with other employers.
In order to increase legal certainty on both sides and to avoid inconsistencies in content, we also recommend the creation of uniform template documents within the company (i) for the purpose of claiming entitlements (e.g. request for a switch to a more secure form of employment, request for justification of employer’s termination notice) and (ii) to facilitate the work of the HR department (e.g. working time scheduling, scheme allowances or leave planning).
In view of the new obligation to schedule working time, it is advisable to take extra care in determining the adequate time within which the employer will actually be able to make the employee aware of the schedule. At the same time, it should be borne in mind that if a shift is unexpectedly cancelled or work is not allocated within the agreed and scheduled working time, the employee will be entitled to full payment for the time not worked.
Conclusion
The amendment has made significant changes to the agreements on work performed outside the employment relationship – whether it concerns the obligations of employers to schedule working time, keep records of working time or information obligations on the one hand, or a significant expansion of employees’ rights on the other hand.
These changes have to some extent erased the distinction between employment and employment relationships arising from agreements on work performed outside the employment relationship. These nuances, which are now virtually non-existent, were the main motivation for the widespread use of agreements as a flexible alternative to the employment relationship.
Employers must therefore now react adequately to these changes in order to comply with the new legal requirements, which may, and in many cases probably will, lead to a transition to a different structure of employment relationships between employees previously working on agreements on work performed outside the employment relationship.
Should you have any questions about the amendment to the Labour Code or need assistance with updating your existing employment documentation, please do not hesitate to contact us at any time.
[1] Notional working hours, i.e. regardless of the actual number of hours of work agreed and performed, are set by law at 20 hours per week.
Mgr. Jakub Málek, managing partner – malek@plegal.cz
Mgr. Kateřina Lansdorfová, junior lawyer – lansdorfova@plegal.cz
Mgr. Radim Šulc, junior lawyer – sulc@plegal.cz
Rachel Kouklíková, legal assistant – kouklikova@plegal.cz
11. 1. 2024