On 1 October 2023, an amendment to the Labour Code came into force, which brought many significant changes to employment relations.
An overview of the amended areas of labour law can be found in our two-part series of articles here and here. As promised, we have now prepared a follow-up series of articles that will deal with the amended areas in more detail. In the following article, we will introduce you to the first area of change, namely the electronic conclusion of contracts and agreements.
Briefly on the situation before the amendment
According to the original wording of the Labour Code, the conclusion of an employment contract or agreement or its amendment or bilateral termination, was much more difficult, as such legal action fell under the regime of “strict delivery” pursuant to Section 335 et seq. of the Labour Code.
The biggest obstacle to electronic communication in practice has been the need for both parties to use a recognised electronic signature and the complex process of mutually confirmed delivery.
New electronic closing option
The new provision of Section 21 of the Labour Code explicitly introduces the possibility of concluding bilateral contracts and agreements, including their amendments or termination, by electronic means of communication (electronic communication network or service) such as e-mail or a suitable HR signing system, while removing unnecessary formal obstacles.
At the same time, these bilateral legal transactions are exempted from the regime of “strict delivery”, which enables the simplification of the procedure for concluding them.
Concept of electronic communications networks or services
By electronic communications network or service we mean primarily e-mail, but also other “less formal” methods of electronic communication – such as a digital HR signing system, etc.
It is then up to the employer to choose the appropriate method of electronic contracting, but it must always meet the requirements of Section 21 of the Labour Code, which we will summarise below.
The electronic address of the employee
Communication in the context of concluding contracts and agreements with the employee or job applicant must be made to their private e-mail address, which they have explicitly communicated to the employer for this purpose.
An employee’s electronic address that is not in the employer’s possession is an important point that is easy to overlook, especially if an amendment to an employment contract is being concluded with an employee who is already working for the employer.
The point is that the e-mail address must not be controlled by the employer so that the employee always has free and unrestricted access to the e-mail.
The law does not prescribe a mandatory documentary form for the communication of the employee’s e‑mail address, i.e. on paper, this communication may take place by any documentable procedure. In any event, we recommend that this is always done with a statement that the e-mail address may be used for electronic contracting and agreements.
The moment of conclusion of the contract
In the context of the electronic conclusion of contracts and agreements, it is necessary to exchange the expressions of the will of both parties – the employee and the employer, by signing the contract or agreement.
This process should result in a signed contract or agreement that the employer must deliver to the employee’s private e-mail address. By this delivery, the contract or agreement is concluded.
Employee’s contract withdrawal
The Act now gives the employee the possibility to withdraw in writing from the contract or agreement concluded electronically, provided that the following conditions are met: (i) no more than 7 days have passed since the contract or agreement was concluded, (ii) the employee has not commenced the performance of work in accordance with the concluded contract or agreement.
Withdrawal by the employee is not possible if the agreement constitutes termination of the relationship between the employee and the employer.
How to do it in practice?
If the employer decides to allow or use the way of concluding contracts and agreements concerning the establishment, change or termination of employment relationships electronically, it will be necessary to establish certain internal procedures and prepare relevant documentation.
In this context, we can particularly recommend the following approach to employers:
- to obtain the employee’s or job applicant’s private e-mail address for the purpose of concluding contracts and agreements electronically;
- to demonstrably agree with the employee or jobseeker (e.g. by e-mail) on the content of the contract or agreement;
- both parties must agree to the settled wording of the contract or agreement – we recommend using a solution that allows the recording of simple electronic signatures of the parties;
- to send the final copy of the contract or agreement to the e-mail address provided by the employee.
We also recommend backing up all communications that are related to the conclusion of the employment contract.
In terms of documentation and solutions to implement the above, these include:
- a suitable form for providing a private e-mail address with sufficient instructions (modification of an existing applicant questionnaire, career page or separate form, etc.);
- an internal procedure (guidelines or instructions) on how the HR department should proceed with contracting, including the establishment of the employer’s authority to impose;
- a selection of a suitable electronic communication system (e-mails, HR system, signing systems, etc. or a combination of these).
Conclusion
In summary, the new legislation on electronic contracting and agreements and their termination and amendments brings further steps towards a modern and flexible approach to employment relations that reflects current trends in the digital world of work.
However, it is important that employers are aware of the new rules and procedures and implement them in their company processes in time to be able to safely conclude employment contracts with new employees.
Should you have any questions about the electronic contracting and agreements, or about employment law in general, or need assistance with updating your existing employment law documentation, please do not hesitate to contact us at any time.
Mgr. Jakub Málek, managing partner – malek@plegal.cz
Mgr. Radim Šulc, junior lawyer – sulc@plegal.cz
Rachel Kouklíková, legal assistant – kouklikova@plegal.cz
11. 12. 2023