A breach of labor obligations by an employee has been discovered in your company, the investigation and assessment have taken several weeks, and since immediate dismissal is risky, you have decided to proceed with dismissal for a serious breach of labor obligations. If this decision is made at the beginning of the month and no one is ready to agree on mutual termination, you won’t get rid of the employee any sooner than a timeframe of almost three months. Furthermore, if there are delays in the delivery of mail by the post office or the employee falls ill, it will take even longer.
An amendment to the Czech Labor Code recently adopted by the Parliament, known as the “Flexi Amendment,” is expected to allow for faster dismissals.
Currently, the length and course of the notice period do not depend on the reason for termination or the party terminating the employment. It is at least two months. It begins on the first day of the month following the delivery of the notice and ends on the last day of the second calendar month. This means that if the notice is delivered on April 15, the notice period runs from May 1 to June 30. Especially in cases where the relationship between the employer and the employee has been severely damaged and trust has been shaken, keeping the employee for such a long period is problematic for the employer and often has to be resolved by putting the employee on “garden leave” while still paying them without any work being done in return.
The notice period can only be extended, never shortened, by contract by both parties in the same way, and, except in rare cases involving key personnel or managers, in practice, this option is not often used.
Once the Flexi Amendment becomes effective, the notice period will be shortened to only one month if the employment is terminated by the employer for (i) failure to fulfill conditions or requirements for proper performance of work, (ii) violation of obligations arising from labor regulations (in practice referred to as violation of work discipline), and (iii) violation of the medical regime of an employee on sick leave.
For other reasons of termination (organizational or health-related), the two-month notice period remains in force.
In all cases of notice of termination, the notice period shall commence already on the day the notice is delivered to the other party. It will end on the day that is the same number as the delivery day, i.e., if delivery is made on April 15, the end day will be May 15 (or June 15). If there is no such day in the corresponding month (e.g., February 30), the end day will be the last day of the calendar month (e.g., February 28).
The parties may agree to extend the notice period or change the way it runs, provided that it is the same for both the employer and the employee, except for the reasons for termination allowing a one-month notice.
There are situations where the employer may prefer that all employees be dismissed on the same day or on the same last calendar day because other steps may be linked to that day. In particular, in the case of collective redundancies or redundancies with a large number of employees, it is unlikely that all of the affected employees will be notified on the same day (due to holidays, teleworking, illness) and then the last day, if counted according to the new rules, would be different. Determining the effectiveness of the dissolution of the employement its part or certain positions would be logistically more demanding to plan.
The extension of the time limits for assessing and evaluating grounds for notices for work discipline reasons and prolongation of the probationary period are other measures proposed to assist employers in the dismissal procedure.
Only time and experience will tell whether these changes will make it easier for employers to manage dismissals and, as a result, get the Czech labor market moving. The prerequisite for this is the successful completion of the legislative process. If published in April, the new rules are expected to come into force on June 1.
A review of the contracts, internal rules, and other documents that may apply to the notice periods would be appropriate already in order to consider any changes to be implemented and to reset internal processes.
By Adela Krbcova, Partner, Peterka & Partners
This article was originally published in Issue 12.3 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.
