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15 December 2011

Havel, Holásek & Partners: AMENDMENT TO EMPLOYMENT ACT

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The amendment to the Czech Employment Act aims at removing the most burning issues of the labour market, focusing on illegal work, job brokerage, employment of the disabled, and retraining.

The major illegal-work related issue that has come under the spotlight of our lawmakers is the so called Svarc system (in Czech švarcsystém). Under the amendment, all dependent activities carried on outside of employment and covered by a business relationship are subject to sanctions. More on this topic can be found on page 6.

Some major changes to job brokerage will also be introduced, for instance the so called co-brokerage, where regional branches of the Employment Office will be allowed to find jobs for job seekers through selected job agencies based on a written agreement. Employment Offices will thus pay job agencies for each seeker for whom employment for an indefinite period of time is found and for the one who keeps their job for at least six months. Another novelty will be that agencies will no longer be allowed to assign foreigners (citizens from third countries) to perform the jobs. All foreigners will have to be hired as employees by the person for whom they actually perform work.

Further changes that have received considerable publicity concern the registers of job seekers. These will no longer list unemployed persons who, either themselves or by agreement with the employer, and without a serious reason, have terminated an employment arranged for them by the Employment Office. This sanction will apply equally if the employment has been terminated by the employer for a gross violation by the employee of his/her duties. The job seeker may then be listed again in the register if s/he applies for it no less than six months after the first day of the employment that was originally arranged for him/her. Listed jobseekers may be removed from the register if, after two months on the list, they refuse to perform public service (of a maximum of 20 hours a week).

The employment of disabled persons is also to be largely modified. The state contribution for employing disabled persons will only be at 75% of the wage or salary expenses incurred, and the maximum monthly contribution will be reduced from CZK 8,000 to 6,000, although employers may ask for an increase of the latter by up to CZK 4,000 a month if they prove that there are additional expenses associated with the relevant position. The number of disabled employees for anyone who employs more than 25 persons will remain at 4% of the employer’s total staff. This statutory quota, however, may no longer be covered by buying goods or services from sheltered workshops operated by a citizens association, a registered church or a charitable association. In addition, organisations where more than 50% of all employees are disabled persons, as well as self-employed disabled persons, may supply their products or services to other employers to cover their statutory quota only up to an equivalent of 36 times the average salary of one disabled employee over the last calendar year. This is to support actual sales of goods and services of organisations where more than 50% of all employees are disabled persons.

Soňa Audesová, Senior Associate
Helena Šindelová, Associate

Source: Havel, Holásek & Partners s.r.o.; Legal News, December 2011

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