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16 July 2021

“Kurzarbeit” approval

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Source: Weinhold Legal, Legal Alert in the field of labour law, 30 June 2021

Act No.248/2021 Coll., which amends Act No. 435/2004 Coll., on employment, as amended, and introduces a legal framework for “contribution during part-time work“, the socalled kurzabeit “Amendment“ was published on 30 June 2021.

The aim of the Amendment is to enable to maintain employment during serious economic difficulties. The Antivirus program which has been temporarily used for this reason will be terminated on 30 June 2021.

The Amendment enters into force on the 1st day of the month following the month in which the Amendment is published in the Collection of Laws. As the Amendment was published on 30 June 2021, it enters into force on 1 July 2021.

The contribution during part-time work according to Section 120b (1) of the Amendment will be proposed by the government via regulation after discussion in the Council of the Economic and Social Agreement in case of serious threat to the economy of Czech Republic or its branches are seriously endangered for economic reasons characterised by relevant economic indicators and its past and expected development due to the occurrence of a natural event consisting of a natural disaster, epidemic, cyber-attack or other emergency situation that arises due to force majeure.

Whilst drawing the contribution, the Amendment imposes on the employer the following obligations

  • to pay the employees compensation of at least 80 % of their average earnings in respect of an obstacle to work pursuant to Section 207-209 of the Labour Code arising in respect of the employer in direct connection with one of the reasons for which the government regulation was issued;
  • not to assign work to employees due to the obstacles specified in the government regulation and to the extent specified by the government regulation, being at least 20 % and at most 80 % of their weekly working time spread over the relevant calendar month due to the listed obstacles to work. This condition is assessed on an aggregate basis for all the employees of the relevant employer (or part thereof).

The employer will be provided with the contribution during the part-time work („Contribution“) only for that part of the employee´s weekly working hours during which the employer does not assign the employee work. The employer will receive a compensation for wage and levies in the amount of 80 % of the costs for a period of up to six months (the given period may be extended twice for up to three months). 1.5 times the national average wage in the first to third quarters of the previous calendar year will be the cap for the monthly contribution.

The contribution will not be provided:

  • if the employee has a working hours account;
  • for a calendar month when the employer did not submit a monthly overview within the set deadline;
  • for a period of 3 years from the date the decision on the imposition of a fine on the employer for allowing the employment of foreigners without a valid residence permit, in conflict with the work permit or without
    a work permit.
  • If the employer wishes to draw the Contribution, he will have to declare in writing that:
    he will not terminate the employment relationship with the employee for whom the contribution is

If the employer wishes to draw the Contribution, he will have to declare in writing that:

  • he will not terminate the employment relationship with the employee for whom the contribution is provided due to organizational reasons for the period for which the Contribution is provided as well as for a period corresponding to half the number of calendar months for which the contribution was provided rounded up to whole months;
  • he will allow the employees for which the contribution will be provided to participate in an active employment policy organized by the Labour Office (e.g., retraining);
  • he will not draw other funds from public sources for the same purpose during the period of the provision of Contribution;
  • he did not pay out an extraordinary profit share, nor otherwise distributed its own resources nor provided any extraordinary performance including early repayment of loans or borrowings in the calendar month preceding the entry into the force of the relevant government regulation on “kurzarbeit” and he will do so neither during the period of the provision of the Contribution nor within 12 months following the month in which the provision of Contribution was terminated.

The amendment will also stipulate the deadlines within which it will be necessary to apply for the drawing of the Contribution and to deliver prescribed overviews and documents.

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