LABOUR LEGISLATION IN THE CZECH REPUBLIC

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1 LABOUR LEGISLATION IN THE CZECH REPUBLIC Czech citizens working in the Czech Republic under whatever kind of labour contract are protected by the relevant provisions of the Czech Labour Code (Act No. 262/2006 Coll.). The Labour Code also covers labour relationships in the Czech Republic, where one of the parties is a foreign entity and the parties did not agree on the applicable law of some other country. Employees from other states of the European Economic Area (EEA) posted to work in the Czech Republic are also subjected to certain provisions of the Labour Code. WORK PERMIT AND/OR PERMIT TO STAY The free movement of labour rules apply to all EEA and Swiss nationals working in the Czech Republic. Employees from those states do not need a work permit provided they hold a passport or an identity card. Nationals of all other states (with certain exceptions) must obtain a work permit and a permit to stay before starting work. As from 1 January 2009, employees from certain third states may apply for a green card, which is issued for a specific vacancy in summary proceedings and comprises both permits. This applies to nationals of the following states: Australia, Monte Negro, Croatia, Japan, Canada, the Republic of Korea, New Zealand, Bosnia and Herzegovina, Macedonia, the United States of America, Serbia, and the Ukraine. WORK CONTRACTS Under the Labour Code, every employment relationship must be made on the basis of a written work contract. The non-existence of a written contract, however, does not make an oral contract invalid. The work contract must always stipulate the kind of work, the place of work, and commencement day. In addition, the employee must be informed in writing in greater detail about the terms and conditions of the employment specified by law, either in the actual work contract or within one month of commencement of employment. TERMS AND CONDITIONS OF EMPLOYMENT The maximum length of the working week is (with certain exceptions) 40 working hours. The employer may order at most 8 overtime hours a week, but not more than 150 hours a year. All additional overtime work needs the employee s consent. The total length of overtime work may not exceed 8 hours a week on an average, i.e. 416 hours a year. Every employee is entitled to at least four weeks of holiday for the calendar year. In addition, the Czech Republic has 12 state holidays recognised by the law. MATERNITY AND PARENTAL LEAVE Female employees are entitled to a 28-week (in the case of multiple births, 37-week) maternity leave. They may start the leave from the eighth week before the expected date of birth at the MORE INFORMATION AT: Ministry of Labour and Social Affairs of the Czech Republic (Section Contacts / Alien Police) Aliens Registration Office, Ministry of the Interior of the Czech Republic Labour Control Office for Personal Data Protection earliest. During the maternity leave, the female employee is entitled to pecuniary assistance in maternity paid out by the Social Security Administration. Upon request, the female or male employee must be granted a parental leave, which may last until the day on which the child reached his/her third birthday, at the latest. On her/his return from maternity/parental leave, the female/male employee is entitled to return to the position at the place of work according to her/his work contract, including all working and wage conditions agreed in the work contract. MINIMUM WAGE The minimum monthly wage is CZK (approximately EUR 321) and minimum hourly wage CZK (approximately EUR 1.9). In the entrepreneurial sphere, there are 8 categories of what is called guaranteed wages determined according to the kind of work. DISMISSALS The mandatory period of notice is 2 months. The parties may extend that period, but the same length must apply to both the employer and the employee. The period of notice begins to run on the first day of the calendar month following the month in which the notice was served to the other contracting party. ORGANISATIONAL CHANGES In case the enterprise or any of its parts is closed down or relocated, or the employee becomes redundant for other reasons, the employer may give the employee a notice provided the following conditions have been met: The employer decided to make organisational changes before the notice was served. The notice was discussed with the employees representatives (e.g. if there is a trade union organisation).

2 The notice was served to each employee separately. The period of notice is at least two months and the severance pay at least three times average monthly earnings. Stricter conditions apply in the case of mass dismissals, when, in addition, the employer is required to inform the labour office concerned and to meet other mandatory conditions. SEVERANCE PAY In the case of termination of employment for organisational reasons, the employee is entitled to severance pay equivalent to at least three times his/her average monthly earnings. In the case of the termination of employment for health reasons on the basis of a vocational disease or work injury, the employee is entitled to severance pay equivalent to at least twelve times his/her average monthly earnings. The severance pay may be increased on the basis of the collective contract, internal regulations, or an individual contract. SOCIAL SECURITY Under Czech legislation, social security premiums consist of the health insurance premium and the pension insurance premium plus a contribution to the state employment policy. The employee contributes 8% of his/her gross income and the employer pays 26% of the gross income of all his employees. On 1 January 2009, the employee s contribution was reduced to 6.5% of his/her gross income. OLD-AGE PENSIONS At a specific age laid down by law, the employee is entitled to a state pension as an old-age benefit. There are no old-age pension schemes run by companies or pension programmes organised by different branches of industry. Besides the compulsory old-age pension system run by the state, supplementary pension insurance is provided by private pension funds. This mode of supplementary insurance is voluntary and employees arrange it by themselves. NATAŠA RANDLOVÁ, Partner PRK Partners s.r.o. advokátní kancelář natasa.randlova@prkpartners.com The conversion of amounts to EUR was calculated using the average exchange rate for 2008: EUR 1= CZK 24.94

3 THIGH QUALITY EDUCATION OPPORTUNITIES The Czech Republic makes education available, as does every other developed country in the world, not only to its citizens but to foreigners as well. Being a member of the European Union, the Czech Republic enables EU citizens and their family members to access education and school services under the same conditions that apply to children, pupils, and students of the Czech citizenship on all educational levels, from pre-school education to university studies. Citizens of third countries, i.e. countries outside of the European Union, have access to elementary, secondary, higher technical, and university education under the same conditions as the citizens of the Czech Republic; this may not apply to other school services. The growing interest of foreigners in education on all educational levels is chiefly evidenced by the growing share of foreigners in the overall numbers of children, pupils, and students in these schools. MANDATORY EDUCATION Elementary education in the Czech Republic, which usually starts at 6 years of age, is a part of the compulsory education and is free, with the exception of schools established by private entities. Children of foreign citizens with legal residency in the Czech Republic have the right to elementary education under the same conditions as the citizens of the Czech Republic. The regional authority, in cooperation with the founder of an appropriate elementary school, will provide free preparatory teaching for the children of citizens of other EU member states who live in the Czech Republic for longer periods of time and fulfil the mandatory school attendance here, as stipulated by Education Act on Pre-primary, Basic, Secondary, and Tertiary Professional Education to help them integrate into elementary education. This mainly includes the teaching of the Czech language and, based on feasibility, support for the teaching of their mother tongue and the culture of their country of origin. Elementary schools are attended by children of foreigners, being from European Union countries. Two-thirds of the children of foreigners at elementary schools are from Vietnam, the Ukraine, and Slovakia. WIDE RANGE OF SECONDARY EDUCATION Following the end of the mandatory school attendance, pupils in the Czech Republic may choose from a wide range of programmes in the area of secondary education. These schools offer diverse educational programmes, including specialisations providing secondary education with certificates of apprenticeship, professional educational programmes concluded with maturita exams, and programmes of general grammar-school education and lyceums. Even though these are not mandatory school attendance programmes, education at these schools is free, with the exception of privately founded schools. All secondary schools prepare acceptance exams for applicants which can include acceptance tests or qualification tests. The acceptance criteria may differ in individual schools as they are in the competence of the school s director. Acceptance for study at a secondary school is dependant upon the satisfaction of the acceptance proceedings criteria. EU foreigners may study on this educational level under the same conditions as the citizens of the Czech Republic, as may citizens of third countries, provided their residency in the CR is legal. Besides schools included in the Photo: PhotoCombo

4 school register, foreign students may opt to attend one of the foreign schools operating in the Czech Republic. There are foreigners in secondary schools, of whom come from the EU. The most foreign students in secondary schools come from Vietnam, the Ukraine, and Slovakia, together forming two-thirds of all students with foreign citizenship in all of the Czech secondary schools. Besides regular secondary schools, there are also schools for artistically talented pupils the conservatoires. These schools realise programmes oriented mainly at music and dance. Acceptance proceedings in these schools include talent tests. 130 foreigners study at these schools, with over a half being from the EU and almost a half from Slovakia. TERTIARY EDUCATION The system of tertiary education in the Czech Republic consists of higher technical schools and universities. Students usually do not make the decision to study in the Czech Republic at the lower levels of education, as they follow their parents. There is, however, a different situation in tertiary education, as students usually come to the Czech Republic on purpose in order to study. The decisions of potential students concerning whether to study in their country, or attend a school abroad usually depend on the attractiveness and contents of study programmes, and on the conditions created for students by the individual countries. The Czech Republic offers a diverse range of study programmes on the tertiary level, some of which may be studied in foreign languages. Higher technical schools usually offer studies in the following fields: economy, healthcare, pedagogy, law, and tourist trade and hotel management. These are 3 to 3.5 years long programmes. As opposed to studies at universities, the education is much more practice-oriented and tuition is applicable, even though the schools are public. The tuition for schools founded by the regions is not very high, usually around CZK (approx. EUR ), depending on the field of study. The cost is considerably higher for private schools. Students receive the title specialist with a diploma (DiS.). Some higher technical schools cooperate with universities and, upon satisfying certain criteria, graduates may continue their studies at a university to receive a university degree. 300 foreign students attend higher technical schools, twothirds of them being from EU countries, especially from Slovakia. THREE-LEVEL SYSTEM AT UNIVERSITIES Foreigners mostly seek university education in the Czech Republic. It is advantageous for them to study Czech programmes at public universities because then they do not pay any tuition, just like Czech students. That is why the studies are especially attractive to Slovakian students; over of them study at Czech universities. There is also a large number of students from Russia and other countries of the former Soviet Union at Czech universities. Students from EU countries form over three-fourths of university students. If an applicant chooses a public university programme realised in a foreign language, or studies at a private university, they have to pay tuition (for example, a study programme at the University of Economics costs EUR per year). However, the same applies to Czech students. Tuition is also applicable in case a student studies a Czech language programme at a public university but exceeds the designated duration of the programme by more than one year, or if a graduate studies another programme of the same level. The network of Czech universities includes public university-type schools that mainly offer studies of natural sciences, humanities, medicine, pedagogy, and theology. Then there are public universities of a technical character that offer studies in the fields of economy, chemistry, art, and agriculture. Private universities mostly offer programmes from the following areas: healthcare, economy, pedagogy, and humanities. Most of the universities in the Czech Republic have accredited study programmes corresponding to the Bologna protocol, i.e. three-level programmes bachelor and continuing master and doctoral programmes which lead to scientific degrees. Medical, veterinary, and architecture schools are an exception, as students usually study long master specialisations. Private universities usually have accreditation for bachelor programmes. Besides submitting an application, students also have to satisfy the conditions of acceptance proceedings in order to be accepted for studies in bachelor and master programmes. One of the basic conditions (with the exception of art studies) is the conclusion of a secondary education programme with the maturita exam, or a corresponding programme abroad. Acceptance proceedings may include an acceptance exam or a test of general qualification for studies. Applicants to subsequent master programmes must first conclude the bachelor programme, or a similar programme at a foreign university, and satisfy the requirements of the acceptance proceedings. Similarly, applicants to studies in doctoral programmes must first graduate from a master programme, or a similar programme at a foreign university, and must satisfy the requirements of acceptance proceedings. Students who do not speak Czech need to find out whether universities offer programmes in an other language than Czech. An overwhelming majority of public universities and some private universities have accreditation for programmes in foreign languages. There are programmes for bachelor, master, and doctoral studies in These programmes are accredited in English (1 632 programmes), German (67 programmes), Russian (7 programmes), French (16 programmes), Polish (14 programmes), and one programme is accredited in Dutch. MICHAELA KLEŇHOVÁ Institute for Information on Education, klenhova@uiv.cz, The conversion of amounts to EUR was calculated using the average rate for 2008: EUR 1 = CZK Up-to-date information on the possibilities for receiving scholarships for foreigners studying at Czech universities can be found at the MEYS website:

5 ATRADE UNIONS IN THE CZECH REPUBLIC At present, about employees in the Czech Republic take advantage of the possibility to join trade union organisations to protect their economic and social rights. They form several trade union confederations, mainly the Czech-Moravian Confeder ation of Trade Unions (ČMKOS), the Association of Independent Trade Unions (ASO), and the Confederation of Art and Culture (KUK). Trade union membership gives employees the chance to defend their rights in employment relationships and in furthering their social interests, both in relation to employers and in society, in a much more effective manner than if they did not use the right to organise in trade unions, which is protected especially by the 1948 Convention No. 87 of the International Labour Organisation. The social dialogue, in which trade unions discuss basic issues concerning employees interests, mainly economic, production, labour, wage, and social conditions, with the government and employers, takes place especially within the framework of the Council of Economic and Social Agreement (tripartite structure), and within bipartite negotiations between social partners (associations of employers and employees), and within collective bargaining between employers and representatives of employees for the conclusion of collective agreements (enterprise and higher levels). PRIORITIES IN 2009 In 2008, the bipartite social dialogue on the national level and the tripartite social dialogue focused mainly on government reforms, which affect practically all spheres of economic life and influence the living standards of employees, pensioners and their families, namely the reforms of public finances, health care reforms, pension reforms, tax reforms, problems of euro adoption, and other topical subjects. The trade unions continue to pay attention to these issues in 2009, when their strategy and tactics in the area of collective bargaining will be adapted to the consequences of the world financial and economic crisis. It is negatively affecting the Czech labour market as well, and has manifested itself in a number of industrial branches (the glassmaking and automobile industries, etc.) by dismissals of employees or by the worsening of their wage and work conditions. In pension insurance, the trade unions will work for the preservation of the existing pay as you go pension system, which faces the threat of part of the resources earmarked for the payment of old-age pensions being transferred to private pension funds, a move that could substantially worsen the pension prospects of present as well as future old-age pensioners. VÍT SAMEK Head of the Legal Department Czech-Moravian Confederation of Trade Unions Samek.Vit@cmkos.cz Photo: PhotoCombo

6 TThe SP CR is a member of the International Organisation of Employers (IOE), the Confederation of European Business (Businesseurope), and the Business and Industry Advisory Committee (BIAC) to the OECD. It works together with OECD s committees for economic cooperation, with the EFTA Standing Committee, et al. The purpose of the Confederation s involvement in international organisations is to secure the necessary flow of information and participate in coordinated action in creating an environment on the European and world markets suitable for Czech enterprises. The Confederation was established in 1990 and has since represented and furthered the interests of its members, in an effort to create a suitable business and employer environment that will lead to the sustainable prosperity of Czech society, while respecting the ethical principles of an enterprise. At the same time it cooperates with other employer, entrepreneurial, and professional associations, the Chamber of Commerce of the Czech Republic, and other entities which share common interests. It also helps to establish commercial and economic relations between Czech and for- EMPLOYERS AND TRADE UNION MEMBERSHIP PERCENTAGES IN THE CR The Confederation of Industry of the Czech Republic (Svaz průmyslu a dopravy - SP CR), which associates employers in the country mostly in the area of industry and transport, is comprised of about entities which have almost employees. eign entities by organising business missions, conferences, round tables, bilateral and multilateral negotiations, and participation of its members in trade fairs, exhibitions, etc. TRADE UNIONS VERSUS EMPLOYERS In collective bargaining, the SP CR represents its members, who have authorised it to conduct this activity. The trade union membership rate among employees in the Czech Republic is estimated at below 20%. However, collective agreements cover more employees, about 24%, because enterprise collective agreements apply to all employees of the particular enterprise. Besides that, there are the so-called higher-level collective agreements, which are concluded by employer organisations with the particular trade unions. These agreements are obligatory for all employees of the given employers, and under certain conditions, higher-level collective agreements can be extended to apply to other employers as well (note: the regulations are contained in Act No.2/1991 Coll. on Collective Bargaining, including amendments concerning collective bargaining procedures, including strike action). Employers, where a trade union organisation exists, are obliged by the Labour Code to fulfil duties in relation to this organisation as a representative of employees: e.g. to inform them about certain matters and discuss some matters with them. There are also matters which require a prior consent of the trade union organisation. Their range is determined by the Labour Code (note: Act No. 262/2006 Coll., the Labour Code as valid). It is important to understand that if a trade union organisation works in an enterprise, the employer shall negotiate a collective agreement with it, regardless of the number of members. The agreement specifies additional rights of employees (e.g. remuneration, increase in severance pay or extension of the leave of absence above the limit set by law, etc.). Rights not agreed on in a collective contract may be set by an employer through an internal regulation. Under the Labour Code, trade union officials are also entitled to be granted time off work with wage compensation to perform activities as employee representatives, or time off without wage compensation to perform trade union activities. It is advisable to have the extent of this time off included in the collective agreement. JITKA HEJDUKOVÁ Director, Employer Relationships Department Confederation of Industry of the Czech Republic jhejdukova@spcr.cz

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