Czech Republic: Dismissals due to the coronavirus crisis

28 April 2020 | czech republic newsletters

The economic hardship caused by the global outbreak of COVID-19 will inevitably lead many businesses to dismiss employees.

Below we summarise basic information regarding dismissals in the context of the coronavirus crisis. This text does not deal with termination of employment for other, unrelated reasons, e.g. on grounds of unsatisfactory work results, breach of the employee's duties, or due to health reasons, etc. 

Methods of terminating employment

One of the easiest ways of terminating employment is termination during the probationary period, i.e. unilaterally, with immediate effect (unless a later date is determined) and without need to state any reasons. The probationary period is automatically extended by the period of full-day obstacles to work due to which the employee does not perform work (e.g. sick leave, obstacles to work on the employer's side, such as closure of operation due to COVID-19) and by full-day leave of absence (vacation leave) during the probationary period.

Other possibilities are termination by the expiration of the agreed period for which the employment contract was concluded or conclusion of an agreement on termination, if the employee agrees to that or suggests the conclusion of such an agreement himself.

Organisational reasons

In some cases, the employer does not have the aforementioned options and is thus forced to dismiss the employees on so-called organisational grounds, i.e. if the employer's undertaking is to be closed down or relocated or if the employee becomes redundant owing to the employer's decision on organisational changes (restructuring) consisting in, e.g. reduction of the number of employees.

In such a case, the employee is entitled to severance pay at least in the amount equal to one to three times his average earnings, depending on the duration of the employment. The employee will receive the severance pay even where the employment is terminated by agreement due to organisational reasons.

It is also necessary to heed the notice period, which is at least two months and commences on the first day of the calendar month following delivery (service) of the notice to the employee.

Collective dismissals

Should the dismissals impact a considerable number of employees, i.e. if within a period of 30 calendar days the employer dismisses for organisational reasons no less than (i) ten employees, where an employer employs from 20 to 100 employees, (ii)  10 % of employees, where an employer employs from 101 to 300 employees, or (iii) 30 employees, where an employer employs more than 300 employees, such a situation is qualified as collective dismissal. Where the employment of at least five employees is terminated under the above-mentioned conditions, the total number of employees pursuant to (i) to (iii) will also include those employees whose employment is terminated for organisational reasons by an agreement.

According to the Czech Labour Code, the employer has information and consultation duties connected with collective dismissals.

Before giving notice to individual employees, the employer must inform the trade union organisation and the works council in writing of this fact in a timely manner, at the latest 30 days in advance. The employer must also provide information about the reasons for the collective dismissals, the number and professional qualifications of the employees to be made redundant, and other facts as prescribed by the Labour Code. The employer must try to seek an agreement with the trade union organisation and the works council , in particular with regard to measures aimed at preventing or reducing the collective dismissals and mitigating their adverse implications for the employees; however, their consent with the collective dismissals is not needed. In addition, the employer must duly inform the regional branch of the Labour Office in writing of the facts related to the collective dismissals as provided in the Labour Code. The employment of collectively dismissed employee shall be terminated no earlier than after the lapse of 30 calendar days after the report in writing is delivered to the regional branch of the Labour Office.

If there is no trade union organisation or works council at the employer's undertaking, the employer must fulfil the information and consultation duties individually towards every employee affected by the collective dismissals.

Dismissals and the Antivirus Programme

If the employer applies for a contribution (i.e. partial compensation of total wage costs) in the Antivirus Programme, the employment of an employee that is connected to such a contribution cannot be terminated (except due to breach of the employee's duties).

According to the latest version of the Manual for Employers published by the Ministry of Labour and Social Affairs, employment cannot be terminated (nor shall a notice period commence) at the time when the statement of account of the compensatory wages (a stage in the application process) is submitted to the regional branch of the Labour Office.

Information sources

Stay informed and regularly check the websites of Czech authorities, such as:

Ministry of Labour and Social Affairs (Ministerstvo práce a sociálních věcí) at www.mpsv.cz

Labour Office of the Czech Republic uradprace.cz 

State Labour Inspection Office (Státní úřad inspekce práce) at www.suip.cz

Government of the Czech Republic (Vláda české republiky) at www.vlada.cz

Marie Gremillot

Attorney at Law

T: +42 225 996 529
m.gremillot@schoenherr.eu

legal service:

labour & employment

country:

czech republic