The New Civil Code, i.e. Act No. 89/2012 Coll., the Civil Code (hereinafter “NCC”) came into effect on 1 January 2014. The NCC has had a major impact on the entire sphere of private law, not excluding labour law, which is largely regulated by Act No. 262/2006 Coll., the Labour Code (hereinafter “LC”).
In the context of the change in certain existing legal institutions and the introduction of new principles of private law, the LC was amended by Act No. 303/2013 Coll., amending certain acts in relation to the adoption of the re-codification of private law (hereinafter “amendment”), to match the structure of the NCC. You will find a list of some of the most important changes and amendments of the LC below.
1) Application of the NCC in labour relations
The NCC has the nature of general legislation in relation to the LC, which means that rights and obligations not addressed in the LC are governed by the NCC. The relevant provisions of the NCC therefore also apply to labour relations, unless expressly excluded in the LC, or where the LC stipulates its own regulations.
Labour relations must therefore also observe the basic principles of private law expressed in Sections 1-14 of the NCC and the provisions governing invalid legal acts set forth in Section 574 et seq.
Restrictions on the application of the NCC are set forth in Section 346d of the LC, which states that:
- A lien cannot be used to secure a debt arising from an employment relationship, where the employee’s debt to the employer only arises in the future
- A lien cannot be established on an item to which the employee’s right of ownership only arises in the future
- The employer or the employee may not withhold the other party’s movables to secure a debt arising from an employment relationship
- The employer or the employee cannot be obliged to enter into a contract with a third party, where the content of such a contract is the employer or the employee’s rights and obligations
- Any claims the employer or the employee may have against one another arising from the employment relationship cannot be assigned to another party
- The employment contract or agreement for work performed outside employment cannot be assigned to another party
- Any debts the employer or the employee may have against one another, may not be assumed by another party
- Employees cannot undertake to fulfil obligations jointly and severally
- A contractual penalty may only be set for a breach of the non-competition clause
2) Absolutely invalid legal acts in labour relations
The LC includes special provisions governing the absolute invalidity of certain legal acts. This absolute invalidity is either the result of a failure to comply with the written form of legal acts or a violation of statutory prohibitions.
The written form, under the penalty of absolute invalidity, is required for the following legal acts:
- Collective agreements
- Withdrawal from an employment contract
- Notice and immediate termination of employment
- Termination of employment during the probationary period
- Notice and immediate termination of an agreement for work outside of employment
In the absence of the written form of the above legal acts, these legal acts will be disregarded, as if they had never existed, and the absence of the written form cannot be rectified after the fact.
Other legal acts, which the law requires to be executed in written form, are only invalid on non-compliance with the form prescribed in Section 582 of the NCC, if the parties fail to rectify this defect after the fact.
Legal acts that violate the following prohibitions are also absolutely invalid:
- Prohibited surrender of an employee’s right(s) granted by the LC, the collective agreement or internal regulations
- Prohibited withdrawal from the collective agreement
- Prohibited imposition of obligations or the curtailment of employee rights in the collective agreement or internal regulations (see point 3 below)
- Prohibited assignment of the right to wages, salary, agreed remuneration or wages compensation (see point 4 below)
- Prohibited use of the right to wages, salary, agreed remuneration, part thereof, or wages compensation to secure a debt (see point 4 below)
- Prohibited imposition of financial penalties for a breach of obligation arising from an employment relationship
- Prohibited transfer of risk arising from the execution of employment to the employee
- Prohibited requirement for a financial guarantee in relation to the execution of employment
- Prohibited imposition of sanctions on employees exercising their rights under an employment relationship
- Prohibited exoneration of an employer of the right to provide employees with wages, salary, agreed remuneration or wages compensation, severance pay, remuneration for on-call duty and reimbursement of expenses incurred by employees in relation to the performance of work.
A deviation from the above prohibitions is not possible even with the employee’s consent. Legal acts that violate these prohibitions will be disregarded.
3) Imposition of obligations on employees in the collective agreement and internal regulations
In Section 23 of the LC, the amendment introduces an explicit prohibition on the negotiation of a collective agreement that imposes obligations or curtails the rights of employees as set forth in the LC.
According to the explanatory memorandum to the amendment, the employer’s internal regulations are primarily intended to allow employers, especially employers at which there are no trade unions, to increase their employees’ minimum social standard. For this reason, in Section 305 of the LC, the amendment explicitly prohibits internal regulations from imposing obligations or curtailing employee rights provided under the LC.
Therefore, neither collective agreements nor internal regulations may impose any obligations on employees. However, this prohibition does not apply to working regulations as set forth in Section 306 of the LC, according to which working regulations expand on the employee and employer’s obligations arising from labour relations.
Agreements violating the above prohibitions will be disregarded, as if they had never existed.
4) Restrictions on the disposal of the right to wages
The amendment introduces broad protection of the right to wages, salary, agreed remuneration or wages compensation (hereinafter collectively referred to as “wages”) from penalisation, including contractual penalisation. Thus in Section 144a, the LC prohibits the assignment of the right to wages to another party or the use of the right to wages to secure a debt.
The employee cannot therefore surrender his/her right to wages to a third party, even voluntarily. The law only allows one exception, and that is the case of wage deductions carried out in accordance with the law.
5) Invalid legal acts in labour relations due to defects in content
The provisions of Section 18 of the LC governing invalid legal acts due to defects in content were repealed, as this is covered by Section 574 et seq. of the NCC. The principle that a defect in the content of a legal act in labour relations is only invalid if the party affected by this act invokes its invalidity was deleted. If there are grounds for the absolute invalidity of a legal act in labour relations, this act will be invalid, without either of the parties having to invoke its invalidity.
Instead of provisions on the invalidity of legal acts, Section 18 of the LC newly contains a new interpretive rule under which, if a legal act can be interpreted in different ways, the interpretation most favourable to the employee will be used, regardless of who caused the ambiguity of this legal act. This is therefore a further reinforcement of the mployee’s position in labour relations.
For more information, please contact K&A partner, Mgr. Jiří Kučera, e-mail: jkucera@kuceralegal.cz; tel.: +420604242241.