Mass redundancies: Procedure, conditions, and severance pay

Collective redundancies are among the most complex situations employers face in practice. The Czech Labour Code sets out a strict procedure for this regime, with specific deadlines, information obligations, and sanctions. If you plan to dismiss multiple employees, you need to know exactly what to expect. This article explains the entire procedure under the legislation applicable in the Czech Republic in 2026.

What collective redundancies are and when the regime is triggered

Collective redundancies are not merely the termination of multiple employees. This is a special legal regime regulated under Section 62 of the Labour Code (Czech law), which is triggered only under very specific conditions. Understanding these conditions is absolutely essential.

Under Section 62 of the Labour Code, a collective redundancy means the termination of employment relationships within a period of 30 calendar days based on notices of termination given by the employer for the reasons set out in Section 52(a) to (c). The reasons must be organisational—i.e., the closure of the employer or part of it, the relocation of the employer or part of it, or the redundancy of an employee as a result of an organisational change.

The decisive factor is the number of employees being dismissed depending on the size of your business in the Czech Republic. The collective redundancy regime is triggered if, within a 30-day period, you give notice of termination to at least:

• 10 employees where the employer has 20–100 employees,
• 10% of employees where the employer has 101–300 employees,
• 30 employees where the employer has more than 300 employees.

For employers with fewer than 20 employees, the collective redundancy regime does not apply, and the rules for individual dismissals under Czech law apply instead.

Time aspect and counting termination agreements

Many employers try to circumvent the collective redundancy regime by entering into termination agreements with some employees instead of giving notice. However, the Czech Labour Code addresses this. 

If, within the relevant period of 30 calendar days, the employment relationship of at least 5 employees ends by notice of termination, employees whose employment was terminated by agreement with the employer for the same organisational reasons are also included in the total number.

In practice, this means that even if you give notice to only 5 people and “agree” with another 5 to leave due to redundancy (in a company with 80 employees), you are already within the collective redundancy regime. The attorneys at ARROWS advokátní kancelář deal with this issue routinely and point out that what matters is the substantive reason for termination, not merely the form.

Qualification of organisational reasons

There is also a risk here. An organisational change means a decision of the employer (the competent body) on a change in tasks, technical equipment, a reduction in headcount in order to increase efficiency, or other organisational changes.

The employer must be able to prove that there is a causal link between the adopted decision on the change and the redundancy of the specific employee. If it turned out that someone else was immediately hired to do the same work in place of the dismissed employee, this would not be redundancy and the notice of termination would be invalid under Czech law.

Conditions for triggering collective redundancies

Minimum number of employees in the company

The collective redundancy regime is not triggered if you employ fewer than 20 people. The threshold number of employees is assessed as of the day preceding the day on which the first notice of termination was given. All employees in an employment relationship are included in the total headcount.

Calculating the percentage of employees in medium-sized and larger companies

For companies with 101–300 employees, the criterion is calculated as 10% of the total number of employees. For example, if you have 250 employees, you must dismiss at least 25 people within a 30-day period for it to qualify as a collective redundancy. For companies with more than 300 employees, the criterion is absolute—there must be at least 30 dismissals.

Identifying organisational reasons

Only terminations of employment for the reasons set out in Section 52(a) to (c) of the Labour Code are counted towards collective redundancies. Other dismissal reasons are not included in this category. 

If, during the relevant period, you give notice to an employee for breach of work discipline (Section 52(g)) or for health reasons unrelated to work (Section 52(e)), that employee is not counted towards the collective redundancy quotas.

Legal procedures: What the employer must do and by when

Collective redundancies are a process with strictly defined steps under Czech legislation. If you fail to comply with any of the obligations, you risk a fine from the Labour Inspectorate or an extension of the duration of the employment relationships.

Step 1: Informing employee representatives or individual employees

You must carry out this step demonstrably and in writing no later than 30 days before you give notice of termination to the first employee. If a trade union or works council operates at your workplace, you inform them. If not, you must inform each affected employee directly.

Under Section 62(2) of the Labour Code, the information must include:

• The reasons for the collective redundancies,
• The number and occupational composition of the employees to be dismissed,
• The number and occupational composition of all employees,
• The period in which the collective redundancies are to take place,
• The criteria proposed for selecting the employees to be dismissed,
• Severance pay and, where applicable, other employee rights.

This information must be in writing and delivered. The best approach is personal delivery against signature or delivery to the employee’s data box (datová schránka) (if they have one set up and have not prohibited service), or alternatively by post as registered personal delivery.

Consultations with employee representatives

The employer is obliged to discuss with the trade union or works council (or with individual employees if there are no representatives) measures to mitigate the adverse consequences of collective redundancies (e.g., the possibility of reassignment to other work).

Important: Even if you do not reach an agreement, you meet the obligation to consult by initiating and conducting the consultations.

Step 2: Notification to the Labour Office

You must simultaneously deliver the same written information (with the same content as provided to employees/unions) to the regional branch of the Labour Office (Úřad práce) competent according to the employer’s place of activity in the Czech Republic.

Step 3: Serving termination notices

Only after the 30-day period has elapsed from informing employee representatives (or the employees themselves) may you start serving termination notices. The notice of termination must be in writing and must specify the reason in factual terms so that it cannot be confused with another reason.

Step 4: Sending the final written report to the Labour Office

The employer is obliged to demonstrably deliver to the competent regional branch of the Labour Office (Úřad práce) a written report on its decision on collective redundancies in the Czech Republic and on the results of negotiations with the trade union or the employees’ council. In the report, you will state the total number and occupational composition of the employees affected by the redundancies. One copy of the report must also be delivered to employee representatives.

Key rule: The employment relationship of an employee dismissed as part of a collective redundancy will end by notice of termination no earlier than 30 days after this written report has been delivered to the Labour Office, unless the employee declares that they do not insist on this extension.

If you are late in delivering the report (e.g., you send it only one week before the end of the standard notice period), the employment relationship is automatically extended so that the 30-day period from delivery is complied with. The employee is entitled to wage compensation for this period.

Severance pay: Amount, calculation and payment

Employees whose employment is terminated by notice or by agreement for organisational reasons (Section 52(a) to (c) of the Czech Labour Code) are legally entitled to severance pay.

Severance pay amount depending on length of employment

The minimum amount of severance pay is governed by Section 67 of the Czech Labour Code:

• Less than 1 year of employment: one times the average earnings.
• 1 year up to less than 2 years: two times the average earnings.
• At least 2 years: three times the average earnings.

A collective agreement or internal regulation may provide for higher severance pay.

How average earnings are calculated

For severance pay purposes, the average monthly earnings are used. These are determined from the gross wage accounted for payment in the relevant period and from the time worked in the relevant period. The relevant period is the previous calendar quarter.

Payment date and method

Severance pay is paid by the employer after the employment ends, on the nearest payroll date designated for wage payment, unless the employer agrees with the employee on payment on the date the employment ends or on a later payment date.

Practical detail: If the employee starts working again for the same employer (in an employment-law relationship) before the period corresponding to the amount of severance pay provided has elapsed, they must return a proportional part of the severance pay. This also applies to work performed under Czech agreements outside employment (DPP, DPČ).

Risks and sanctions for non-compliance with the process

Financial sanctions

Under the Czech Employment Act, the labour inspection authority may impose a fine of up to CZK 500,000 for breaches of obligations related to collective redundancies (e.g., failure to deliver the report to the Labour Office). If the employer’s conduct also meets the elements of other administrative offences under the Czech Labour Inspection Act, fines may reach up to CZK 1,000,000.

Invalid termination notices and court disputes

A much greater financial risk than an administrative fine is a claim for invalidity of the termination. If a Czech court finds the termination invalid (e.g., due to a fictitious organisational reason or discriminatory selection), the employment relationship continues and the employer must pay the employee wage compensation for the entire duration of the dispute, which may last several years.

Extension of employment

If you do not deliver the final report to the Labour Office on time, the employment relationship is extended by law. This means additional wage costs that you did not anticipate.

Risks and sanctions	How ARROWS helps (office@arws.cz)
Fine for administrative errors: Up to CZK 500,000 for failing to inform the Labour Office or trade unions	Preparation and delivery of information: The Czech legal team at ARROWS advokátní kancelář will prepare all documents in compliance with Czech law and ensure timely delivery
Invalid termination and wage compensation: Court dispute over invalidity and back payment of wages for months or years	Legal support and prevention: Our attorneys in Prague at ARROWS will set up the process so that it is defensible in Czech courts, and in the event of a dispute we will represent you
Discrimination in selecting employees: Fine up to CZK 1,000,000 and claims for non-pecuniary damage	Setting objective criteria: We will help set transparent criteria for selecting redundant employees that will stand up under Czech legislation
Extension of employment: Unnecessary wage costs due to late delivery of the report to the Labour Office	Monitoring deadlines: ARROWS advokátní kancelář will ensure the final report is delivered on time and employment relationships end as planned

Employee protection: Special situations

Pregnant employees and employees on maternity leave

The Czech Labour Code provides special protection to certain groups of employees. Pregnant employees, employees on maternity leave, or employees on parental leave may not be given notice of termination for redundancy (Section 52(c)).

Exception: The prohibition on termination does not apply if the employer or part of it is being wound up (Section 52(a)). In the case of collective redundancies due to the winding up of the employer, it is therefore possible to serve notice even on a pregnant employee. However, if it is “only” a headcount reduction (redundancy), a pregnant employee is absolutely protected and must not be dismissed.

If the employer is merely relocating (Section 52(b)), the prohibition on termination applies to pregnant employees and employees on maternity/parental leave, except where the employer relocates outside the employees’ place of work and they do not agree to the transfer.

Employees on sick leave

The protected period also applies to employees who have been recognised as temporarily unfit for work (provided they did not cause the incapacity intentionally or while intoxicated). They cannot be given notice of termination for redundancy during illness.

If the notice of termination was served before the illness began, the protected period is not counted towards the notice period, unless the employee states that they do not insist on the extension. The exception for the winding up of the employer also applies here—in such a case, the protection does not apply.

Members of trade union bodies

Members of a trade union body operating at the employer may be given notice of termination only with the prior consent of the trade union, during their term of office and for 1 year after it ends. If the union refuses to grant consent, the termination is invalid unless a court in the dispute finds that it cannot fairly be required of the employer to continue employing the employee.

Related questions on employee protection in collective redundancies (Czech Republic)

1. Can I dismiss a pregnant woman as part of a collective redundancy?
Only if the reason for dismissal is the closure of the employer or part of it (Section 52(a) of the Czech Labour Code). If the reason is redundancy or reorganisation, a pregnant employee is in a protected period and must not be given notice.

2. What exactly is the protected period?
The protected period includes pregnancy, maternity leave and parental leave. It also includes periods of temporary incapacity for work, performance of a public office, or caring for a child.

3. What happens if I breach the protection and dismiss a protected employee?
The notice is invalid under Czech law. If the employee notifies the employer that they insist on continued employment, the employment relationship continues and the employee is entitled to wage compensation until the employment is validly terminated.

Not sure what to do? Contact our labour law experts:

Employee selection strategy: How to avoid discrimination

The Czech Labour Code and the Czech Anti-Discrimination Act prohibit both direct and indirect discrimination. An employer must not select employees for dismissal based on age, gender, disability, race, religion, or sexual orientation.

Objective criteria

When selecting redundant employees, you must choose objective criteria linked to the company’s needs. Examples of legitimate criteria include:

• Work results and performance ,
• Qualifications and skills (e.g., language skills, specialisation),
• Length of professional experience in the field (note: this must not be confused with age),
• Employee versatility (ability to perform multiple roles).

Criteria that are high-risk

Age: Dismissing exclusively employees of retirement age, or conversely young employees without families, may be considered age discrimination.

Family situation: Criteria such as “single mothers” or “mothers with children” are impermissible if they would lead to their disadvantage. Conversely, taking social circumstances into account in the employee’s favour (the so-called social criterion) is possible under Czech practice, but it must not be the only criterion at the expense of professional competence if the employer needs that competence.

Process documentation

It is essential to have written documentation explaining why a specific employee A was selected, and not employee B. If the matter goes to court in the Czech Republic, the burden of proof (in cases of alleged discrimination) may shift to the employer, who must prove that they did not discriminate.

Related questions on dismissals 

1. Can I mainly dismiss older employees who are entitled to a pension?
Blanket dismissal of people of retirement age is discriminatory (age discrimination). The selection must be based on performance or qualifications, not date of birth.

2. What is the employer’s liability for discrimination?
The employer faces a fine from the Czech Labour Inspectorate (up to CZK 1 million) and an obligation to compensate the employee for both pecuniary and non-pecuniary harm (monetary satisfaction), as determined by the Czech courts.

Special situations: Employees on probation and temporary workers

Probationary period

For employees in a probationary period, the employment relationship may be terminated in writing for any reason or without stating a reason (Section 66 of the Czech Labour Code). However, these employees are still included in the total headcount relevant for the collective redundancy thresholds. Note: During the probationary period, the employer must not terminate employment within the first 14 calendar days of the employee’s temporary incapacity for work.

Temporary workers and agencies

Agency workers are not employees of the user undertaking, but of the employment agency. They are not included in the collective redundancy quotas at the user undertaking. However, if the assignment of a larger number of agency workers ends, the user undertaking must discuss this with the trade union.

What actually happens in practice

Our Czech legal team at ARROWS, a Prague-based law firm, deals with these matters on a daily basis. Common mistakes we address include:

• The employer forgets to include workers engaged under agreements outside standard employment (DPP/DPČ) in the total headcount for determining the size of the undertaking, or forgets to include “agreements to terminate employment” in the number of employees being dismissed.
• The final report is sent to the Labour Office by “ordinary” mail and there is no proof of delivery, or it is delivered to the wrong branch.
• The employer fails to respect the prohibition on giving notice to a pregnant employee during a reorganisation (mistakenly believing that collective redundancy removes all protections).

ARROWS advokátní kancelář can handle this agenda for you end-to-end in the Czech Republic. With professional liability insurance up to tens to hundreds of millions of Czech crowns, you can be confident that your risks are covered.

European aspects and international workforce teams

The collective redundancy regime is harmonised across the EU by Council Directive 98/59/EC. This means similar rules apply in other Member States as well, although deadlines and thresholds may differ. 

If you manage redundancies within an international group, do not assume that “it’s the same in Germany”. Local law must always be applied. ARROWS International can also ensure cross-border coordination through its network of partners.

Summary table of steps and deadlines

Phase	Time	What to do
Notification	At least 30 days before notice is given	Notify the trade union/employees and the Labour Office in writing. Start consultations.
Notices	After 30 days have elapsed from the notification	Deliver notices to employees.
Labour Office report	During the notice period	Deliver a written report on the outcome of the consultations to the Labour Office.
Termination of employment	After the notice period expires	The condition is that at least 30 days have elapsed since the Labour Office report was delivered.

Quick summary

• Definition of collective redundancies: This involves the termination of employment relationships with a prescribed number of employees (at least 10–30 people depending on the size of the undertaking) within a period of 30 calendar days due to organisational changes. This regime applies only to employers who employ at least 20 employees in the Czech Republic.
• Critical deadlines: The employer must inform the trade union, the employees’ council, or individual employees in writing no later than 30 days before serving the notices of termination. Subsequently, the employer must deliver a written report to the regional branch of the Labour Office (Úřad práce) in the Czech Republic. The employment relationship of an employee dismissed as part of a collective redundancy may end no earlier than after 30 days have elapsed from the delivery of this final report to the Labour Office.
• Mandatory employee entitlements: All dismissed employees are guaranteed statutory severance pay in the amount of 1–3 times their average earnings, depending on the length of employment. The employer must also respect statutory prohibitions on termination (protective periods) under Czech labour law, for example for pregnant employees or employees on temporary sick leave.
• Risk of financial penalties: A breach of the information obligations towards the Labour Office may be sanctioned by a fine of up to CZK 500,000 under the Employment Act. Other breaches of Czech labour regulations (e.g., discrimination, invalid termination of employment) may be penalised with fines under the Labour Inspection Act of up to CZK 1,000,000.

Conclusion

Collective redundancies are a formalised process where improvisation does not pay off. An error in calculating deadlines or a failure to comply with an information obligation may lead to the invalidity of the terminations and the need to pay wage compensation for months during which employees did not work.

ARROWS advokátní kancelář’s Czech legal team has experience in handling these situations for clients of all sizes. If you do not want to take risks, entrust this agenda to professionals. Email us at office@arws.cz to arrange a consultation.

Most common legal questions on collective redundancies in the Czech Republic

1. If I have exactly 21 employees and I want to dismiss 10, is this a collective redundancy?
Yes. The threshold for employers with 20–100 employees is 10 dismissals. You must follow the entire process under Section 62 of the Czech Labour Code.

2. Can I “manage” collective redundancies by spreading the notices over two months?
If, in any period of 30 consecutive calendar days, you do not reach the threshold numbers, it will not be considered a collective redundancy. However, beware of purposeful circumvention of the law and the fact that both terminations and agreements for organisational reasons are counted together under Czech law.

3. What deadline applies for the employee’s employment to end?
The employment ends upon expiry of the notice period, but not earlier than after 30 days have elapsed from the delivery of the final report to the Labour Office.

4. How much severance pay do I have to pay to each employee?
At least 1–3 times the average earnings depending on the length of employment (Section 67 of the Czech Labour Code).

5. Can I dismiss a pregnant woman if she is included in the collective redundancy?
Only if the employer is being completely dissolved (Section 52(a)). In the case of reorganisation/redundancy (Section 52(c)), no.

6. How long does the entire process take from the decision to dismiss?
At least approximately 3.5 to 4 months (30 days of consultations + 2 months’ notice period + administration). For speed and certainty, contact ARROWS advokátní kancelář at office@arws.cz.

Notice: The information contained in this article is of a general informational nature only and is intended for basic orientation in the matter. Although we strive for maximum accuracy, legal regulations and their interpretation evolve over time. To verify the current wording of the regulations and their application to your specific situation, it is therefore necessary to contact ARROWS advokátní kancelář directly (office@arws.cz). We accept no liability for any damages or complications arising from the independent use of the information in this article without our prior individual legal consultation and expert assessment. Each case requires a tailored solution, so please do not hesitate to contact us.

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