New developments in labour law and their practical implications

On 1 August 2024, a partial amendment to the Labour Code and related laws implemented by the Act 230/2024 Coll.

In this article we present an overview of the most important changes and their practical consequences.

New procedure for calculating the minimum wage

The amendment introduces a new mechanism for calculating the minimum wage, which will now be the product of a prediction of the average gross monthly nominal wage in the national economy for the following calendar year
and the coefficient for calculating the minimum wage. According to the wording of the law, the coefficient for calculating the minimum wage is to be determined in such a way that the resulting minimum wage is appropriate, in particular in relation to the purchasing power of the minimum wage with respect to the cost of living, the general level of wages and their distribution, the rate of wage growth, long-term developments and the level of productivity. An indicative benchmark of 47 % of the average gross wage in the national economy will also be used to assess the adequacy of the minimum wage, but this is not a target as such, but will serve for the purpose of comparing the current level of the minimum wage in relation to the assessment of its adequacy.

In practice, the minimum wage indexation mechanism should look like the following in the coming years:

• No later than 31 August 2024, the Ministry of Finance will issue a forecast of the average gross wage for the calendar year 2025.
• After consultation with the social partners and after taking into account the analysis assessing adequacy (based on the criteria under the Labour Code), the Government will set by regulation two coefficients for 2025 and 2026 (the coefficients are always set 2 years ahead), which will be used to multiply the average gross wage forecast.
• Based on the above, the Ministry of Labour and Social Affairs will calculate the amount, round it up to the nearest hundredth of a cent and announce the minimum wage for 2025 by 30 September 2024.
• The Ministry of Labour and Social Affairs shall repeat the same procedure in 2025.
• In 2026, the Government will set the coefficients for 2027 and 2028 in the same way. Should it happen that the calculated minimum wage does not reach the level last announced, the minimum wage will be announced at the level last announced.

This procedure should already provide clarity on the minimum wage for the following year in September of the year in question, which has certainly not been the case in recent years, when official figures were not published until shortly before the end of the year.

Guaranteed wage abolished

The amendment completely abolishes the concept of a guaranteed wage in the private sector, which means that employers will only have to comply with the minimum wage. According to lawmakers, this measure is intended to simplify the wage system and reduce the administrative burden on employers. Only the minimum wage for public sector employees will be retained in the Labour Code .

However, the abolition of the guaranteed wage (minimum wage for certain professions) does not mean that employers will not have to comply with the principles of equal pay. Thus, if you still have a salary negotiated under the guaranteed wage rules, you must also respect these figures for new employees to avoid unequal treatment.

Remuneration of contract workers

The amendment will also make it possible, in the context of remuneration for employees working under a performance or employment agreement, to negotiate an agreement already taking into account possible night work, work in a difficult working environment or work on Saturdays and Sundays. It will be possible to negotiate the remuneration of the agreement in this way if the extent of work in the above-mentioned difficult working conditions is agreed at the same time and if the amount of additional payments pursuant to Sections 116 to 118 of the Labour Code which would otherwise be granted to the employee on this account is agreed. The employee shall be entitled to an additional payment in accordance with Sections 116 to 118 of the Labour Code for the period of work in the restricted working arrangements in excess of the extent so agreed.

In relation to the minimum wage, an amount corresponding to the amount of the allowances to which the employee would have been entitled if the work in the restricted working arrangements had not been taken into account in the remuneration shall then be deducted from the remuneration under the agreement.

Thus, as in the case of a pay arrangement taking into account overtime, the number of hours worked in these modes will need to be recorded and monitored.

If you are wondering how to set up these processes exactly after the amendment (how to modify the existing FTEs), please let us know and we will be happy to advise you.

Self-scheduling of working time

The amendment allows all employees to self-schedule their working hours, based on a written agreement with their employer. However, the length of the working shift cannot exceed twelve hours and employees must comply with the legal limits on rest and breaks. Until now, this has only been possible for employees working under a work performance agreement, a work activity agreement (according to the opinions of the State Labour Inspection Office) or when working remotely.

An agreement on self-scheduling of working time may be terminated in writing for any reason or without giving any reason with 15 days' notice. The employer and the employee may agree on a different length of notice in the agreement; however, the notice period must be the same for both the employer and the employee.

In practice, if a self-scheduling agreement is reached, the employee will schedule his or her own working hours entirely, so the employer will not create any written timesheet. However, the employer is still obliged under Section 96 of the Labour Code to keep records of the working time of all employees. It is important to note that the employer may not, pursuant to Section 346b(2) of the Labour Code, transfer the risk of performing dependent work to the employee. Thus, if an employee who will be scheduling his/her own working hours does not provide the employer with the appropriate information about his/her working hours, this will be to the employer's detriment.

This change is a major innovation that many professions have been calling for for a long time. Particularly where the performance of work is dependent on external influences (e.g. snow clearance), scheduling shifts in advance has lost any meaning.

Abolition of the obligation to schedule leave in writing

The amendment also abolishes the obligation to draw up a written holiday timetable, which will be a welcome change for employers, as the abolition of this obligation will relieve them of the administrative burden (many employers have long disregarded these obligations anyway).

Trade union pluralism and collective agreements

The amendment regulates the process of concluding a collective agreement in situations where an employer has more than one trade union but they cannot agree on the content of the collective agreement. The employer is now entitled to conclude a collective agreement with the trade union which has the largest number of members in the employment relationship or with several organisations which together represent the largest number of members. The condition for concluding such a collective agreement is that

1) the 30-day period for reaching agreement between the trade unions has expired without success,

2) the employer has publicly announced with which trade union it will conclude the agreement; and

3) 30 days have elapsed since the announcement under 2) without the employees in the employment relationship expressing their disagreement with this procedure.

However, a collective agreement pursuant to the above procedure cannot be concluded unless a majority of all the employer's employees in employment declare in writing, within 30 days of the date of the employer's notification pursuant to 2) above, that they do not agree with this procedure for concluding a collective agreement and deliver this declaration to the employer. At the same time, a majority of all employees will be able to determine with which trade unions the employer will be entitled to conclude a collective agreement.

The effect of this change should be that negotiations on the enterprise collective agreement cannot be blocked by one or more trade unions that disagree with the majority position. This will undoubtedly simplify the procedure for those employers who negotiate collective agreements with many trade unions.