LEGALINK CROSS-BORDER LAYOFFS QUESTIONNAIRE

In the Czech Republic, legal regulations of layoffs are based on the EC directive No. 98/59 and on the approximation of the laws of the Member States relating to collective redundancies whose requirements have been adopted by the Czech Labor Code.  According to the Czech Labor Code, a layoff (in Czech legal terminology “hromadné propouštění” and usually translated as collective dismissals) is the termination of employment relationships within a period of 30 calendar days in any of the following scenarios:  when one employer with 20 to 100 employees terminates at least 10 employees; when an employer terminates 10 % of employees from a total number of 101 to 300 employees; or when an employer terminates 30 employees from a total number of more than 300 employees on so-called organizational grounds such as closing down, relocating, or restructuring by the employer that causes the employee to become redundant.

Relocation of an employer is not a reason for a termination of an employment relationship by the employer if the relocation proceeds within the place of work as determined by the employment agreement (e.g. Prague has been set as a place of work in the employment agreement and the employer moves within Prague).  Part of an employer can include an organizational unit of the employer even if that unit is operating quite independently in relation to the employer’s business activity. 

Redundancy of an employee is based on the decision of the employer to change activities, technical equipment or to reduce the number of employees for the purpose of increasing labor productivity or to introduce other organizational changes.  In these instances, the employer has to report his intention to the trade union or works council 30 days before giving notice of the employment relationship’s termination to individual employees.  As a consequence, the intended layoff should have the subject of consultations with union or works council with regard to measures aimed at reduction of negative implications of the collective dismissal to affected employees.  Where neither trade union nor works council are operated by the employer, the employer must give notice on its own to every employee affected by collective dismissals.   When the employment relationship is terminated by employer for a so-called organizational grounds (regardless if in the frame of the collective dismissal or not) there is always an obligation of the employer to disburse a severance pay. The amount of the severance pay corresponds to at least three times average monthly earnings of each employee.