In the Czech Republic, the distinction between an employee and a self-employed worker/independent contractor is primarily regulated by the Czech Labour Code. There is relatively strict assessment under basic characteristics of dependant work as defined in the introductory provisions of the Czech Labour Code. This is a preliminary regulation and is interpreted by the courts, namely by the Czech Supreme Court and the Supreme Administrative Court. These courts deal with contentious cases, which often arise as a result of the subtle differences mentioned above. The cases involve either a contract of employment or a civil law contract.
The question of whether an individual is an employee or a self-employed worker/ independent contractor by status may be asked in various situations, for example; it may be based on a complaint submitted by an individual to the regional branch of the Labour Office and related control of the Labour Office or to the bodies responsible for the inspection of work, in a dispute about the termination of a contract (or the pseudo-contractor may claim permanent employment with the employer) or during a control being made with respect to the payment of social security contributions etc.
a. Factors that Determine Who is an Employee and Who is an Independent Contractor
In the Czech Republic, the prevailing legal relationship is still the employment law relationship. Pursuant to the Czech Labour Code the employment law relationship includes three different forms:
• the contract of employment – basic and widespread form of the employment law relaZonship, which provides for work within the full-time weekly working hours up to 40 hours per week;
• the Agreement to Complete a Job – the scope of work for which an agreement to complete a job is concluded may not exceed 300 hours in a calendar year; and
• the Agreement to Perform Work – work may not be performed on the basis of an agreement to perform work within a scope exceeding, on average, half of the set weekly working hours. Compliance with the agreed and maximum permined scope corresponding to half of the set weekly working hours shall be assessed for the entire term for which the agreement to perform work was concluded, but not exceeding the term of 52 weeks.
While the contract of employment stands for basic and widespread form of the employment law relationship, the other two agreements, on work performed outside an employment law relationship, are only used as supplementary forms of the employment law relationship. The standard of special statutory protection of the employee’s position based on the contract of employment is much higher in comparison with the level of protection under the other two agreements on work performed outside an employment law relationship (namely within agreements on work performed outside an employment law relationship, the employer is not obliged to distribute the employee’s working hours). That is why the Labour Code stipulates that employers shall provide for the performance of their tasks particularly by employees in an employment law relationship. The two agreements on work performed outside an employment law relationship are considered as “dodgy” (or non-official) forms of employment, which are suitable for short-time seasonal jobs, various one-off assignments, occasional summer jobs etc.
Whether the work is performed based on a standard employment law contract or based on one of the other two supplementary agreements mentioned above, there are key characteristics, which are common for any form of dependant work. Factual dependent work may be performed only within an employment law relationship regulated by the Labour Code. This will not be altered by the title of the contract or other formal efforts of the contracting parties to stop the contract from being subsumed within the Labour Code.
The key characteristics of dependent work are as follows:
• the work is performed within a relationship in which the employer is superior and the employee is subordinate;
• the work is performed in the employer’s name;
• the work is performed according to the employer’s instructions; and
• the work is performed personally by the employee for the employer
The duty to subsume a legal relationship within the Labour Code and consider such a relationship “dependent work” based on all the above characteristics must be fulfilled cumulatively.
The consequences of the above key characteristics are that dependent work must be performed:
• for a salary, public sector pay or remuneration for work;
• at the employer’s expense and responsibility; and
• during working hours at the employer’s workplace or at another agreed place.
The assessment of key characteristics and consequences of dependent work implemented in concrete cases is rather demanding and may often lead to misinterpretation. For example, even though the subordination of the employee and employee’s duty to follow the employer’s instructions both stand for the key characteristics of dependent work, one must also take into consideration that even within common commercial relationships the duty to respect contractual conditions represents the usual nature of such non-employment legal relations (e.g. the duty to follow the coordinating client´s instructions, the duty to submit to an inspection respecting technological procedures, work safety and fire regulations etc.). However, such contractual obligations may not be regarded as fitting the conceptual characteristics of subordination, which is typical for dependent work.
With respect to the above, the Supreme Administrative Court ruled that it is obvious that the obligation to fulfil the instructions occurs virtually in all situations, in which the work and/or activity has been assigned or ordered, i.e. not only within the frame of an employment law relationship. The definition of the statutory term “dependent work” cannot therefore be reduced only to legal relations/activities performed under the other´s party instructions, but the dependent work shall be only the activity, which is truly dependent.2
As long as there does not exist a more detailed definition of the individual characteristics of dependent work, the true nature of the relationship between the two contractual parties must be identified in accordance with objective facts. If the activity of an individual in some aspects approaches the definition of dependent work within the meaning of the Labour Code, but is below its intensity, such legal relationship is not subsumed within the definition of ‘dependent work’ in terms of the Labour Code. As long as the legal relationship between the client and the self-employed worker/independent contractor does not cumulatively satisfy all the characteristics of dependent work, or excludes most of the defining criteria, such relationship cannot be considered as a ‘dependent work’ relationship.
The true nature of self-employed worker/independent contractor will be as a rule fulfilled if the self-employed worker/independent contractor:
• provides its services to more customers and does not have an exclusive relationship with just one customer;
• provides its services irregularly, i.e. not in precisely the same amount every week/month;
• decides the place where the activity is carried out, i.e. has not been assigned the regular workplace at the customer ́s premises;
• delivers specialised and qualified activity, oren an activity of a unique nature;
• performs activities, which are commonly performed outside employment law relationships;
• is entitled to remuneration, which relates to the factual provision of the services (amount, flexibility,… etc.) and may be modified with respect to outputs;
• the activity is carried out at the independent contractor’s own expense (the independent contractor has his/her own equipment necessary for the provision of the services such as his/her own laptop, sorware, mobile phone … etc.);
• does not present him/her-self as the client ́s employee;
• in relation to third parties, does not act in the client ́s/employer’s name;
• performs his/her activities at times, which are not strictly stipulated by the client, for example has no standard “working hours”;
• is not an integral part of an organisational chart of the client;
• is not subject to the binding instructions of the client ́s/employer’s senior staff (besides the instructions in relation to control and inspection respecting technological procedures, work safety and fire regulations …etc.);
• the client does not provide the independent contractor with personal protective equipment, work clothes and boots (including uniforms), washing, cleaning and disinfectant agents and protective beverages;
• the professional development is carried out at the independent contractor’s own expense and within his/her free time;
• bears the burden of objective responsibility for damages. For example, with regard to third parties, and is eventually insured against these risks;
• in order to provide professional services has not been trained by the client (besides the initial trainings in relation to control and inspection respecting technological procedures, work safety and fire regulations … etc.);
• is not regarded by third parties as the client’s employee, i.e. is distinguishable from employees of the client (e.g. does not wear clothes with the logo of the customer, does not use business cards and email addresses of the client / customer etc.);
• requested the conclusion of commercial law relationship, i.e. was not interested in conclusion of employment law relationship; the commercial law relationship has not in any way been enforced by the client/ customer and fully meets the interests and desires of the self-employed worker/independent contractor;
• does not perform work, which is commonly performed by the client ́s employees;
• provides or may provide the services even through third parties (e.g. its own employees, subcontractors etc.), the services do not represent only personal performance of the activities; in case of an absence (e.g due to temporary unfitness) the client does not substitute the independent contractor by its employee; and
• acts as an entrepreneur in terms of the Civil Code, i.e. as a person who, on his own account and responsibility, independently carries out a gainful activity in the form of a trade or in a similar manner with the intention to do so consistently for profit.
b. General Differences in Tax Treatment
Conclusion of an employment law relationship (employment law contract, the agreement to complete a job or the agreement to perform work), as well as a civil law contract, gives rise to obligations of payment of the personal income tax advance to the tax office and payment of contributions to the Czech Social Security Administration (CSSA).3 The amount and type of deductions from the employee’s remuneration depends on the type of contract concluded.
Employment law contracts
Income from dependent work includes income and related remuneration from employment. In the Czech Republic, an employee pays 15% Income Tax with an addiZonal 7% solidarity tax surcharge (hence in total 22%), which applies to employees making more than 48 Zmes the average salary (1,355,136 CZK;4 about EUR 50,000) annually.
Pensions are operated by the CSSA and are made up of salary based contributions paid by both the employer and the employee. Receipt of pension benefits is contingent upon payment of the social security contributions (Act No. 589/1992 Col., on Premiums for Social Security and Contribution to the State Policy of Employment, as amended). Employees currently contribute 6.5 percent of their taxable income to social security schemes, while employers contribute 25 percent of the gross taxable income of all its employees. Sickness insurance is an integral part of Social Security; participation in sickness insurance by an employee is mandatory under the law.
Health insurance contributions amount to 13.5 percent of an employee ́s gross taxable income; one third (4.5 percent) of which, is paid by the employee and the remaining two thirds (9 percent) by the employer. There is a new maximum calculation base for payment of social security contributions and contribution to the state employment policy, defined as 48 times the average annual wage. The maximum calculation base for the purpose of insurance premium calculations amounted to CZK 1,355,136 in 2017.
Civil law contracts – independent contractors
In contrast to income gained through employment law relations, the overall taxation of self-employed workers/ independent contractors is lower. This is because all taxes and contributions are paid solely by the independent contractor and are therefore exempt from the employer ́s contributions as explained in the previous section. The independent contractor pays 15% Income Tax with an additional 7% solidarity tax surcharge (hence in total 22%)
If the statutory conditions are satisfied, participation in pension insurance and the payment of a contribution to the state employment policy are mandatory for independent contractors. An independent contractor participates in pension insurance:
applies for contractors making more than 48 times of the average salary (1,355,136 CZK;5 about EUR 50,000) annually.
If the statutory conditions are satisfied, parcipation in pension insurance and the payment of a contribution to the state employment policy are mandatory for independent contractors. An independent contractor participates in pension insurance:
• in a calendar year for the period in which he/she carried out a major independent gainful activity;
• in a calendar year for the period in which he/she carried out a subsidiary independent gainful activity, if the income from the subsidiary independent gainful activity, arer deducting expenses, reached the so-called decisive amount; and
• in a calendar year for the period in which he/she carried out a subsidiary independent gainful activity, if he/she registered for participation in pension insurance.
Pension insurance premiums must be paid by every independent contractor who, in the preceding year, carried out a major independent gainful activity. The premiums are 29.2% of the assessment base. The independent contractor him/herself determines the amount of the annual assessment base for premium payments. The lowest assessment base is determined as 50% of the tax base (under the Income Tax Act). The minimum assessment base is amended each year by a Decree of the Government and differs for major and subsidiary independent gainful activity. In both cases, the months during which the self-employed person was entitled to sickness benefits for the whole month from the sickness insurance scheme for self-employed persons, or was granted maternity benefits in cash, or carried out military service are not included in this number of calendar months.
The maximum (annual) assessment base for self-employed persons for pension insurance premiums and the contribution to the state employment policy is 72 Zmes the average wage. This assessment base for self-employed persons is not reduced by the proportional part.
Unlike employment law relations participation in sickness insurance by independent contractor is voluntary under the law.
c. Differences in Benefit Entitlement
All employee benefits are regulated by the Labour Code and related Governmental Decrees. Additional entitlements may also be granted to employees by the collective agreements and internal regulaZons issued by an employer. The additional entitlements may stipulate rights in employment law relationships that are more favourable for the employees than the rights stipulated in the Labour Code. More favourable rights can also be granted to employees based on individual contracts of employment (typically through employment contracts with senior employees).
Only employees are guaranteed traditional statutory protection, which permeates the entire Labour Code. For example, an employer may give notice to an employee only on the statutory grounds; an employee is entitled to statutory leave (minimum four weeks); maximum full-time weekly working hours is 48 hours per week, including overtime; an employee is entitled to statutory extra payments (for overtime work, for work on holiday, for work on Saturdays and Sundays, for Work in Unfavourable Working Environment, …); and severance pay in cases where the employer terminates the employment contract by giving notice, on the grounds of organisational changes or unfitness to perform the current work due to an accident at work or occupational disease.
In contrast, independent contractors performing “work”, by providing services based on a civil law contract have no rights to any employee entitlements based on labour law. This is in line with the fact that independent contractors are covered neither by the Labour Code nor by other sources of labour law. It implies that the above benefits (such as annual time off, extra payments for service delivery at weekends, severance pay in case of termination of the contract etc.) are only available to independent contractors if they have negotiated it into their contract. For these purposes, the mandate-type contracts (Sec. 2430 et seq. of the Civil Code) or innominate-type contracts (Sec. 1746 part. 2 of the Civil Code) are usually concluded with independent contractors.
On the condition that an independent contractor contributes to the social security system, they may benefit from the same range of social security benefits, which are awarded to employees. Pensions in the Czech Republic are operated by the CSSA and are made up of salary based contributions paid by both the employer and the employee, as well as contributions paid by self-employed individuals/independent contractors. The CSSA is responsible for deciding who is enZtled to pension benefits and the amount awarded to entitled individuals. The CSSA bases its decision on an application, which is submined to the local District Social Security Administration OSSZ/PSSZ/MSSZ, pursuant to the place of the applicant’s permanent residence. If an applicant does not have a permanent residence in the Czech Republic, any OSSZ/PSSZ/MSSZ in the Czech Republic can fill in the application.
The following benefits are provided to employees as well independent contractors from pension insurance if the following conditions are fulfilled:
• old-age pension;
• invalidity pension;
• widow’s and widower’s pension; and
• orphan’s pension.
Following childbirth, a female employee is entitled to maternity leave for a period of 28 weeks; if the employee gives birth to two or more children at the same time, she is entitled to maternity leave for a period of 37 weeks. Maternity leave in connection with childbirth can never be shorter than 14 weeks and cannot be terminated or interrupted prior to six weeks from the date of the birth.
A basic condition for entitlement to financial assistance while on maternity leave is participation in insurance (e.g. continuation of insured employment) at the time of commencement of maternity leave (financial assistance during maternity). A woman who commences maternity leave arer leaving work but within the period of protection is also entitled to the benefit. The period of protection for women whose insurance (employment) terminated during pregnancy is 180 calendar days from the date of termination of the insurance. The insured person must have participated in the sickness insurance scheme for at least 270 calendar days over the last two years before the date of starting the maternity leave to have the right to this benefit.
From 1 January 2014 an employee is entitled to sickness benefits from the insurance company arer the 15th calendar day of his/her temporary incapacity to work. During the first two weeks of the temporary incapacity to work, an employer will provide the employee with a compensation wage for working days; however, compensation for wages, salary or remuneration will not be paid for the first three days of this period. The employee will only be entitled to a compensation wage for the period of the employment relationship that establishes the participation in sickness insurance. The support period lasts no longer than 380 calendar days from the date of the temporary incapacity to work or quarantine order, unless stated otherwise. The amount of sickness benefit per calendar day is 60% of the reduced daily basis of assessment.
In the Czech Republic independent contractors can voluntarily choose whether to participate in sickness insurance or not. If the independent contractor does participate in sickness insurance, he may be entitled to sickness benefits from the insurer, under the same conditions outlined above.
d. Differences in Protection from Termination
As explained above, the high standard of statutory protection under the Labour Code applies exclusively to parties of an employment relationship. They do not apply to civil obligations. This also refers to the conditions of terminating contracts of employment.
Protection from Termination – Employment Contracts
While an employee may give notice to an employer on any grounds or without stating the grounds, an employer may only give notice to an employee on the following grounds (employer ́s notice of termination given without grounds or on the bases of different grounds will be void):
• if the employer or part thereof is being dissolved;
• if the employer or part thereof is being relocated;
• if the employee becomes redundant given a decision of the employer or the competent body on a change in his/her tasks, technical equipment, reduction of the personnel for the purpose of increasing work effectiveness or other organisational changes;
• if the employee may not further perform the current work due to an accident at work, occupational disease or threat of such a disease based on a medical report issued by a provider of occupational health services or a decision of the competent administrative authority reviewing such a medical report, or if the maximum permissible exposure of the employee has been reached at the workplace based on a decision of a public health protection body;
• if the employee is deprived of his/her medical fitness in the long term, given his/ her state of health based on a medical report issued by a provider of occupational health services or a decision of the competent administrative authority reviewing such a medical report;
• if the employee fails to fulfil the prerequisites stipulated by the legal regulations for the performance of the agreed work or if the employee fails to fulfil the proper performance requirements of the agreed work. If non-fulfilment of these requirements is based on unsatisfactory working results, the employee may be given notice on these grounds, but only if the employee has been requested by the employer, in writing, to provide a remedy during the last 12 months and the employee has failed to provide for a remedy within an appropriate deadline;
• if the employee acts in such a way which enables the employer to terminate the employment contract by immediate terminatition, or that gives rise to gross breach of a duty arising out of legal regulations, then an employee may be given notice on the basis of a regular, less serious breach of duty. Notice will be given if the employee has been advised, in writiting, of the possibility of being given notice in relation to a breach of duty which took place within the last six months; and
• if the employee commits a particularly gross breach of any other of his/her duties stipulated in Section 301a. Examples of such an act include; the duty to observe during the first 14 calendar days the regime of an insured person who is temporarily unfit to work and in respect of the obligation to stay at his/her place of residence and comply with the time and scope of permined absence from home pursuant to the Sickness Insurance Act at the time of temporary unfitness to work.
Dismissal must be given in writing otherwise it will not be valid. An employer must specify the relevant grounds in the notice so that they cannot be confused with any other grounds. The grounds for the notice may not be subsequently changed. Dismissal given by an employer may be withdrawn only with the employee ́s consent; both the withdrawal of the notice and the consent to withdraw the notice must also be stipulated in writing.
It is prohibited to give notice to an employee during the period of protection, for example:
• at a time when the employee is found temporarily unfit to work, unless he/she has intentionally caused such unfitness or unless the unfitness arose as a direct consequence of the employee’s drunkenness or abuse of addictive substances;
• in the performance of a military exercise or an extraordinary military exercise;
• at a time when the employee is fully released for the discharge of a public office for a long term;
• at a time when a female employee is pregnant or when a female employee is on maternity leave or when a female or male employee is on parental leave; and
• at a time when an employee working at night is found temporarily unfit to perform night work based on a medical report issued by a provider of occupational health services.
Protection from Termination – Civil Law Contracts
Independent contractors, who provide services based on a civil law contract, have no right to any increased protection against unilateral termination. This corresponds with the fact that mandate-type contracts or innominate-type (not named) contracts are subsumed within the Civil Code; unless explicitly agreed otherwise, they apply only basic rules for termination of any common civil law contract. This means that in practice, unless the contract states otherwise, a mandate-type contract or an innominate-type contract could be terminated overnight.
Unless agreed otherwise, a client may withdraw a contractor ́s agreement at any time; however, she/he shall compensate the contractor for the costs, which she/he has incurred until that time and, where applicable, for any damage incurred, as well as remuneration for work already undertaken in line with the agreement.
If a civil law agreement between the independent contractor and his client is concluded for an indefinite period, and obliges at least one party to perform a continuous or recurrent activity, or obliges at least one party to tolerate such an activity, the obligation can be stopped at the end of a calendar quarter by giving at least three months’ notice of termination.
e. Local Limitations on Use of Independent Contractors
As long as a civil law contract is not intended to disguise a genuine employment relationship, there are no limitations in the Czech Republic regarding the use of civil contracts. The contracting parties are free to choose the contract-type. Mandate-type contracts (Sec. 2430 et seq. of the Civil Code) or innominate-type contracts (Sec. 1746 part. 2 of the Civil Code) are usually applied for legal relations concluded with independent contractors. The statutory provisions of the Civil Code governing various types of contracts apply to contracts whose contents include the essential elements of a contract provided under the basic provision for each of those contracts. Parties may also conclude a contract that is not specifically regulated as a type of contract.
If a civil law contract is intended to obscure a factual employment contract, the former is assessed according to its true nature. Therefore, replacing a contract of employment with any civil law contract, (while meeting the usual criteria of labour employment), actually represents an administrative offence. A fine of between CZK 50,000 (EUR 1,900) and CZK 10, 000,000 (EUR 370,000) can be awarded for such an offence. Moreover, a factual employer would also take responsibility for any health insurance and social security contributions, including the duty of payment of overhead surcharges, related interests and sanctions.
f. Other Ramifications of Classification
Other ramifications of classification of individuals as self-employed workers/independent contractors relate to their reduced level of protection in comparison to the traditionally high levels of protection awarded to employees. For example, only employees enjoy the following increased legal protection:
• the amount of the requested compensation for damage caused by an employee’s negligence may not exceed four and half times the amount of the employee’s average monthly earnings prior to breach of the obligation whereby the damage was caused. This limitation shall not apply if the damage was caused intentionally, under the influence of alcohol or arer abuse of other drugs. The amount of the requested compensation for damage caused by an independent contractor is without any limits;
• an employer is obliged to compensate an employee for damage or non-material damage, which arose due to an accident at work. The damage or non-material damage must have happened during the performance of a working task or in direct connection therewith. On the other hand, the independent contractor ́s client takes no responsibility for an independent contractor ́s accidents at work;
• unless negotiated explicitly otherwise, an independent contractor ́s civil contract may be terminated on any grounds (not only on the statutory grounds, such as organisational changes), whereas an employee is entitled to statutory leave (minimum four weeks). There is no limit on maximum full-time weekly work with regard to independent contractor; the independent contractor is not entitled to any paid leave… etc.;
• most of the safety regulations, such as those regarding the prevention of accidents at work, are not applicable to independent contractors;
• the right to organise themselves in trade union units; only employees may be represented by a trade union and/or works council, including the exercise of the extensive right to information and consultation;
• return of monies paid without justification may be demanded by the employer from the employee but only if the employee knew or must have assumed, under the given circumstances, that these amounts were determined incorrectly or paid out erroneously, and the employer may so demand within three years of the day of their payment; and
• during court disputes, the below basic principles of employment law relationships must be applied as an interpretation rule for employees.
The meaning and purpose of the provisions of the Labour Code are expressed by the basic principles of employment law relationships, which are, in particular,
• special statutory protection of the employee’s position;
• satisfactory and safe conditions for the performance of work,
• just remuneration of the employee;
• proper performance of work by the employee in accordance with the legitimate interests of the employer; and
• equal treatment of employees and prohibition of discrimination against them.
g. Leased or Seconded Employees
Under Czech law, it is possible to:
• temporarily assign employees to another employer; or
• lease employees through employment agency. Temporary assignment
An agreement on the temporary assignment of an employee to another employer can be concluded arer six months from the commencement of the employment law relationship.
No consideration can be provided for temporary assignment of an employee to another employer. If the employer is a legal entity, the agreement must state; the employer’s trade name that the employee is being temporarily assigned to, the date of commencement of the temporary assignment, the type of work to be performed, the place of work and the time for which the temporary assignment is agreed. The agreement may also stipulate the regular workplace for the purposes of travel allowances. The agreement must be concluded in writing.
During temporary assignment, the temporary employer is responsible for providing work to the employee, as well as organising, managing and controlling his/her work, giving him/her binding instructions, creating favourable working conditions and providing occupational health and safety protection. A temporary employer is not entitled to take legal actions in relation to the temporarily assigned employee on behalf of the employer that temporarily assigned the employee.
During temporary assignment, the temporarily assigned employer shall pay the employee’s salary and, if appropriate, travel allowances. The working and salary or public sector pay conditions of the temporarily assigned employee must not be worse than they are or would be under the conditions of a comparable employee of the employer, to which the employee has been temporarily assigned.
“Leasing” of employees through employment agency
Czech law allows employment agencies to temporarily assign an employee to another employer, on the basis that:
• authorisation pursuant to Act on Employment is provided;
• in accordance with the employment contract or agreement between the employee and agency, it is agreed that the agency is able to secure temporary work for an employee; and
• the employee undertakes a duty to perform work according to the user’s instructions.
During the temporary assignment of an employment agency’s employee, the temporary employer will impose working tasks on the employee as well as; organising his/her work, managing and controlling the employee, giving the employee instructions, creating favourable working conditions and providing occupational health and safety protection. However, the temporary employer may not bring legal action in relation to the employee of the employment agency on behalf of the employment agency.
The employment agency and the temporarily assigned employer shall be obliged to ensure that the working and payment conditions of a temporarily assigned employee are not worse than the conditions or potential conditions of a comparable employee. If the working or payment conditions of a temporarily assigned employee are worse during the term of performance of work for the user, the employment agency shall be obliged, at request of the temporarily assigned employee, or if it ascertains this fact otherwise, even without request, to provide equal treatment. The temporarily assigned employee shall have the right to claim the satisfaction of the rights incurred against the employment agency.
An employment agency may not temporarily assign the same employee to the same user for a term exceeding 12 consecutive months. This limitation does not apply in cases where this is requested from the employment agency by an employee of the employment agency or in respect of the performance of work for a period of replacing a female employee who is on maternity leave or parental leave, or for a male employee who is on parental leave.
h. Regulations of the Different Categories of Contracts
In contrast with many other countries, Czech labour and employment law is consolidated into a single Labour code, which is accompanied by other national legislation, judiciary and collective bargaining agreements. Therefore, under Czech law, contracts with independent contractors (including conclusion, terminaZon of a contract, its content, form, interpretation of a contract, limitation periods … etc.) are governed by the Civil Code.
Many of the employment protective regulations constitute a mandatory minimum; a derogating (or divergent) regulation of rights or obligations in employment law relationships must not be lesser or greater than the right or obligation stipulated by the Labour Code or the collective agreement as the least or most admissible. If an employee waives a right granted to them by the Labour Code, collective agreement or internal regulation, such waiver shall not be valid. Conversely there are scarcely any binding rules regarding terms and conditions for the engagement of independent contractors.
In the past three years, the Czech Republic ́s employment law has been significantly affected by reform to the Czech civil law, which came into effect 1 January 2014. Arer 50 years, the former Civil Code (dated 1964, which was adopted in the communist era), was replaced by the entirely new Civil Code (Act No. 89/2012 Coll.). This change represents the most conceptual change in the field of law since the ́Velvet Revolution ́ in 1989, and probably the most extensive change in legal thinking and interpretaZon in the past 50 years. It is natural that such a profound change brings a certain level of chaos in relaZon to experienced orders, including the necessity of companies and individuals to adjust to “new orders”. For example, the reform of the Civil Code brought new regulations into the conclusion of a contract, the interpretation of a contract, limitation periods, news in the form of “offer leners”, as well as “expectation damages” etc.