Peterka & Partners Partner Adela Krbcova talks about labor in 2025 in the Czech Republic.
CEELM: What are the likely most important labor legislative updates you expect in the Czech Republic in 2025?
Krbcova: We are preparing for a new amendment to the Labor Code, known as the “Flexi Amendment.” The purpose of the amendment is to stimulate the labor market, for example, by extending the probationary period or shortening the notice period in certain cases and adjusting its duration.
The amendment also introduces some positive changes for parents, such as the opportunity to be employed during their parental leave under flexible arrangements for the same scope of work as in their standard employment contract.
Partial changes, such as the right to paid leave in the case of invalid dismissal, easier electronic delivery of salary statements, the possibility of being paid in foreign currency for a wider category of employees, and some other changes are also on the table. The Flexi Amendment is likely to affect occupational health services and abolish the much-criticized entrance medical checks for light work.
In addition to the Flexi Amendment, employers should also begin to familiarize themselves with the requirements of the new Pay Transparency Directive, which is not due to be implemented until 2026 but its introduction will require more in-depth preparation for many employers. Implementation work is progressing at different rates across the European Union, which means that multinational companies may be interested in the regulation before it is adopted locally in the Czech Republic.
I should not forget to mention the abolition of lay juries in district courts dealing with labor cases.
CEELM: Of the above, which ones are you/your clients most excited about and why?
Krbcova: I dare say that some clients have been, and may still be, looking forward to the “dismissal without cause” that a group of MPs are trying to push through in the Flexi Amendment. This would be a ground-breaking innovation, as at present employees can only be dismissed for statutory reasons and under strict conditions. The employee would not leave empty-handed, but roughly with six months’ severance pay. However, it is unlikely to be implemented in an election year.
CEELM: On the flip side, which ones are you/your clients dreading the most and why?
Krbcova: Concerns may be raised by many employers about the administrative burden of the announced Pay Transparency Directive, particularly in terms of reporting. Increased transparency in this area may also run counter to the traditional notion that pay is not discussed much in the workplace, and in some companies’ confidentiality clauses have even been used specifically in relation to one’s own pay. Prohibition of such agreements is likely to be included already in the Flexi Amendment.
Personally, I look forward to the implementation of the Pay Transparency Directive. I believe that a proper and timely review of the organizational structure, job descriptions, and pay systems within employers, and, in some cases, the attitudes of their stakeholders, will not only facilitate the implementation of the requirements of the directive next year but will also contribute to a better setting and understanding of the labor agenda as a whole.
I can’t say that there’s anything to fear in 2025 from a labor perspective. I am more curious about how labor inspectorates will use their new powers to assess illegal work and disguised employment, especially whether they will actually publish decisions on offenses in this area on the official website of the State Labor Inspectorate.
CEELM: What trends do you expect will impact the work of labor lawyers in the Czech Republic the most in 2025?
Krbcova: The trend toward digitalization of the labor agenda is certainly continuing, and there is even the first glimmer of judicial practice where the court has recognized the conclusion of a contract via the Docusign platform as legally sound. Although this was not an employment or Supreme Court case, it is a good sign for HR and employment lawyers alike. Nevertheless, when digitalizing the HR agenda, and, in particular, practicing the electronic delivery of important documents, it is necessary to be careful and set everything up properly so that the employer can meet the burden of proof in the event of a dispute. Similarly, the implications of the GDPR and cybersecurity should not be forgotten. Another trend is, and will continue to be, the rise of AI.
CEELM: What are the biggest challenges faced by employers in the Czech Republic at the moment, and to what extent do you expect these challenges to be addressed this year?
Krbcova: A major challenge for Czech employers remains the shortage of labor in almost all sectors due to low unemployment and strict immigration laws which, despite some partial changes, continue to make it difficult to employ foreigners from third countries.
This article was originally published in Issue 12.1 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.
