Czech MPs OK major changes to labor code—Here's what you need to know

The Czech Chamber of Deputies passed a government-backed amendment to the country's labor code on Friday, introducing changes designed to make the labor market more flexible for both employers and employees.

While the amendment includes significant adjustments to probationary periods, unemployment benefits, and employee protections, a controversial provision allowing termination without cause was rejected.

Despite support from some lawmakers, the proposal to allow employers to dismiss employees without providing a reason was not included in the final version of the bill. The amendment still requires Senate approval and the President’s signature before taking effect.

The passed amendment includes several noteworthy changes aimed at increasing flexibility in the Czech labor market. The probationary period for employees will be extended, from three to four months for regular staff and from six to eight months for senior staff.

Additionally, the notice period when leaving a job (or terminating an employee) will now begin as soon as the notice is delivered, rather than from the first of the following month as previously practiced.

In a bid to improve unemployment benefits, the bill proposes increasing the benefit amount during the initial months of unemployment, from 65 percent to 80 percent of their previous average net earnings.

However, this amount will gradually decrease, dropping to 40 percent in the final months. People aged 52 and over would receive unemployment benefits for a longer period than those under 52.

Other adjustments in the bill include allowing employees to schedule shifts with employers’ consent, and expanding parental leave protections, ensuring parents on leave remain in their original roles until the child reaches two years old.

The proposed change allowing employees to be dismissed without cause led to heated debates among lawmakers. While the Civic Democrats and TOP 09 supported the proposal, arguing it would increase labor market flexibility, other parties, including the Christian Democrats and ANO, strongly opposed it.

The provision was criticized for undermining employee protections, with opponents, such as opposition leader Andrej Babiš, labeling it as detrimental to workers. Similarly, the Freedom and Direct Democracy party expressed its firm stance against the change, with chair Tomio Okamura calling it an attack on workers’ rights.

The debate reached a peak as trade unions mobilized against the provision, warning of potential strikes if the proposal were to pass. Union leaders, including Josef Středula of the Czech-Moravian Confederation of Trade Unions (CMKOS), claimed their efforts played a significant role in preventing the termination without cause clause from becoming part of the bill.

Despite the defeat of the controversial provision, employers have expressed general support for the amendments, believing they strike a better balance between the needs of both parties.

CMKOS also welcomed the change, emphasizing that it would help address challenges such as the shortage of skilled workers and the demands of a rapidly digitalizing labor market.

Kristýna Ropková, an attorney at Frank Bold Advokáti, told Czech News Agency that the amendments reflect the evolving needs of both employers and employees, particularly in terms of reconciling work with family life.

She believes that the amendments are a step forward in modernizing the labor market and offering greater flexibility in employment relations. The changes to the Czech labor code will next head to the Senate and President Petr Pavel before entering law.