Agreements on work outside the employment relationship are popular in the Czech legal environment both among employers and among employees. However, a recent amendment to the Labor Code has brought a number of changes to the cooperation with workers under such agreements which employers ought to adequately reflect.
Agreements on work outside the employment relationship are popular in the Czech legal environment both among employers and among employees. However, a recent amendment to the Labor Code has brought a number of changes to the cooperation with workers under such agreements which employers ought to adequately reflect. In particular, it is advisable to adapt the scope and structure of labor-law documents on the employer’s files accordingly. In this article, we will discuss selected legal institutions and concepts which employers should be familiar with if they intend to hire workers on the basis of what is known as the “agreement on the performance of work” or “agreement on the completion of a job” (DPP) or the “agreement on work activities” (DPČ) – often students, temp workers, part-timers; in this article, we shall for convenience refer to them as “DPP/DPČ workers”.
Scheduling of working hours of DPP/DPČ workers
An important novelty in the case of DPP/DPČ arrangements is the obligation to pre-schedule the working hours in a written schedule of working hours and to acquaint the employee with this schedule or any changes to it no later than 3 days before the start of the shift or of the period for which the working hours have been scheduled. As these arrangements are usually used to hire a flexible workforce, scheduling working hours may mean an increased administrative and organizational burden for some employers. In practice, it is therefore advisable to agree with the employee on a different timeframe for acquainting them with the working schedule, e.g., 24 hours ahead of time. This ensures a greater degree of flexibility in shift planning.
Even so, when planning shifts, it is necessary to keep in mind the rules set out in Part Four of the Labor Code on working hours and rest periods, and make sure that the employer provides DPP/DPČ workers with proper breaks for meals and for rest which meet the requirements regarding the period of continuous daily rest and continuous rest within the week, as well as special legislation on night work and stand-by periods. At this point, we also need to note that the employer must record the working hours of an employee working on the basis of a DPP/DPČ arrangement in the same way as they would do for an employee in a regular employment relationship.
Example: The employer entered into an agreement on the performance of work with an employee, based upon which the employee is to provide ad hoc administrative assistance in the office. Subsequently, the (regular) employee who is in charge of running back-office and reception-desk functionalities gets sick. The employer needs someone to fill in for the sick employee in regular employee for as long as they are incapacitated. If the employer learns of that employee’s incapacity on Monday morning at 8:00 a.m. and has agreed with the DPP worker to schedule their work at least 24 hours in advance, then they may only schedule that DPP worker’s hours from Tuesday, 09:00 a.m., onward.
In connection with the scheduling of working hours for DPP/DPČ workers, it also advisable to keep in mind that they, too, are subject to the rules for substitute wages to be paid for national holidays. According to the Labor Code, employees who did not work because a national holiday fell on their usual working day are generally entitled to substitute compensation in the amount of their average earnings (or part thereof) for the salary (or part thereof) which they forfeited as a result of the holiday. If the employer were to schedule the working hours in such a way that the DPP/DPČ workers’ shift falls on a public holiday (and for this reason does not take place), the DPP/DPČ worker would be entitled to substitute pay. Hence, as part of shift planning, it is best for employers not to plan working shifts for DPP/DPČ workers on a holiday.
How do schedule working hours for DPP/DPČ workers?
The Labor Code stipulates that the employer is obliged to draw up a written schedule of working hours. In addition to the classic paper format, e.g. an e-mail message or a document on the intranet may also be considered to fulfill the written form requirement. The actual introduction to the working time schedule does not have to be done in writing. Since the Labor Code contains no explicit rules as to the manner and form of familiarizing the employee with the weekly working hours and changes to the schedule, this matter may be handled according to the employer’s established practice. However, it will ultimately always be the employer who must be able to prove that they acquainted the employee with the schedule of working hours. It is therefore advisable to specify directly in the DPP/DPČ how the employee will be acquainted with the work schedule.
Example: The employer schedules the working hours by creating a weekly shift overview for DPP/DPČ workers. In the agreement on the performance of work, it was agreed with the DPP worker that they would be familiarized with the shift overview in the form of an e-mail. The employer shall thus send the weekly change report to the worker by e-mail. In this way, the employer discharges its obligation to inform the employee of the shift schedule.
Employer’s information duty with respect to the scheduling of working hours
The employer is also obliged, among other things, to comply with the information duty pursuant to Section 77a of the Labor Code vis-a-vis DPP/DPČ workers. This duty includes also information on how working hours will be scheduled in practice at this particular employer. In addition, the employer is obliged to inform the DPP/DPČ workers of the expected range of working hours per day or week, the extent of the minimum continuous daily rest and continuous rest during the week, the provision of breaks for meals and rest, or a reasonable time set aside for rest and meals.
Obviously, the information on the expected scope of working hours per day or week need not necessarily correspond in practice to the actual working schedule. Although the aim of the information duty is, of course, to provide employees with as much information as possible about how future work is to be carried out for the employer, consideration is given to the fact that, in practice, the need to schedule the working hours for the employee differently than planned. Therefore, the employer is not bound by the expected scope of working hours as part of their information duty.
We may add that the employer is obliged to comply with the information duty within 7 days of the actual commencement of the work on the basis of the DPP/DPČ arrangement.
The right of DPP/DPČ workers to vacation
A significant change brought about by the amendment to the Labor Code is the introduction of a vacation entitlement for DPP/DPČ workers if the following conditions are met: (i) continuous duration of the agreement for four weeks (i.e., 28 consecutive calendar days) and (ii) having worked at least 80 hours during the calendar year, provided that weekly working hours were set at a notional 20 hours per week. As for the first condition, it is of no concern whether the employee actually worked, but merely whether the agreement was concluded and was not terminated for the above-mentioned period. If these conditions are met, then DPP/DPČ workers are entitled to vacation of approximately 1.5 hours for every 20 hours worked.
The claim for vacation is calculated according to the following formula: Number of full hours worked within the notional weekly working hours / 52 × 20 × vacation entitlement, with the result rounded up to full hours. Whether or not a claim to vacation arises (subject to both of the above conditions being fulfilled) shall be assessed separately for each calendar year and for each employment relationship. If an employee has several agreements, then the vacation entitlement is calculated separately for each agreement. If the employee ends the employment relationship and does not take the leave to which they have been entitled for the duration of the agreement, a cash compensation must be paid. It should be added that substitute working hours during which the employee actually performed no work whatsoever (e.g. because they took leave or because of obstacles to work) counts toward the hours worked for the purposes of calculating vacation, alongside the actual hours worked.
Vacation entitlement
The statutory vacation entitlement under the Labor Code is at least 4 weeks per calendar year, both for employees in regular employment and DPP/DPČ workers. The only difference compared to the legal regulation of leave for employees in regular employment is the setting of a notional weekly working time for DPP/DPČ workers, at 20 hours per week, according to which the holiday is calculated. It follows from this that the terms for becoming entitled to take vacation are similar for DPP/DPČ workers and regular employees.
Since the statutory conditions for vacation are the same for DPP/DPČ workers, the question arises whether it is possible to introduce a different allotment of vacation for DPP/DPČ workers compared to regular employees. Many employers already provide their employees with extra benefits in the form of an additional week of leave. However, the entitlement to vacation increases the wage costs for employers, and therefore the employer may be interested in limiting the amount of leave for DPP/DPČ workers.
Although such an approach is not downright unlawful, there should be an objective and justifiable reason to set a different vacation allotment for employees and for DPP/DPČ workers. This view is promoted e.g. by the Ministry of Labor and Social Affairs, with which we filed an enquiry. According to the Ministry, the distinction between employees in terms of the length of their annual leave cannot be made by the employer solely based upon whether they are DPP/DPČ workers or regular employees. However, a relevant reason for distinguishing the amount of leave could be e.g. the scope of the employment (e.g. full-time or part-time, etc.), different working conditions, whether the given job is worked on shifts or not, etc.
Taking vacation
The same rules regarding the taking of vacation apply to DPP/DPČ workers and to regular employees. The duration of the holiday is determined by the employer, who is obliged to notify the employee in writing at least 14 days in advance, unless they agree with the employee on a shorter notice period. It is also the responsibility of the employer to ensure that the DPP/DPČ worker exhausts their vacation entitlement within the given calendar year in which the claim for vacation originated.
Example: The employer employs both regular employees and DPP/DPČ workers. The employer is interested in providing employees who work at least part-time a benefit in the form of one extra week of leave. Therefore, they set an objective criterion of 0.5 FTE for the distinction between various vacation allotments which applies to all employees, whether they work under a regular contract or under a DPP/DPČ.
Chaining of DPP/DPČ and vacation
The amendment to the Labor Code is aimed to bring the working conditions of regular employees into greater alignment with those of DPP/DPČ workers. Consequently, some employers may ask whether it is still possible to repeatedly conclude new DPP/DPČ with the same person even after the amendment to the Labor Code. While for employees in regular employment, the duration of a fixed-term employment relationship between the same contracting parties is limited and may not exceed 3 years, with no more than two repeats after the date of the first fixed-term employment relationship, there are no such limits in the Labor Code for DPP/DPČ workers. Therefore, the repeated conclusion of DPP/DPČ arrangements is not prohibited, and they thus do remain a flexible tool for hiring additional workforce if any when needed. The only legal restriction is the obligation for both DPP and DPČ to indicate the period for which the agreement is being concluded.
In practice, employers often conclude a chain of such agreements with employees. The question arises, therefore, how vacation works in such cases. In the event that such agreements of a worker with the same employer will follow each other immediately (whether DPP and DPP, or DPP and DPČ, or DPČ and DPČ), the claim to vacation will be calculated based on the thus chained agreements (applying Sec. 216 (1) of the Labor Code). These legal relationships are thus being treated as one. In these cases, there will be no situation in which employees would have to be paid a compensation for untaken vacation.
Conclusion
DPP/DPČ arrangements are a popular and frequently used tool in the Czech context. Time will tell whether the amendment to the Labor Code will result in a less frequent use of such agreements. However, where employers have hired DPP/DPČ workers, they should keep in mind that the obligations toward them have been brought closer to those vis-a-vis regular employees. This is just one reason why employers should adjust their employment documentation accordingly, set rules for recording working hours, and establish a process for scheduling working hours.
Source:
cf. Sec. 348 (1) of the Labor Code in conjunction with Sec. 216 (2) and (3) of the Labor Code
cf. Sec. 75 (3) and Sec. 76 (3) and (4) of the Labor Code