Czech Republic: The latest amendment to the Employment Act adds a new instrument to the tool-box of proactive government employment policy: an allowance to be paid during forced partial unemployment.
A rather important part of the changes brought about by the amendment to the Employment Act coming into force on 1 October 2015 is the introduction of a new tool of active employment policy: a partially government-funded allowance during times of partial unemployment – known as kurzarbeit (Sec. 115).
The allowance during periods of partial unemployment is meant for employers who experience an obstacle to work for the reason set out in Sec. 209 (1) of the Labor Code (partial unemployment) or for the reason set out in Sec. 207 (b) of the Labor Code (interruption of work due to inclement weather conditions or a natural catastrophe). For the duration of the crisis, the affected employees would draw substitute pay in the amount of 70% of their average earnings, 50% to be covered by the employer and 20% to be covered by a state subsidy.
The government allowance will be paid out through the Labor Office, based on an application which must specify the reasons for kurzarbeit, the number of employees who will be affected by partial unemployment, the prospects for overcoming the critical situation, and an undertaking that the employer will refrain from layoffs. These applications will supposedly be heard by the government on a case-by-case basis. The subsidy will be granted for as long as the obstacle to work persists, for a period of no more than 6 months (but with an option for extending the kurzarbeit allowance by another 6-month period). In justified cases, the government may pass a decree in which it stipulates an even longer time period for which the allowance will be granted.
The rationale behind the government subsidy is that it supposedly allows employers to bridge crisis situations during which they are unable to assign work to their employees in the scope anticipated by their employment contracts, and thus prevent their outright dismissal. One debatable aspect of the new institution is whether it will be flexible enough for real-life needs and purposes, given that each and every individual application for the allowance will require a decision on the cabinet level.
Source: Amendment to the Employment Act (Act No. 435/2004 Coll.) Labor Code (Act No. 262/2006 Coll.) www.epravo.cz