Is the new manner of calculation of vacation in the Czech Republic really more equitable?

A much-awaited amendment to the Labor Code has changed the rules governing the vacation of employees. The main objective of the lawmaker was to ensure a fairer way of calculating vacation, and fairer terms for taking vacation. What are the new rules that will apply come January?

Summer, and thus the high season for holidays, is behind us, but many of us are eager to get another opportunity to travel and relax, given the very specific situation caused by the coronavirus pandemic.

Among the substantive changes included in the most recent amendment to the Labor Code, the new concept of employee vacation is rather significant. Calculating the entitlement to vacation was supposed to become easier and above all more precise, and the new terms are supposed to ensure equality for all employees as they take vacation, depending on like-for-like weekly working hours, rather than on the way in which these working hours are allocated to work shifts.

The current way in which vacation is calculated based upon days worked indeed need not be entirely fair in certain aspects, given that two employees who are expected to work the same number of hours in a given year may, as a consequence of the per-diem conversion, end up with a dissimilar amount of vacation – e.g. because one of them would be working a longer shift (of, say, 12 hours) than the other (at six hours) on the day on which they take vacation. That’s a huge difference, both for the employee and the employer.

The new vacation concept, slated to take effect as of January 2021, leaves the basic minimum allotment of four weeks untouched. The calculation of the employee’s vacation entitlement, however, will no longer be based on days worked, but on the weekly working hours, from which the length of vacation will be derived. Taking vacation, in turn, will be tied to a given number of hours, irrespective of the actual weekly working schedule. The number of hours of annual vacation will reflect the number of hours actually worked by the employee.

This change of the time unit for calculating vacation, to planned and worked hours, means that „vacation for days worked” as a concept ceases to exist. From January onward, vacation will merely be categorized as vacation per calendar year (or a prorated part thereof), and supplementary vacation („extra vacation”). The claim to vacation per calendar year arises for employees who, during the existence of their employment with one and the same employer, worked the statutory number of weekly working hours (or, as the case may be, a contractually agreed smaller number of weekly working hours) for such employer in the course of the 52 weeks in a calendar year, as is attributable to each of those 52 weeks on average (say, 40 hours per week). The duration of vacation per calendar year then corresponds to the duration of the individual employee’s weekly working hours, multiplied by the number of weeks of the vacation allotment.

Let’s have a look at a practical example: an employee who works 40 hours per week and who is entitled to four weeks of vacation will be entitled to 160 hours of annual vacation (40 hours x 4 weeks).

Employees who don’t become entitled to vacation for the full calendar year will be entitled to a prorated portion of the vacation per calendar year, provided that they worked at least four weeks in the scope of the statutory (or contractually agreed shorter) weekly working hours for the same employer and within the same employment relationship. For each duly worked increment of their full weekly working hours, employees are entitled to 1/52 of the vacation per calendar year.

An important part of the new concept for calculating vacation based on hours instead of days are the changes concerning the curtailment of vacation. Today, employers may take away vacation from employees for absence without leave and for long-term obstacles to work. In the future, they may only do so in the case of absences without leave, and then only up to the number of hours actually missed. As for obstacles to work, they either do or do not count against the number of hours worked within the weekly working hours, and thus ultimately have influence on the total amount of vacation.

In our view, the new vacation concept is a change for the better, and is likely to contribute to a more balanced compromise between the legitimate interests of employees and employers. Even so, it undeniably represents a major interference with previous HR/personal policy. Because of this, it is advisable that employers prepare themselves early and thoroughly, in particular by updating their personnel systems and by making the new method of calculating vacation their own.

Labor Code (Act No. 262/2006 Coll., as most recently amended by Act No. 285/2020 Coll.)

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