The proposed new Labour Code, which is currently going through the legislative process, continues to be the subject of extensive debate. Although the code has been passed by the Chamber of Deputies, it has been rejected by the Czech President. It has also encountered conflicting responses from political parties, trade unions and employers.
Political reactions
On 10 May 2006, the Czech President, Václav Klaus, rejected the adoption of the new Labour Code. According to the President, the current form of the Labour Code, as passed by the Chamber of Deputies (Poslanecká snemovna Parlamentu CR), does not represent the required legislation for modern industrial relations in the Czech Republic. In particular, it does not provide for the liberalisation of employment rights and will not guarantee the necessary changes in this field.
The political right-wing parties, including the Christian Democrats (Krestanská a demokratická unie – Ceskoslovenská strana lidová, KDU-CSL) and the Union of Freedom – Democratic Union (Unie svobody – Demokratické unie, US-DEU) – which have a majority in the Senate (Senát Parlamentu CR) though not in the Chamber of Deputies – are also opposed to the code in its current form. In their opinion, it hinders initiatives and freedom for employees and could restrict the competitiveness of the Czech economy.
In contrast, the Czech Social Democratic Party (Ceská strana sociálne demokratická, CSSD) and the Communist Party of Bohemia and Moravia (Komunistická strana Cech a Moravy, KSCM) have repeatedly argued that the employee is in a weaker position in industrial relations and must be protected through legislation. The Ministry of Labour and Social Affairs (Ministerstvo práce a sociálních vecí CR, MPSV), which drafted the code, affirms that the proposed legislation will lead to increased liberalisation in the industrial relations sphere and is more economically based than the existing legislation.
Views of trade unions and employers
The trade unions and the employers also have mixed opinions in relation to the new Labour Code; indeed, there are conflicting views among the unions.
The largest Czech trade union federation, the Czech-Moravian Confederation of Trade Unions (Ceskomoravská konfederace odborových svazu, CMKOS), was directly involved in drafting the new code and has actively supported the proposed legislation since the outset. Following the presidential ban of the code in May, the Chair of CMKOS, Senator Milan Štech, sent an open letter to President Klaus and to the Czech employers. CMKOS refutes the president’s arguments, insisting that the new Labour Code guarantees employee social protection at the level of other economically developed EU Member States and that it extends contractual freedom for employment and labour contracts. The CMKOS trade unions have declared that they will use all their resources to defend decent working conditions and will not allow the new Labour Code to be overturned by the next parliament.
In contrast, the second largest trade union federation, the Association of Independent Trade Unions (Asociace samostatných odboru, ASO) – which represents the smaller and mainly profession-based member unions – has been largely critical of the draft Labour Code. It argues that the proposed provisions will limit the possibilities for smaller trade unions to present their views in collective bargaining with employers. The association underlines how the draft legislation stipulates that, in situations where more than one trade union is represented in a company, the opinion of the largest union will prevail in bargaining if there is no mutual agreement between the representative unions; this is not the case under the current legislation.
The employer organisations are largely opposed to the new Labour Code and have expressed specific objections to particular aspects of the proposed legislation. For example, according to the largest employer organisation, the Confederation of Industry of the Czech Republic (Svaz prumyslu a dopravy CR, SP CR), employers’ requirements were not taken into consideration when drafting the bill. These requirements include the need to reduce the administrative demands on employers, and the need for greater flexibility in employment termination so that employers can react more rapidly to changes in market conditions in terms of the status and number of employees. In this regard, they consider the draft Labour Code as being even more restrictive than the existing legislation. Furthermore, they feel that there has been a considerable strengthening of the position of the unions, and are particularly critical of certain union rights in relation to health and safety in the workplace.
Commentary
The debate surrounding the new Labour Code looks set to continue, even after the Chamber of Deputies was due to convene in June 2006 before the forthcoming elections, when it would probably make a final decision on the code. Considering the division of power in the Chamber, it is expected that the new employment legislation will be passed. In this event, the proposed bill should come into effect at the start of 2007.
Jaroslav Hála, Research Institute for Labour and Social Affairs