Unions criticise government decision to defer new Labour Code

The new government of the Czech Republic intends to put before the Chamber of Deputies a proposal to defer entry of the Labour Code into force by one year. The trade unions, which previously threatened to ‘use all means possible’ to prevent any change or annulment of the new Labour Code, consider that this government decision will disrupt the social dialogue. In contrast, employer organisations would welcome a deferral of the Code.

The new Labour Code – the fundamental, universally binding labour legislation in the Czech Republic – was enacted by the Czech parliament on 21 April 2006; according to the previous government’s proposal, it will come into force on 1 January 2007. The new code, which replaced a frequently amended act from 1965, was pushed through by left-wing parliamentary parties despite its rejection by the Czech President, Václav Klaus, and was supported by a substantial majority of trade unions (CZ0605029I, CZ0511101F).

Opposition by employers

From the start, right-wing political parties strongly opposed the approved wording of the act and employers rejected it. The results of an extensive survey conducted by the Chamber of Commerce (Hospodárská komora CR) of the Czech Republic reveal that the majority of employers either entirely reject the new Labour Code or demand its revision. Some two thirds of employers surveyed expect that the new Labour Code will lead to increased unemployment. Moreover, employers are concerned about the increased influence of the trade unions, boosted, in their opinion, by the new law.

At the start of October 2006, the Chamber of Commerce lodged a complaint with the Constitutional Court (Ústavní soud CR) against certain provisions of the Labour Code, which it believes give trade union organisations the right to interfere in the management of companies. For example, trade unions should not, according to the Chamber of Commerce, have the authority to forbid night work and overtime, which should remain within the competence of state authorities where necessary. Moreover, the duty of employers to issue internal regulations solely with the prior consent of the representative trade union allegedly puts companies without unions at an advantage and thus establishes inequality among enterprises.

Code contradictory with other legal provisions

During the summer of 2006, a new government took office, led by Mirek Topolánek of the Civic Democrats (Obcanská demokratická strana, ODS) (CZ0607019I). According to an analysis by the Ministry of Labour and Social Affairs of the Czech Republic (Ministerstvo práce a sociálních vecí CR, MPSV CR), the new code may be in conflict with the Czech constitution in the following four areas:

• the abovementioned trade union authorisation to prohibit night work and overtime that would jeopardise employees’ safety and health;

• the need to obtain the unions’ prior consent before issuing internal regulations;

• the conclusion of collective agreements on behalf of all employees, which means without the consent of employees who are not union members;

• the possibility of concluding a collective agreement under certain circumstances with the largest trade union organisation operating in a company.

According to MPSV CR, the new code also contains a series of provisions that contradict other binding legislation. According to the new Minister for Labour and Social Affairs, Petr Necas, existing legislative analyses show that at least 60 points in the Labour Code and 14 other related acts have to be amended in order to eliminate serious imbalances. For this reason, the government considers that a one-year deferral of the Labour Code’s entry into force should provide the time required to do this.

Changes to be discussed in tripartite forum

MPSV CR has passed on the findings of its analysis to the government’s Legislative Council (Legislativní rada vlády) for appraisal; the Council is then expected to make recommendations for further procedures. After this process, Minister Necas intends to start discussing possible changes to the law with employer and trade union representatives in the Council of Economic and Social Agreement (Rada hospodárské a sociální dohody, RHSD), which is the national tripartite forum (CZ0503102F).

Trade union reaction

The Czech Metalworkers’ Federation (Odborový svaz KOVO), the largest trade union in the Czech Republic, has issued an opinion on the government’s and employers’ attempt to defer the implementation of the new Labour Code. Odborový svaz KOVO does not agree with the government’s decision to postpone introduction of the legislation: the union regards this intention as an attempt to weaken the position of employees and their representatives, and believes that the strategy is designed to lead to the future potential dissolution of the code.

The largest trade union federation in the country, the Czech-Moravian Confederation of Trade Unions (Ceskomoravská konfederace odborových svazu, CMKOS), also sharply criticised the government’s intention, and released a public statement on the matter. According to CMKOS, the government’s plan is to degrade weaken dialogue and to use self-serving objections to scrap the Labour Code altogether. CMKOS rejects the view that the code is unconstitutional; it considers that the quality of the new legislation corresponds to the general standard. At present, the confederation is preparing to apply the code in practice and is counting on it entering into force in January 2007.

Jaroslav Hála, Research Institute for Labour and Social Affairs