In October 2005, the Czech parliament started debating a set of amendments to the Labour Code proposed by the government. The reform, which aims to bring the Code up to date, has created a rift within the governing coalition and divided the social partners. Trade unions support the changes while employers oppose many of the amendments and complain that their comments have not been taken into account.
The Labour Code, Act No. 65/1965, is one of the longest-serving pieces of legislation in the Czech Republic, dating from 1965. It was created in completely different social conditions and, although it has been amended numerous times (with 46 amendments passed to date), there is broad agreement that it is conceptually obsolete; for some time it has been unsuited to practical needs and it has stopped being clear and comprehensible to users.
Draft amendment of the Labour Code
The government started discussing a bill to amend the Labour Code at the start of September 2005, after around a year of preparations. A draft was drawn up by the Ministry of Labour and Social Affairs of the Czech Republic (Ministerstvo práce a sociálních věcí ČR, MPSV ČR) and put before the Chamber of Deputies (Parlament České republiky, Poslanecká sněmovna) on 27 September 2005. It is proposed to enter into force on 1 July 2006.
When working on the bill, the Ministry offered trade unions and employers the chance to cooperate - but only the trade unions took up the offer. According to a statement made by the minister for labour and social affairs to the Právo newspaper on 21 September, employers rejected the new legislation right from the start, but did supply comments, some of which were taken into consideration. By contrast, on 22 September the managing director of the Confederation of Industry of the Czech Republic (Svaz průmyslu a dopravy ČR, SP ČR) stated in the Lidové noviny newspaper that the authors of the bill failed to take on board more than 700 objections to the legislative intention of the act and 2,000 comments on the bill itself.
According to its authors, the new Labour Code as a whole reflects the needs of the market economy and puts in place the right conditions for restricting the current enforced uniform treatment of employees. If the principle of equal treatment is not violated, an employer may have different employment relations with different employees.
Based on the employers’ demands, the Ministry incorporated into the draft amendment of the Code a new 'working hours account' scheme, which will be applicable even in enterprises where there are no trade unions. This new provision will make it possible to adjust employees’ weekly working hours, when this is necessary to react to changing needs for labour depending on shifting demand, while keeping pay constant. Other changes include that: employment contracts must be concluded in writing; employers will in future be able - if they so agree in a collective agreement - to apply an 'internal regulation' in enterprises in which trade unions operate; the formalities - eg on providing information to the authorities - applying to small enterprises with up to 10 employees will be simplified; and all employees will have a statutory right to a 'minimal social standard' (eg the right to a basic holiday allowance or to severance pay when the employer terminates their employment).
Disputes
The debate over the bill has escalated conflicts between left and right in the coalition government. The Czech Social Democratic Party (Česká strana sociálně demokratická, ČSSD) intends to rely on the votes of the opposition Communist Party of Bohemia and Moravia (Komunistická strana Čech a Moravy, KSČM) MPs in the Chamber of Deputies to push the legislation through. Another coalition party, the Christian and Democratic Union-Czechoslovak People's Party (Křesťanská a demokratická unie-Čs strana lidová, KDU-ČSL), made consent to the bill by its ministers and MPs conditional on the omission of a provision on trade union control and decision-making powers, which the KDU-ČSL believes is not related to the protection of all employees but rather to ensuring that trade union officials have influence. Prime Minister Jiří Paroubek (of the ČSSD) rejected this condition, stating that he would push the draft Labour Code through within the government and then in the Chamber of Deputies with or without help from his coalition partners. The core of the dispute within the coalition is the extent of trade union rights, eg the questions of whether trade union bodies will be able, as they are at present, to act and negotiate collective agreements on behalf of non-members, and whether trade unions will retain their existing powers to stop work on safety grounds etc. As far as the parliamentary opposition parties are concerned, the Civic Democrats (Občanská demokratická strana, ODS) back the employers’ opinion and categorically reject the bill in its entirety; the KSČM, however, has pledged to support the government bill in parliament and thus enable its enactment.
As far as the social partners are concerned, their opinions are sharply opposed. According to the trade unions, never in the history of the Czech Republic has there been such a concerted attack on labour law by employers' organisations, and for that reason public expression of support for the government bill is an essential step for the unions. The country's largest single trade union, the Czech Metalworkers' Federation KOVO (Odborový svaz KOVO, OS KOVO), called for a joint protest action, which was due to be held on 26 November 2005, co-organised by the two largest union centres, the Czech-Moravian Confederation of Trade Unions (Českomoravská konfederace odborových svazů, ČMKOS) and the Association of Independent Trade Unions (Asociace samostatných odborů, ASO).
Employers’ organisations, including the largest, SP ČR, object that their comments were overlooked when the bill was being prepared, and that the bill:
- is not a fundamental reworking of the legislation - quite the reverse, it preserves most of the existing provisions and will therefore complicate rather than simplify labour relations, they argue;
- does not conform to the Czech Republic's Constitution and Charter of Fundamental Rights and Freedoms;
- unilaterally advantages trade unions over employers;
- restricts the flexibility of business decision-making; and
- will make business inordinately more expensive if applied in its current form.
The Syndicate of Businesspeople and Tradespeople of the Czech Republic (Sdružení podnikatelů a živnostníků ČR, SPŽ ČR), argues that the bill, among other unwanted effect, complicates the termination of employment and will thus harm not just employers but ultimately employees too. SPŽ ČR is planning a work stoppage in protest against the new Labour Code.
Commentary
In the Czech Republic, an opinion is gradually taking hold that a more flexible, more liberal labour market is a precondition of a prospering economy. The labour market should respond to the current challenges of globalisation and European integration. The primary condition is the creation of a suitable legal framework for labour and work, ie the enactment of a new Labour Code. The preparation of the Code and ongoing legislative process have taken more than 12 months and have partly overlapped with pre-election wrangling between political parties. The political clash in the government coalition is fuelled by pre-election rhetoric and attempts to stress the differences between parties’ stances.
New, modern, liberal legislation should principally liberalise the contractual freedom of participants in labour relations, which the current rigid Labour Code, based on the principle that 'anything not permitted is prohibited', considerably restricts. The draft amendment of the Labour Code, which the Chamber of Deputies first discussed at its October session, is conceived on the principle of 'anything not prohibited is permitted' and brings a number of changes to the existing legislation, though the Code's discrimination ban remains in place. (Charlotte Kadavá and Jaroslav Hála, Research Institute for Labour and Social Affairs)