Compensation for work accidents in light of amendment to Labour Code

Effective 1 January 2021, an amendment to the Labour Code changed the rules of compensation for accidents at work and occupational diseases, introducing a one-time compensation to close persons for non-material damage in the event of particularly serious bodily harm coming to employees, and significantly increasing certain compensations due to survivors in the event an employee’s death.

Particularly serious bodily harm

A one-time compensation for non-material damage in the event of a particularly serious injury to an employee's health is being introduced to the Labour Code as an entirely new concept. So far, this type of compensation has been regulated by the Civil Code, and the amendment to the Labour Code thus eliminates the differences between the two regulations. According to the explanatory report, this compensation shall only be provided on an exceptional basis, in cases involving the most severe injury to health such as comatose conditions, severe brain damage or extensive paralysis: these involve consequences comparable to death, and the sadness, fear, despair and hopelessness felt by the close persons cause them non-material damage. The compensation shall be due to the spouse, partner, child and parent of an employee who has suffered particularly serious bodily harm, or other persons in a family or similar relationship who experience the employee's harm as their own.

The Labour Code does not specify the amount of such compensation: it should always be determined taking into account the circumstances of the case, while the intensity and quality of the relationship between the employee and the close persons shall be of decisive importance. Should the employee die as a result of particularly serious bodily harm, the compensation already granted shall be taken into account by the court when determining the amount of the one-off compensation for non-material damage due to the survivors.

Death of an employee

The amendment also changes the terminology and significantly increases the amount of one-time compensation to survivors. The term "one-time compensation to survivors" used so far is replaced by "one-time compensation for non-material damage to survivors". This compensation will continue to be payable to the deceased's spouse, partner, child and parent. However, under the new rules, the compensation shall also be payable to other persons in a family or similar relationship who feel the employee's harm as their own. The deceased employees’ children shall be entitled to compensation regardless of whether they are economically dependent or independent. This change is explained by the fact that children's mental hardship arising from the death of a parent shall not be linked to and conditional upon their minority and dependency, but rather to their life-long relationship with the parent. The same applies to the parents' relationship with their children.

The previous regulation set the amount of compensation at a minimum of CZK 240,000. Under the new rules, the compensation shall be at least 20 times the average wage in the national economy for the first to third quarters of the calendar year preceding the calendar year in which the right to the compensation arose. The average wage in the national economy for the first to third quarters of 2020 for the purposes of the Labour Code was CZK 34,611. This means that in 2021, the compensation for non-material damage to survivors will be at least CZK 692,300. This amount shall apply to the spouse, partner, child or parent. As regards other survivors, the compensation shall cover the damage suffered and proven.
The last change concerns the compensation of reasonable costs associated with a funeral, namely the reimbursement of the costs of head- or gravestones in the event of an employee’s death as a result of a work accident or occupational disease.

Before the amendment, compensation was provided in the amount of a minimum of CZK 20,000. Under the amendment, compensation has been set at at least one and a half times the average wage in the national economy for the first to third quarters of the calendar year preceding the calendar year in which the right to such compensation arose. This means that in 2021, compensation will be at least CZK 52,000. The compensation also includes burial charges, cemetery fees, expenses for the modification/treatment of the head- or gravestone, travel expenses and one third of the usual expenses for mourning clothes for close relatives. As under the old rules, reasonable expenses associated with funerals shall be reduced by the funeral allowance granted under a special legal regulation. 

 

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