How did the Labour Inspection Office sanction employers in 2019?

The State Labour Inspection Office (SLIO) has published its inspection report for 2019. What were the outcomes of its inspections focusing on agency employment, illegal employment, concealed employment mediation and employee monitoring?

The highest penalties were imposed by the SLIO in connection with illegal employment, i.e. allowing the performance of work by a foreign national without having the appropriate permits or the performance of dependent work outside employment relationship (the so-called ‘Svarc’ system). Delicts were quite frequent as a result of a considerable shortage of labour, which many times led employers to hire personnel from abroad, especially from countries outside the EU. When employing foreigners, it is necessary to adhere to legislation regulating both labour-law relationships and residence of foreign nationals in the CR.

In 2019, the SLIO carried out a total of 8,160 inspections focusing on illegal employment. The most frequently identified foreigners were citizens of Ukraine, Moldavia and Vietnam, especially working for employers operating in construction, wholesale, retail, manufacturing, and the food and accommodation services segments. When identifying illegal employment, the SLIO cooperated with other administrative bodies such as Labour Offices, the Czech Social Security Administration and with armed forces such as the Police of the CR, the Czech Alien Police, and the Customs Administration. A total of 485 penalties were imposed for allowing illegal employment, totalling CZK 182,991,500.

Inspections were also carried out to examine agency employment, the SLIO’s traditional priority. In 2019, the office mainly focused on examining the validity of permits to perform a relevant form of mediation activities and on the content of agreements on temporary assignments and adherence to comparable working and payroll conditions for agency employees. The most frequent violation was employment agencies not providing temporarily-assigned employees with working and payroll conditions equal to those of comparable employees. A total of 59 penalties amounting to CZK 3,558,500 were imposed by the SLIO on the employment agencies for the violation of agency employment regulations, and a total of nine fines, amounting to CZK 230,000, were levied on the users of agency employees.

Concealed mediation of employment was mainly identified at entities which for various reasons did not have a permit to perform a relevant form of employment mediation activities but which nevertheless acted as employment agencies. The SLIO identified instances in which personnel working for several employers was working at one workplace, some of them working there based on an alleged contract for the provision of services but in fact performing their work based on the instructions of a person other than their legal employer. The inspection of such a workplace then usually led to a number of other inspections involving several other entities. To untangle the chain of relations involving many times three and more entities was often an uneasy task for the SLIO. In 2019, the SLIO imposed a total of 69 penalties for the concealed mediation of employment, amounting to CZK 34,768,000.

The SLIO’s inspections also focused on the open or hidden monitoring of employees via CCTVs and on the monitoring of telephone calls, emails and post, and on the monitoring of employees’ locations via GPS locator systems. According to the SLIO, the number of installed camera systems has been growing continuously, especially due to the development of modern technologies and the affordability of such equipment. As the reason for the invasion of the privacy of their employees, employers most often pointed to the protection of their property and the health of their employees. The SLIO mainly focused on entities from manufacturing, food and accommodation services, provision of services, and sales outlet operations. The SLIO imposed a total of 10 penalties in the aggregate amount of CZK 267,000. The number of imposed penalties tripled compared with the previous year.

The penalties imposed for the above violations were relatively high. We therefore recommend performing regular checks of whether all relevant labour-law obligations are being met, as these may change over time (see, e.g., the recently approved extensive amendment to the Labour Code). Any uncertainty in this matter should be consulted with professionals.

 

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