5 June 2018

Labour Inspection’s statistics: breaches of Labour Code not worthwhile

The State Labour Inspection Office conducted nearly 25 thousand inspections and collected over CZK 218 million in fines in the past year, according to the published results of inspections of compliance with labour-law regulations. Inspectors mainly focused on agency employment, the illegal employment of foreigners, ‘Svarc’ systems, and occupational safety and health protection. The statistics also confirm a recent trend: the majority of inspections are triggered by complaints.

Iva Baranová
Barbora Bezděková

Agency employment has been under the Labour Inspection’s scrutiny for some time. The current rather strict regulation makes prohibited practices look tempting, despite the sanctions amounting to millions. The Labour Inspection conducts regular checks as well as large-scale unscheduled inspections. Nearly one in five inspections ends in a fine, while the ‘evergreen’ offence is the failure to pay the same remuneration to agency employees working for a company as is received by the company’s own employees. Companies may also get into trouble if they fail to provide the agency with accurate information on their employees’ remuneration. Apart from common agency employment, the Labour Inspection also looks into concealed agency employment, whereby a company not licenced as an employment agency seemingly delivers services or work, but in effect just rents staff to the customer. The Labour Inspection plans to continue in its focus on agency employment this year as well.

Another area frequently inspected is illegal employment, in particular employment of foreigners without a permit, and the ‘Svarc’ system. When inspecting the legality of work carried out by foreigners in the Czech Republic, the Labour Inspection cooperates with the police, checking whether foreigners have valid residency and work permits corresponding to the scope of work contracted. Last year, over two thousand illegal foreign workers were detected by random checks and large-scale inspection projects. And it is not just the foreigners facing the penalty, but also their employers and companies for whom they work, even on a temporary basis – whether posted there by a contractor or by a parent company. The Labour Inspection also detected nearly eight hundred instances of ‘Svarc’ systems. For both mentioned forms of illegal work, the penalty for allowing its performance is up to ten million crowns.

A substantial portion of detected offences involved breaches of general labour-law regulations. Inspections focused on compliance with occupational safety and health rules, obligations in concluding and terminating employment contracts, and regulations on remuneration and working hours. If an offence is detected, it can hurt the company in a number of ways: apart from a severe fine, the company may be prevented from drawing subsidies or obtaining work permits for its employees. Employers should also note that more than one quarter of the inspections were initiated upon complaints, which could have been lodged by almost anyone, even a dishonest competitor or a disgruntled employee. We can but recommend that companies devote increased attention to ensuring compliance with applicable labour-law regulations.

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