Stricter conditions for agency employment
The long-in-preparation amendment to labour laws that changes the agency employment conditions has successfully passed through the legislative process. Employment agencies and users of agency employees have to get ready for new duties. On the other hand, both will surely appreciate the deregulation of agency employment of foreigners. Legislators are also clamping down on the bypassing of applicable regulations, as the amendment introduces the new offence of ‘concealed agency employment’. The amendment will enter into effect 15 days after its promulgation in the Collection of Laws.
The original plan to set quotas for the number of agency employees or to ban their multiple subsequent fixed-term employments was eventually not put through by the labour minister. Yet, the conditions for agency employment will still get stricter: agencies will have to prove their financial qualification through a security deposit of CZK 500 thousand before even starting their activity; will also be stricter for persons acting as the agencies’ ‘appointed representatives’.
To prevent bypassing the current regulation of overtime work and breaks, the amendment prohibits assigning agency employees to a user who at the same time will employ them as permanent employees or to a user to whom they have been assigned by another agency in the same month. For any breach of the ban, both the agency and the user of the agency employees will face a penalty of up to CZK 1 million.
The amendment also introduces a penalty for users of agency employees if the agency employees do not receive the same remuneration as comparable permanent employees of the user. So far, the penalty only concerned the agencies. They objected that when setting the agency employees’ remuneration, they depend on information obtained from the users, which is frequently false or incomplete. Under the new regulation, such users’ behaviour will be subject to a penalty of up to CZK 1 million.
Another novelty, only added to the bill during its discussion in the parliament, is the ‘concealed agency employment’ offence – legislators responded to the increasingly widespread practice where agencies bypass the rather strict regulation of agency employment by passing the provision of their employees off as a cooperation under a contract for work, whereas the actual subject matter of the contract is not the delivery of complete work, but the provision of labour for consideration. The threat of a penalty of up to CZK 10 million should limit this practice.
A substantial and positive change for employers in need of labour is the abolishment of the ban of agency employment of foreigners needing an employment permit to carry out work in the Czech Republic. The regulation was meant to protect the Czech job market but has proven to be unnecessarily harsh under current circumstances. The ban was in fact one of the reasons for the boom of concealed agency employment.