Supreme Court: landmark decision on termination of employment of foreigners
Czech legislation sets strict conditions for the employment of foreigners, especially from non-EU countries. Failure to comply with these conditions may result in fines of up to CZK 10 million and other negative consequences. Nonetheless, this legislation area is not consistent and until recently failed to provide clear guidelines on the termination of employment relationships of foreigners deriving their right to work in the Czech Republic from the exemption for students continuously preparing for a future profession pursuant to the Employment Act. This fundamental gap in the law was clarified by a recent Supreme Court ruling.
Background
The court dealt with the situation of a Turkish national who was a full-time student at a university in the Czech Republic. Under this status, he was not required to have a special work permit and had free access to the labour market under the Employment Act. While employed, he suffered a severe head injury and was in a coma for three years. After waking up, he was left in the highest degree of disability. Due to his accident, his studies at the university were interrupted, which meant that as a foreigner he had lost free access to the labour market and no longer met the conditions for being employed in the Czech Republic. His employer informed him that by losing the exemption from the obligation to have a work permit, his employment had terminated by operation of law and that it therefore was not necessary to take any terminating action.
The employee's representative disagreed and took the matter to court, arguing that the Labour Code only stipulates that employment terminates if an employment permit ceases to be valid, and does not explicitly mention the loss of free access to the labour market as leading to termination.
When does a foreigner's employment terminate?
Both the lower courts and the Supreme Court unanimously concluded that the purpose of legislation is to prevent employment relationships from continuing if the legal prerequisites for employment of a foreigner are no longer met. Thus, employment also terminates by operation of law when free access to the labour market is lost, although the Labour Code does not explicitly state this. Only this conclusion allows for the effective protection of the employer – had the employment of the foreigner without an employment permit continued after their loss of free access to the labour market, the employer would have committed the offence of facilitating illegal work. At the same time, the employer would have had no way of terminating the employment unilaterally.
Practical implications for employers
Cases where (employed) foreigners quit or interrupt their studies are rather common in practice. Their employers could not be certain whether to consider the employment terminated without further ado or whether to address the situation by terminating the employment by agreement or by notice, trying to subsume it under one of the grounds for termination by notice. Some employers even addressed the situation by ordering the foreigner to not perform work on the grounds of impediments to work until they again could meet the conditions for employment.
The court has thus resolved a controversial issue that has resonated with the professional public for a long time: upon the loss of free access to the labour market, employment terminates without further ado, and the employee cannot be ordered to not perform work on the grounds of impediments to work. If the foreigner subsequently obtains a work permit or resumes meeting the conditions that give them free access to the labour market again, it will be necessary to conclude a new employment contract.