SAC’s strict view on ‘Svarc’ system in Rohlik.cz case
The Supreme Administrative Court (SAC) has ruled that the couriers of online supermarket Rohlik.cz had been illegally working under the ‘Svarc’ system. It thus confirmed the decision of the lower courts, and the company must pay a fine of CZK 2.5 million. The decision is also significant with respect to the new government’s declaration of its intention to tighten controls on illegal work.
The SAC dealt with the question of whether couriers performed their work as self-employed persons (in Czech OSVČ) or whether they in fact performed dependent work that should have been covered by an employment relationship. Rohlik.cz defended itself against the fine by arguing that its cooperation with the couriers did not show the characteristics of dependent work.
The company argued that the couriers were not required to perform the work in person, did not perform it on a regular basis and on behalf of the company, according to its instructions, or in a subordinate position. The SAC disagreed with these assertions, pointing out, among other things, that the couriers used company resources, such as cars marked with the company logo, and communicated with customers on behalf of the company.
Another important aspect mentioned by the SAC was that the couriers were economically dependent on the company. The SAC concluded this based on the finding that the couriers' income from this activity constituted a substantial part of their livelihood. The SAC also pointed to the system of planning and monitoring the couriers' work, which, in its opinion, indicates the couriers' subordination to the company.
Rohlik.cz further argued that digital platforms function differently and have different relationships with suppliers. The SAC did not accept this reasoning either. On the contrary, it drew attention to already valid Directive 2024/2831 of the European Parliament and of the Council on improving working conditions for platform workers, which is to be implemented into Czech law by December 2026. Among other things, the SAC pointed out that the rules contained in this directive are in fact stricter for employers than the domestic rules.
The content of the work matters, not its designation
The SAC's decision thus confirms that the formal designation of a contractual relationship cannot obscure its actual content. If the performance of work meets the characteristics of dependent work, an employment relationship must be established. This is true even in a situation where both parties agree that their cooperation should be based on commercial law. For employers, this means that they must carefully analyse the terms of their cooperation with self-employed persons.
The issue of the ‘Svarc’ system is becoming increasingly topical. Let us recall the statement by the incoming Minister of Finance that the fight against the grey economy and illegal work will be a key priority for the ministry in the coming years. The ministry plans to set up a specialised team to combat illegal work. This team is to cooperate extensively with the financial administration, customs and labour inspectorates and focus on systematic checks and detection of illegal practices in the labour market.
It is therefore high time to thoroughly review contractual relationships with external suppliers and related internal processes. If you have any questions, please do not hesitate to contact us.