The Ministry of Labour and Social Affairs has presented ‘kurzarbeit’

At the end of August, the Ministry of Labour and Social Affairs published a draft amendment to the Employment Act introducing into Czech law the long-awaited support during partial unemployment, commonly called ‘kurzarbeit’. Kurzarbeit is to replace the present Antivirus support programme and will take over some of its features and procedures. The ministry is thus responding to the current regulation of the contribution during partial employment contained in the Employment Act proving rather hard to access during the pandemic, mainly because of the necessity for every application to be approved by the government, and also due to a low level of support granted.

The kurzarbeit system should be activated whenever one of the following occurs:

  • A steep increase in unemployment in a relevant period; i.e. the number of job applicants increases by more than 15% year-on-year in three successive calendar months and, at the same time, their total number reaches at least 400,000.
  • A governmental regulation issued in extraordinary emergency situations similar to the present pandemic, but also in natural disasters, cyberattacks or other emergencies considered a force majeure and posing a serious threat to the state economy; by the regulation, the government shall set the period for the provision of kurzarbeit, while it may also limit the support to certain sectors of the economy or to employers in specific regions.

Like Antivirus (for more information about the Antivirus programme, read here), kurzarbeit aims to support employment during emergency situations when employers have to partly curtail their operations. Upon a written application filed by an employer, the Labour Office would provide financial support to employees whose employment has lasted at least three months at the date of filing the application. The amount of the support is proposed at 60 to 80% of the average hourly net earnings, depending on the employee’s activity and time spent in kurzarbeit. The maximum support amount is proposed at 1.5 times the average wage in the national economy for the first to the third quarter of the prior calendar year.

The maximum period of support should be 9 months. After its elapse, the employer may again apply for a contribution for the same employee no earlier than after three years, unless support is applied for on different grounds.

The Antivirus programme did not clearly stipulate whether support can also be obtained for employees working in an ‘account of working hours’ regime. The proposed kurzarbeit system is unambiguous in this respect: such employees, as well as employees receiving sickness benefits, maternity leave, paternity leave, carer’s allowance, long-term carer’s allowance or wage compensation for the first 14 calendar days of inability to work, are not entitled to this type of support.

Entitlement to kurzarbeit support shall arise for employees who cannot carry out their work due to an obstacle on the employer’s part consisting in downtime or stoppages due to adverse weather conditions, other impediments to work on the employer’s part, or partial unemployment. The impediment to work must occur in direct relation to one of the above given reasons/grounds for activating the support, and, as a result of the impediment, the employer must be unable to assign work to employees in the extent of at least 20% and at most 60% of their weekly working hours. This condition shall be assessed in aggregate for all employees of the employer. At the same time, the employee’s weekly working hours during the support period must be at least 40% of their stipulated weekly working hours as per the Labour Code.

Until the end of October at least, jobs will continue to be protected by the Antivirus programme. Whether, and in what form, it will then be converted into kurzarbeit will depend on the course of the legislative process, currently only in its initial stage. In Update’s October issue, we will summarise for you the proposed rules for applying for support under kurzarbeit, and the applicable support payment rules.

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