Amendments to the Czech Labour Code will impact on non-compete arrangements and fixed term employment contracts (Act No. 46/2004)

The Czech Parliament has recently adopted an amendment to the Czech Labour Code. The amendment is one measure, amongst others, which changes the provisions relating to the treatment of non-competitive clauses in employment contracts and introduces new rules on concluded fixed term employment contracts. The amendment came into legal force on 1 March 2004.

For further details on the above amendment, on how it may influence your relationship with your employees, and other practical implications on your business, please contact Lukáš Janíček on +420 22 109 8833 or at: [email protected]

The major changes introduced by the amendment to the Czech Labour Code are:

• Further development and detailed specification of the concept of non-discriminatory treatment. Discriminatory treatment is defined as including discrimination on the basis of sex, sexual orientation, racial and ethnic origin, nationality, citizenship, language, marital status, health condition, age, religion and politics. Such discrimination, direct or indirect, is forbidden;
• Rules on sexual harassment;
• The modified provisions allow for the inclusion of non-competition arrangements in contracts of employment. If a non-compete clause is introduced to an employment contract, under the new regime the employer will be obliged to pay the employee financial compensation equal to the employee's salary in the period prior to the termination of employment. A non-compete clause may be agreed for a maximum period of one year and the law sets out the parameters within which a non-compete clause may be agreed in an employment contract. A non-compete clause may not be agreed during the probation period;
• The introduction of the concept of employment contracts for a fixed term. Employment contracts for a fixed term may be agreed upon, or extended by agreement for a maximum period of two years from the date of establishment of employment. The same applies to any subsequent employment for a fixed term agreed between the same parties within the specified period of time. If more than 6 months have elapsed since the termination of the previous employment, the previous fixed term between the same parties will not be taken into account.