Do you do business in the Czech Republic via a subsidiary or branch office? Have you got employees with contracts governed by Czech labour law?
You need to know: the new “Flexi-Amendment" to the Labour Code takes effect 1 June 2025. Neglecting the major changes it’s bringing can lead to fines from Czech authorities and wasteful financial losses.
Our Czech employment law colleagues have summarized the key changes for you:
- Termination of employment and notice periods
- Notice periods will begin on the day the notice is served.
- Notice period start dates can now be agreed on directly between employers and employees instead of being stipulated by law. However, if your current employment contract uses the exact wording from the unamended Labour Code, this wording would still prevail. This would mean that the parties have agreed on overextended notice period terms, potentially costing employers extra weeks of employment pay.
- Notice periods will be reduced to one month, in certain cases.
- In certain work-related health situations, “compensation” will replace statutory “severance pay”, which means it will now be reimbursed by insurance companies. Also, this compensation will not be subject to social security or health insurance contributions.
- Employers will now be able to terminate employment due to a “breach of work discipline” or to dismiss an employee immediately within three months of the day they became aware of such a reason. On the other hand, the absolute deadline for taking such action will be 15 months from the day on which the reason for termination or immediate dismissal occurred.
- Despite efforts of some, termination without cause has not been adopted.
- There are new maximum probationary period durations for both regular employees (up to 4 months) and those in managerial positions (up to 8 months).
- Stronger protection for parents in the labour market
- While on parental leave, employees can now do the same kind of work for the same employer they were doing before taking leave.
- No limit to number of repetitions in new fixed-term employment contracts for replacing an employee temporarily away due to maternity/paternity or parental leave – allowing employers to adapt to wishes of their employees to extend parental leave beyond the original planned duration - even repeatedly.
- Employers will now be required to restore an employee to their original position and workplace if the employee returns to work after parental leave before the child reaches the age of 2 – not just after the shorter maternity or paternity leave.
- Paying salaries via bank transfer will become the default method (payment in cash must be agreed upon in advance by both parties).
- Options for paying salaries in foreign currency are expanded under certain conditions.
- Prohibition of confidentiality clauses: Employers can no longer prohibit employees from discussing the amount and structure of their pay. Violations can bring fines of up to CZK 400,000 (approx. EUR 16,000). As such clauses are common in current contracts, agreements, and templates we strongly recommend a review of them.
- When employees succeed in challenging invalid employment termination, they are now entitled to salary compensation for annual leave accrued during court proceedings (as upheld by the EU Court of Justice).
- Entry medical examinations
- Entry medical examinations will no longer be necessary for low-risk jobs
- Increase in unemployment benefits (paid by the state)
- Effective as of 1 January 2026
- Other changes of note (regarding e.g., trade unions, calculation of average monthly earnings, employment of minors, and other important personal hindrances to work)
Do you need help to comply with these changes, in time? The new legislation requires adjustments to documentation like employment contracts, information documents for employees, internal regulations and internal procedures.
Please get in touch now with our employment team head in the Czech Republic, Pavel Juřička (p.juricka@taylorwessing.com) and reach out if you, or someone from your (HR) team would like to stay updated with our newsletter on Czech employment law (in English, German, or Czech).
