A More Employer-Friendly Labor Code?

The landscape of labor law in 2025 looks set to be more employer-friendly, with a significant update to the Labor Code – the "Flexible Amendment" – currently under discussion. While the aim is to have the changes in effect by April 1, 2025, most experts predict a more realistic start date of July 1, 2025.

What would the Flexible Amendment bring?

1.      Extension of the Probationary (Trial) period

The maximum trial period would increase from 3 to 4 months and for executive employees from 6 to 8 months.

Employers could also extend the probationary period to the full maximum length, if a shorter period had initially been agreed. This would give employers more time to assess a new hire's performance, ensuring that they are the right fit for the company.

2.      Increased Flexibility for Parents Returning to Work

The proposal makes new rules relating to the employment of people caring for young children. It now allows for these employees to perform the same type of work for the same employer on the basis of a work activity agreement (DPČ) or a work performance agreement (DPP)).

It might be beneficiary for the employer if an employee on parental leave can work effectively in a limited capacity under DPČ or DPP, as he may save the costs associated with recruiting a new employee (training, etc.). At the same time, the relationship under this agreement can be easily terminated, if it is later found that the new set-up does not suit both parties.

3.      Repetitive Fixed-Term Employment Contracts

Employers may renew fixed-term agreements as often as they need under specific circumstanceswhen replacing an employee on maternity, paternity, or parental leave. However, the total duration of all fixed-term agreements may not exceed 9 years.

On the other hand, reinforcing legal regulations to guarantee that employees returning from parental leave can return to the same job and workplace, even before their child reaches the age of two, could become more problematic.

4.      Termination Without Cause – A Groundbreaking Proposal

One of the most notable proposals is the introduction of termination without cause. This means that employers would be entitled to end employment relationships without specifying any reason. However, exceptions would apply in case of employees who are close to retirement and those on maternity, paternity, or parental leave, or employees with disabilities.

When terminating without cause, the severance pay should be twice the statutory amount, e.g. if an employee has worked for more than two years, they would be entitled to a severance payment of six monthly wages.

5.      Changes to the notice period

Start Date of the Notice Period

When terminating an employee, the notice period would begin on the date the notice is delivered, rather than the first day of the following month, as is the current rule. While this may seem like a minor change, it could have a significant impact on termination timing, especially in cases of organizational restructuring.

It is important to note that the parties may agree contractually on a different starting time for the notice period.

Length of the Notice Period

A new rule would introduce a shorter notice period of  only one month for so-called "sanction terminations", i.e. terminations due to employee misconduct or breach of obligations.

Employers should also be aware that is common practice in the Czech Republic that existing agreements specify a two month notice period for both parties. In this case, employees may argue that a two months notice period was agreed between even for “sanction terminations”.

Take Action Now

The Flexible Amendment is still under debate, but the proposed changes are likely to have a significant impact on your workforce management. We recommend reviewing your standard employment agreements and, if necessary, amend them.

By Mgr. Dagmar Junková

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