Czech Republic: Developments in working life – Q1 2016

Positive trends in economic performance (raising the issue of an imbalance between cheap labour and productivity), measures to deal with disadvantaged groups on the labour market, and equal pay are the main topics of interest in this article. This country update reports on the latest developments in working life in the Czech Republic in the first quarter of 2016.

Changes in labour legislation as the economy grows

According to statistics on economic developments in the Czech Republic, in 2015 GDP increased by 4.3% compared with 2014, the fastest growth in the last eight years. The increase in real wages (3.5%) has also been the most noticeable since 2007. Trends in unemployment were also positive, the rate dropping from 7.5% for the same period last year to 6.3% (as of 29 February 2016). Although wages have been increasing, trade unions point out that this has not corresponded to economic growth. The unions have therefore focused their campaigns mostly on the issue of cheap labour and their efforts have been partially supported by the government which has raised the minimum wage. From 1 January 2016, the minimum monthly wage in the Czech Republic became CZK 9,900 (€366 as at 20 April 2016) which is CZK 500 (€18) higher than 2015.

As outlined in the legislative work plan for 2016, the Czech government wants to amend the Labour Code, which is expected to be completed by spring 2016. The most essential changes concern working conditions such as:

  • working from home/telework;
  • trade union plurality and collective bargaining;
  • the annual leave system;
  • scheduling of working hours among top managers;
  • new rules for agreements performed outside an employment relationship;
  • collective redundancy.

At the time of going to press, the amendments suggested by the Ministry of Labour and Social Affairs are undergoing external consultation and could still be changed – especially if employers raise strong objections to the current text. For example, employers are particularly concerned that the proposals for the new amendment on working from home will result in such a heavy financial and administrative burden that there will be a substantial drop in employers’ willingness to offer such a work arrangement.

Measures to deal with disadvantaged groups in the labour market

A measure that has already been approved, and effective from 1 April 2016, is aimed at boosting labour mobility in the Czech Republic. Unemployed people from selected regions can apply for a travel allowance to help them commute to a new job. The allowance goes directly to an employee and can be used not only for travel costs but also for accommodation.

Equal pay

A hot topic was also the question of equal pay for men and women. Women in the Czech Republic still make on average 22% less than men. The wage gap is highest in the private sector, although it is also present (to a lesser extent) in the public sector. The Czech Republic has one of the highest gender pay gaps in the EU and the government is attempting to combat this. The Minister of Labour and Social Affairs has introduced a campaign called ‘22% to fairness’, its name highlighting the percentage difference of the gender pay gap. The launch of the new five-year campaign is planned for spring 2016.

In February 2016 the Ministry of Industry and Trade (MPO) released a comprehensive report on the Fourth National Initiative for Industry (PDF). The report was prepared by a group of business experts (mostly in production) and academics.

Research

Among the most important research on working conditions to be published in this period is the detailed study of Transformations in the quality of working life, based on a widely representative sample survey. It was published at the beginning of 2016 and the research and the study itself were coordinated by the Occupational Safety Research Institute (VÚBP) and the Public Opinion Research Centre (CVVM).

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