Multinational retail chains in breach of labour law

The Czech Republic’s State Labour Inspection Office (SÚIP) carried out 157 checks of 19 multinational retail chains for their observance of labour law regulations in 2007. The inspections uncovered a total 401 breaches of the regulations. However, SÚIP only imposed fines amounting to CZK 745,000 (about €30,387). The most frequent types of breaches involved violation of the country’s Labour Code provisions.

Role of labour inspectorate

The State Labour Inspection Office (Státní úřad inspekce práce, SÚIP) and regional inspectorates are responsible for checking companies’ observance of labour law regulations and working conditions, as well as workplace health and safety regulations. They also carry out other specialist assignments with regard to work safety and industrial law in accordance with Act No. 251/2005 of the Collection of Laws on work inspections. The labour inspection authorities do not select certain sectors or categories of employers for their inspection activity at their own discretion or on the recommendation of other entities. Their monitoring activities are based on the principal tasks stipulated in a programme of inspection campaigns for a given year, which is approved by the Ministry of Labour and Social Affairs of the Czech Republic (Ministerstvo práce a sociálních věcí České republiky, MPSV ČR) after discussions with employer organisations and trade unions.

Inspections of retail chains

In 2007, among other things, checks were made of the observance of labour law regulations in multinational retail chains, whose working conditions are among the worst in the Czech Republic and which are constantly being monitored by trade unions (CZ0609029I, CZ0702049I, CZ0712029I). In total, SÚIP carried out 157 checks of 19 multinational retail chains for their observance of labour law regulations in 2007. The inspections uncovered a total 401 breaches of the regulations. However, SÚIP only imposed fines amounting to CZK 745,000 (about €30,387 as at 18 August 2008).

The majority of labour law breaches last year were committed by the German grocery retail chain Kaufland, where inspections uncovered a total 107 breaches. However, the overall fine for these violations amounted to only CZK 120,000 (€4,907). The Austrian Billa supermarket chain had the second highest number of breaches last year, amounting to some 72 violations, for which the company was fined CZK 155,000 (€6,339) overall. The highest fine in 2007, amounting to CZK 185,000 (€7,558), was imposed on the German food discount retailer Plus, where 24 breaches of labour law regulations were uncovered. No breaches of labour law regulations were found at the Czech sports equipment retail chain Gigasport and the German high-street chemist Schlecker.

Most frequent types of breaches

The greatest number of breaches involved violations of the country’s Labour Code, particularly with regard to: workplace health and safety training for employees; regulations in connection with establishing, changing and terminating employment relationships; agreements on work performed outside of an employment relationship; the remuneration of employees, more specifically not paying wages by the due date or not paying them at all; and employees’ working hours, such as keeping insufficient records of working hours and of lunch and rest breaks. Employers also frequently violated the obligation to inform employees of the content of their employment relationship – for example, in relation to notifying them of their weekly working hours and their distribution, and about holidays and notice periods. This lack of employment information occurred not only in relation to citizens of the Czech Republic, but also with regard to the employment of foreign nationals. In many cases, employers also violated the obligation to notify employees of the results of evaluations of workplace risks and measures adopted to protect against the impact of these risks, which endanger the health and life of employees and result in needless work-related injuries.

Trade unions critical of fines imposed

The trade unions expressed their dissatisfaction with the level of fines imposed, for instance describing the highest single fine of CZK 10,000 (€409) imposed on a Plus outlet as too low and arguing that: ‘Chains that make billions of profits receive fines that are absurdly low and are of absolutely no help in resolving problems in the workplace’ (see the trade union publication Sondy Dnes (in Czech), 9 July 2008). Nevertheless, SÚIP argues that the maximum fine is set by the law on work inspections, according to which it is possible to impose a maximum fine of CZK 2 million (€81,680). The labour inspectorate also insists that the fines take into account the circumstances of the monitored entity and the seriousness of the violation, as well as the consequences and conditions under which the breach occurred.

, Research Institute for Labour and Social Affairs