EurWORK European Observatory of Working Life

Czech Republic: Temporary agency work and collective bargaining in the EU

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  • Observatory: EurWORK
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  • Published on: 18 December 2008



About
Country:
Czech Republic
Author:
Jaroslav Hala
Institution:

Disclaimer: This information is made available as a service to the public but has not been edited or approved by the European Foundation for the Improvement of Living and Working Conditions. The content is the responsibility of the authors.

Although on the rise in the Czech Republic, agency employment is still in its early days compared to western Europe and is chiefly the domain of less qualified manufacturing labourers. Agencies (e.g. one of the market leaders Trenkwalder) themselves confirm that Czechs are still relatively unwilling to work in short-term jobs and still prefer long-term employment. It is expected, however, that the existing upward trend in the use of agency work will continue and it should take on the form common in western Europe.

Section 1. Definitions

1) In your country, is there a statutory definition of:

a) temporary agency work?

Yes.

The statutory definition of agency work is contained in the Labour Code and the act on employment. The Labour Code also classifies as “dependent work” cases where employers, in accordance with a permit issued pursuant to a special legal regulation (the act on employment), temporarily allocate their employees to perform work for another employer based on arrangements in an employment contract or agreement on work activity. The employment agency makes a written commitment to arrange for the employee temporary work at another employer (Czech law uses the term “user”) and the employee undertakes to do this work according to the user’s instructions. Under the act on employment, temporary agency work means the conclusion of an employment relation or agreement on work activity between a natural person and an employment agency for the purpose of the performance of work at a user. The employment agency may temporarily allocate its employees to work for users solely on the basis of a written agreement on the temporary allocation of the employee concluded with the user pursuant to a special legal regulation.

b) agency worker?

Yes.

As regards employees in general, section 6 of the Labour Code defines the conditions under which natural persons become fit as employees to have rights and obligations in labour relations as well as how, by performing acts in law, they acquire these rights and assume these obligations, starting on the natural person’s 15th birthday. However, employers may not define the day on which work starts as any day before the natural person completes compulsory schooling.

The basic defining features of an agency worker stem from the aforementioned legal definition of agency work (a person who has signed an employment contract or agreement on work activity with a work agency and who performs work at a user).

c) user enterprise?

Yes.

Under the employment act user means a legal or natural person that allocates work to the agency worker and supervises his performance of the work.

2) Is there a collectively agreed definition of:

a) temporary agency work?

No.

b) agency worker?

No.

c) user enterprise?

No.

If yes, please give details (e.g. how and where defined).

3) In your country, would you describe TAW as a sector in its own right?

No. TAW is not viewed as a separate economic sector in the Czech Republic, but rather as a specific service to other sectors.

Section 2. Regulatory framework

1) Have there been any changes in the law concerning TAW since 2004?

a) Yes b) No

No.

2) How is TAW regulated in your country?

a) Is there a legal framework specifically for TAW; and/or is it covered by general labour law (including case law/ jurisprudence)?

There is no special law. The working of agencies is covered by the aforementioned provisions of the Labour Code and by the act on employment.

b) What is the role, if any, of collective labour agreements and self-regulation?

The Labour Code specifies that the extent of agency work can only be restricted in a collective agreement concluded with the user. It is a reasonable estimate (data are not available) that collective bargaining and collective agreements do not play a major role in TAW in the Czech Republic.

By contrast, the role of self-regulation is considerable, exercised through a joint organisation founded by the four largest work agencies. The Association of Providers of Personnel Services (Asociace poskytovatelů personálních služeb, APPS) was founded in 2002. It is a professional organisation of personnel agencies and consulting firms in the field of the provision of personnel services. It supports the professional development of its members, promotes personnel consultancy services, provides its members with information and consultancy services etc. APPS’s mission is to improve the environment on the Czech labour market; it opposes any kind of discrimination on the Czech labour market (one of the Association’s goals is to eliminate or reduce the use of unlawful practices in connection with TAW). Members of APPS prove their professionalism through the high quality of the services they provide and by signing up to the APPS Code of Ethics.

3) What is regulated in these provisions? In particular, does it cover:

a) use of agency work (e.g. length of assignment, sectoral bans, permitted reasons of use, number of agency workers per company, other)

Yes.

The Labour Code provides that a work agency may not temporarily allocate one and the same employee to work at the same user for a period longer than 12 consecutive calendar months. This restriction does not apply to cases where this takes place at the request of the agency worker or if the work is being performed for a particular period of time to replace a female employee of the user who is on maternity or parental leave or for a male employee of the user who is taking parental leave.

Agency workers tend to be employed for a finite period. In this context the act on employment provides that the restrictions imposed by the Labour Code on the conclusion of employment relations for a fixed period do not apply to agency workers. Work agencies can thus conclude an employment relation with these workers for a fixed period without any restrictions, i.e. including repeated contracts. According to some legal opinions, the duration of this kind of employment relation need not be defined by a specific time and date: the relation may also be concluded for the period of the temporary allocation of the worker to a specific user, without any prior specification of the duration of this allocation. The duration of the employment relation may thus be tied to a specific agreement on temporary allocation of an employee concluded between the agency and the user.

Under the act on employment, the government may issue a regulation defining the kinds of work that work agencies cannot temporarily allocate (there are no reasons for any such restrictions in view of the low unemployment).

b) the form of the contract (e.g. project, fixed-term, special contract, open ended, etc.)

Yes. The following conditions are laid down by the act.

Work agencies may temporarily allocate their employees to perform work at another employer solely on the basis of written arrangements in an employment contract or agreement on work activity in which the work agency undertakes to allocate its employee to perform temporary work under an employment contract or agreement on work activity at another employer (the user) and the employee undertakes to perform such work according to the user’s instructions and on the basis of an agreement on the temporary allocation of the work agency’s employee concluded between the work agency and the user.

The work agency allocates its employee to the user on the basis of a written instruction specifying, among other things, the duration of the temporary allocation, the conditions for unilaterally declaring the work terminated before the temporary allocation period ends if these conditions are provided for in the agreement on the temporary allocation of the work agency employee, information about the working conditions and pay terms of the user’s comparable employee etc. The kind of work the temporary worker will perform and the place of work must be specified in the temp’s employment contract.

The temporary allocation ends upon the elapse of the period for which it was agreed; before the end of such period it may be terminated by agreement between work agency and temp or by a unilateral declaration by the user or temp according to the conditions set out in the agreement on the temporary allocation of the agency worker.

Agencies may not allocate an employee to one and the same user for a period longer than 12 consecutive calendar months (this restriction does not apply if that takes place on the basis of the agency worker’s request or if the work is being performed for a specific period in replacement of an employee of the user who is on maternity or parental leave or performing civilian service).

c) social security and social benefits

Yes.

The basic condition for agency employment is the Labour Code’s requirement that the work agency and the user must ensure that the temp’s work and pay conditions are not worse than a comparable employee enjoys or would enjoy. Comparable employee here means an employee of the user who performs or would perform (if the user’s employees performed such work) the same work as the temp, making allowance for qualifications and length of work experience. If at any time during the performance of work for the user the temp’s working or pay conditions are worse, the work agency is obliged to ensure equal treatment when so requested by the temp or without such request if it finds out about it another way. The temp has the right to demand that the work agency ensures his entitlements are satisfied. Consequently, the agency could have to pay any outstanding claims of its employee. In this way the act prevents labour market dumping and transposes the principle of employees’ equality of working conditions into the hiring of labour. As far as comparable working conditions are concerned, this concept is not defined by the act and various legal interpretations are possible. For example, in the narrower sense working conditions can be understood to be conditions required by the labour regulations, so these may include superior labour-law entitlements specified in a collective agreement or employer’s internal regulation (leave extended by a further week or weeks or days on more advantageous terms than the legally defined working leave, shorter hours without any reduction in pay, or also advantageous works catering etc.). Although collective agreements with the user and the user’s internal regulations do not directly apply to agency workers, under this legal interpretation these documents indirectly shape these employees’ level of pay and other working conditions. In line with this legal opinion and with a view to precluding interpretation uncertainties there have been recommendations that the law should specify that collective agreements, both enterprise level and higher, that cover a user are also binding for agency workers temporarily allocated to that user.

As regards the conditions of sickness and pension insurance (as defined by the law), these are the same for agency workers and core staff (employees in a standard employment relation).

d) conditions to open a TAW agency (e.g. license or authorisation schemes, supervision by public authorities, financial requirements, or others - please specify)

Yes.

The conditions for opening an agency are specified in the act on employment. Mediating employment can be done only with an employment mediation licence issued by the Ministry of Labour and Social Affairs (Ministerstvo práce a sociálních věcí ČR, MPSV ČR) based on an application by a legal or natural person. To receive a licence a natural person must be at least 23, competent to perform acts in law, unimpeachable and professionally competent, and must be resident in the Czech Republic.

The requirement of being unimpeachable and professional competence are defined in the act. A natural person who has completed university education and has at least two years’ professional experience in employment mediation or in the field for which employment mediation is to be permitted, or who has complete secondary education and at least five years’ professional experience, is deemed to be professionally competent. One natural person may not be appointed to the position of responsible representative for more than 2 legal entities.

The licence is issued for a maximum period of 3 years (licences can be issued repeatedly, again upon application).

If the legal or natural person ceases to satisfy the conditions for award of the licence as specified in the act on employment or mediates employment in a manner contrary to the conditions laid down by law or in conflict with good morals, the Ministry may decide to revoke the licence. If an employment mediation licence is revoked the legal or natural person may not apply for a new licence until 3 years have passed since the revocation decision took effect.

As far as the control system in agency employment is concerned, the state’s control and sanction powers are divided between the labour offices, which monitor compliance with the act on employment, and the work inspectorates. Additionally, this issue falls under the authority of the financial authorities (tax administrators), i.e. the tax offices in particular.

e) business activities/services delivered by TAW agencies (e.g. prohibition to provide other services than TAW)?

Yes.

Under the act on employment work agencies can mediate work either free of charge of for a fee, including a profitable fee. When brokering work for a fee, no fee may be demanded from the natural person for whom the employment is being mediated. It is also prohibited to withhold in favour of the work agency or user any sums from wages or other pay provided to the worker for the work done.

f) third-national companies or temporary agency workers (e.g. activities of foreign agencies)?

Yes, under the act.

The act also regards as agency mediation of work cases where a foreigner is sent by its foreign employer to work in the Czech Republic on the basis of a contract with a Czech legal or natural person and the substance of the contract is the hiring of labour. Foreigners who are non-EU nationals and want to be employed in the Czech Republic must have a valid employment permit specifying, among other things, the kind of work and the place of work. An EU national is also a foreigner within the meaning of the act. Nevertheless, this does not affect the right of natural or legal persons settled in the Czech Republic for the purpose of brokering employment in a different EU member countries to provide employment mediation services in the Czech Republic on a temporary and exceptional basis. Both the above conditions must be satisfied, however, i.e. that the mediation is both temporary and exceptional and is not the systematic business of a foreign work agency. On the day on which it starts its temporary and exceptional activity in the Czech Republic the foreign agency is obliged to notify the MPSV ČR in writing of the particulars specified in the act and the time for which this activity will be performed. If there is warranted suspicion of a serious risk to legitimate interests or of unauthorised provision of mediation services, the Ministry may review the eligibility of these work mediation agencies, including the question as to whether it was founded according to the law of another EU member state.

4) Do any regulations (by law and/or collective bargaining in the TAW sector) specify equal treatment rights for agency workers with permanent workers in the user enterprise concerning:

a) pay

In connection with agency employment the act mentions wage (and working) conditions in general, without specifying them.

No.

b) other terms or conditions of employment?

Working conditions are not specified in terms of equal treatment in agency employment (see 3c), they are merely mentioned in general.

If yes, please give details.

5) Do TAW workers have the right to information, consultation and representation?

If yes, please specify the nature/basis.

Yes.

In this area agency workers are covered by the applicable legislation just like other employees (they have the right to information and consultation that the employer either provides directly or via an employees’ representative). In practice, however, by their nature and given the specific status of TAW workers work agencies cannot objectively fulfil this obligation. For that reason, in the context of this problem we encounter the expert opinion that an amendment to the act should transfer this obligation to the user: employees’ representatives at the user would also represent the temporarily allocated agency worker.

6) Is there a control/enforcement mechanism regarding any TAW regulation?

Yes.

If yes,

a) is there a special labour inspectorate or a bi-partite body governing TAW?

No.

b) are there any sanctions/penalties for not respecting the regulations (whether stemming from law and/or collective agreements)?

Yes, the act provides for sanctions (revocation of the licence or imposition of a fine of up to CZK 2 million in the specified cases).

7) Are there any procedures governing use of TAW and strike breaking?

In particular, can workers on strike be replaced by agency workers?

There are no specific provisions concerning the use of TAW by a user when its employees are on strike. However, the collective bargaining act provides that employers may not replace workers on strike with other people.

Section 3. Social dialogue and collective bargaining

1) Is there any employers’ association(s) for TAW firms in your country?

If yes, please provide any data on membership (e.g. sectoral coverage of firms/workers)

No.

The aforementioned APPS is not an employers’ association.

2) Is there any union(s) specifically for agency workers?

No.

If no, have any unions or confederations targeted the recruitment of agency workers? launched any campaigns around agency workers’ rights?

The trade unions pay considerable attention to the issue of agency employment. The KOVO metalworkers’ union (Odborový svaz KOVO, OS KOVO), the biggest trade union in the Czech Republic and a member of the Czech-Moravian Confederation of Trade Unions (Českomoravská konfederace odborových svazů, ČMKOS), performs continuous monitoring of certain discriminatory practices connected with the use of agency employment on the Czech labour market. The monitoring is not aimed at recruiting members among agency workers: it is an endeavour to prevent social dumping in this area of the Czech labour market.

3) Collective bargaining levels

Is TAW governed by collective bargaining at:

a) intersectoral/ national level?

No.

b) the sectoral level for TAW?

No.

c) company (ie. temporary agency firm) level?

No data. According to our estimates, there is either no or very little collective bargaining at this level, however.

If yes, please provide details of the parties concerned.

No data.

4) Collective bargaining outcomes

Please provide examples and details of any recent/ significant collective agreements governing TAW at the levels referred to in question 3.

No data.

5) Are there any examples of sector- or company-level collective agreements in other sectors that restrict, permit or otherwise regulate the use of TAW within their domain?

Such cases do exist, and not just in enterprise-level collective agreements; they also exist in higher-level collective agreements (but very rarely). For example, a higher-level collective agreement concluded by the Trade Union of Workers in Woodworking Industry, Forestry and Water Management (Odborový svaz pracovníků dřevozpracujících odvětví, lesního a vodního hospodářství v České republice, OS DLV) contains provisions concerning possible restrictions on recruiting via work agencies in enterprise-level collective agreements.

6) Please provide any data concerning:

a) trade union density for agency workers

Data on trade union density for agency workers are not available.

There are no special trade unions associating agency workers in the Czech Republic. As regards agency workers’ membership of trade unions in general, although possible in principle the specific conditions for agency workers’ trade union membership are essentially considerably disadvantageous (employment concluded for a fixed period, limited period of allocation to the user and related frequent change of their place of work etc.).

b) the coverage of collective bargaining within the sector.

There is no sectoral collective bargaining in the field of agency employment in the Czech Republic (see above).

Section 4. Employment and working conditions of TA workers

1) Please provide the most recent data (averages) on TAW employment

a) longevity of TAW employment, i.e. how long workers remain employed

- in the sector?

- with a particular agency?

No data.

b) duration of TAW placements, i.e. i.e. the length of assignment in a user company.

No data.

2) Please provide any evidence from official, academic and social partner sources concerning:

a) the reasons for user companies’ usage of TAW, including any differences by sector, occupation, firm size etc.

No data. Factors stressing the advantages, chiefly the flexible nature of this form of labour, tend to mentioned in practice.

b) reasons for workers participation in the sector and levels of satisfaction, including any differences by age, sex, education etc.

No data.

3) In practice, which rules and procedures may apply to temporary-agency workers in contrast to other workers in the user company?

In practice, agency work is abused most frequently by employers – employers establish work agencies to save on staff costs (mainly saving on overtime – the employee works part of the day as a core employee of his employer and part of the day as an agency worker of the user). There are also breaches, including among reputable companies, of the provisions of the Labour Code stipulating comparable working and pay conditions for agency workers (for more information on non-compliance with the regulations in TAW see CZ0802029I).

Section 5. The extent and composition of TAW.

1) For 2004 and 2007, please state

a) the number of agency workers

Data for the Czech Republic as a whole are not available. Here we present some information by way of illustration.

The biggest concentration of agency workers is in industrial sectors with a high share of foreign capital. According to data from the Czech Statistical Office (Český statistický úřad, ČSÚ), there were tens of thousands of agency workers working in industry in 2007. In the first quarter of 2007 there were almost 40,000 such workers, most of them in the automobile industry (10,500), in firms making electrical and optical instruments and apparatus (10,000) and in metallurgy (6,000).

According to company data published in March 2008, in 2007 the number of core employees at one of the biggest employers in the Czech Republic, Skoda Auto (Škoda Auto, a.s.), increased by 2.3% to 23,559 people, while the number of agency workers grew by 13.2% to 4,194.

The number of agency workers allocated to user companies by members of APPS in 2007 (again according to company data) was: Index Nosluš s.r.o. approx. 20,000 people; Manpower s.r.o. 8,500; Grafton recruitment s.r.o. 7,710; Start People s.r.o. 6,947: ADECCO s.r.o. 2,950; Hofmann Wizard s.r.o. 1,110; Synergie s.r.o. 112 etc.

b) total reventues of the TAW sector

No data.

No data for 2004, 2007.

2) What proportion of the TAW workforce is currently

a) male/ female?

No data.

b) full/part time?

No data.

c) young (<c. 25) or older (>c. 50) workers?

No data.

3) Has there been any changes to the TAW sector in terms of

a) concentration, i.e. proportion of employees or turnover accounted for by the largest firms?

Statistical data are not available.

b) internationalisation, i.e. number/significance of multinational TAW firms?Statistical data are not available.

4) What is your evaluation of the availability and quality of statistical data concerning TAW in your country?

For statistical purposes work agencies report to the MPSV ČR the number of vacancies for which mediated recruitment was requested, the number of people thus placed in jobs and the number of work agency employees who have worked at a user as part of TAW. Agencies report all these data for the preceding year to the Ministry by 31 January of the current year. Based on this information (including the address of work agencies and their offices) the Ministry keeps records of work agencies that have been issued with licences – part of the records is publicly accessible.

Failure to fulfil this reporting duty may be punished with a fine of CZK 500,000. Nevertheless, in practice just one third of work agencies discharge this duty, and the others go unpunished. What is more, the available data are distorted by the fact that certain work agencies do not perform mediation of labour but only use agency work within a business group. Above all, however, the Ministry is currently unable to process the data statistically at present in view of the enormous number of agencies operating in the Czech Republic.

Commentary by the NC

As far as the social partners’ views on the use of TAW are concerned, the trade unions’ position is unequivocal. The trade unions want to restrict the use of agency work; in their opinion it is not systemic and causes more problems in companies than it resolves. According to the unions, TAW contributes to unfair competition between firms – it is supposed to be just a supplemental source of labour for seasonal work, but it is used, even by big firms, in cases where there is no reason for it (e.g. when a company has a constant stream of orders). In addition, the trade unions claim that it leads to tax evasion to the tune of billions of koruna per year. The unions therefore demand that the rules for agencies are tightened and a clear legal framework is put in place.

By contrast, employers (e.g. the most important employers’ association in the Czech Republic, the Confederation of Industry (SP CR)) appreciate agency work for its flexibility, but they also admit that the existing legislation should be amended to prevent abuses.

For more information on the social partners’ positions see CZ0611049I, CZ0612059

Jaroslav Hala, Research Institute for Labour and Social Affairs

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