Czech Republic: Latest working life developments – Q1 2018

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Ongoing political uncertainty, Uber’s business practices, trade union growth and gender equality in the workplace are the main points of interest in this article. This country update reports on the latest developments in working life in the Czech Republic in the fourth quarter of 2017.

Political uncertainty limits legislative changes

Following the general election in October 2017, the new Czech government received a vote of no confidence from the Chamber of Deputies in January 2018. Prime Minister Andrej Babiš was obliged to resign and open negotiations with other political parties to form a new coalition government. There has been limited progress since then, which has delayed the introduction of any major legislative changes.

Negotiations take place on operations of taxi services

During early 2018, negotiations took place between government representatives, Prague City Hall, the Association of Taxi  Concessionaires (AKT), the Association of Czech Taxi Drivers (SČT) and Uber. The purpose of the negotiations was to decide how Uber and similar companies like Taxify should operate.

In February and March, AKT organised two strikes in response to Uber’s business practices and the government’s perceived attitude towards the company.

Mr Babiš and Prague Mayor Adriana Krnáčová initiated a meeting with the CEO of Uber for Central and Eastern Europe in March. Both parties agreed on a number of major changes concerning the way in which Uber conducts its business. The company agreed to base its business in the Czech Republic (rather than the Netherlands) and apply for the relevant trade license. In addition, employees will need to be licensed taxi drivers and unlicensed drivers will be penalised.

Uber also agreed that it would reach an agreement on how to report its revenue to the relevant authorities by the end of April.

Trade unions strengthen negotiating power

Labour shortages remain an issue in the Czech Republic and experts predict that the situation is unlikely to improve in 2018. Companies are addressing the shortages by refusing orders, employing foreign workers with work permits, employing illegal workers or investing in automation.

This situation has given trade unions a stronger negotiating position and they are experiencing a growth in membership. New unions have also emerged for companies such as Amazon, Karlovy Vary Mineral Water, H&M, Marks & Spencer and UNI HOBBY.

The trade unions have also taken advantage of the country’s economic and wage growth, particularly in relation to larger companies. For example, the unions at Škoda Auto in Mladá Boleslav are demanding wage increases of at least 18% this year.

Moreover, for the first time, trade unions have introduced their wage demands before the collective bargaining process on wage developments begins. The average shop-floor montly wage at Škoda Auto is CZK 40,000 (€1,556 at 23 May 2018). This already substantially exceeds the average wage in the national economy (CZK 28,700, or €1,117). The company, which forms part of the Volkswagen Group, has reacted to the wage growth by introducing an 18-shift system where Saturday is considered a full working day. According to the firm’s management, this step was necessary in order to cope with the increasing volume of orders.

Survey finds high level of perceived gender pay inequality 

The Czech Republic has reported a relatively wide gender pay gap (21.8%) for several years. In February 2018, the Association for Social Responsibility and the Ipsos agency carried out a gender equality survey and interviewed over 1,000 people aged 18–65. Half said they had encountered wage discrimination in the workplace (one gender being paid more than the other for the same role). Women (56%) had encountered this slightly more than men (45%), while a relatively low number of students with a higher level of education, and young people, had encountered it.

Only one-third of women believed that there were enough women in top positions in the private sector. Two-thirds felt that gender inequality affected social, political and/or economic rights.

Commentary

In the next quarter, discussions regarding the abolition of the three-day initial unpaid sick leave period are expected to continue. The Czech Social Democratic Party – a potential member of a future government coalition – is demanding that these initial three days are paid and believes this should be a governmental priority.

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