Guide to Restructuring a Cross-Border Workforce

Only the employee's ability or conduct or the needs of the company are justified reasons for dismissing employees in Belgium. Redundancy does not exist as a concept as such, but by referring to the needs of the company the law allows dismissal for any economic reason, provided the employer acts reasonably.

A few examples of acceptable economic reasons are: lack of work due to the loss of certain assignments; internal restructuring following disappointing financial results; and difficult economic conditions.

Yes, there is. An employee is redundant if the following conditions are met:

• the employer adopted a decision on organisational change;
• the change concerns the scope of activities, tasks, technical equipment, number of employees, or otherwise alters the structure of the employer;
• the aim of the change is to increase work efficiency, reduce costs, or otherwise alter the performance of the employer’s enterprise; and
• as a result, the employee’s work is redundant or not needed.

According to case law, the employee’s work is not needed, either at all or at least in part, with the rest being distributed among the current employees or corporate body. Rebranding the position, hiring a new employee to carry out the work of the dismissed employee shortly thereafter, or otherwise fabricating the redundancy with an ulterior motive does not qualify as redundancy.

Czech law provides two other similar reasons based on which an employer is entitled to terminate employment – closing down or relocation of the employer’s undertaking or its part. Together with redundancy, these three reasons are known as “organisational reasons” (in Czech: “organizační důvody”) for termination of employment. However, closing down and relocation of the employer or its part are different reasons than the redundancy itself, and therefore we do not address them further.

To make someone redundant, the employer must notify the dismissal by any means (letter, meeting, email, etc); however, a registered letter of dismissal is preferable and is mandatory if notice is given. This letter may also mention the reasons for dismissal but this is not compulsory. The letter may also mention the length of the notice period or if compensation in lieu of notice will be paid instead.

Before communicating the dismissal, an employee does not have a right to be heard but this may be preferable.

Shortly after dismissal, an employee should receive the usual out-of-service payments (compensation in lieu, if any; a prorated end-of-year premium; and holiday payment) and the usual social documents.

The employer must take the following steps:

• review underlying documents (including organisational charts), decide what organisational change needs to be made and work out which positions are no longer needed, and plan the timing;
• adopt a decision on organisational change, including its effective date and which redundant positions are cancelled. The decision doesn’t have to be in writing or state reasons for the redundancy. However, both are highly recommended and a market standard, as this serves as evidence;
• if there are unions, consult the unions in advance (see question 4), and if a union representative is supposed to be made redundant, obtain the union’s consent in advance (see question 11);
• execute dismissal either by a termination agreement (recommended) or a termination notice with the redundant employees. In case of termination notice, the redundancy must (based on the decision) take effect on or before the notice period expired, not after; and
• implement the organisational change (including updating organisational charts).

Organisational changes may also be governed by collective agreements, in which case additional rules may apply (this applies to all the questions below).

In a collective redundancy, the process changes. There is a mandatory information and consultation procedure.

A collective redundancy exists where the dismissals are not based on the employees’ ability and occur during an uninterrupted period of 60 days involving a certain number of employees depending on the size of the company. Therefore, a collective redundancy exists if a certain threshold is crossed.

Belgian legislation establishes three different thresholds depending on the subject:

• the first concerns the information and consultation process:

• at least 10 employees are made redundant in a company with between 20 and 100 employees;
• At least 10% of employees are made redundant in a company between 100 and 300 employees; or
• At least 30 employees are made redundant in a company with at least 300 employees;

• the second threshold concerns the additional compensation to be paid for collective redundancies (see question 13); and
• the third threshold concerns the payment of a company supplement to unemployment benefits and the setting up of an employment cell to help employees find a new job.

The third and second thresholds are similar to the first threshold but are not exactly the same.

Yes, Czech law provides a special procedure for “collective dismissal” in all three cases of organisational changes (see question 1).

The threshold is:

• ten employees if the employer has 20 to 100 employees;
• 10% of employees if the employer has 101 to 300 employees; and
• 30 employees if the employer has more than 300 employees.

The respective number of employees must be dismissed due to redundancy within a period of 30 days. If at least five employees are dismissed within 30 days by termination notice due to redundancy, then employees dismissed in the same period by termination agreement are included in these thresholds.

In addition to the process above, collective dismissal must be:

• consulted with unions 30 days in advance, or notified to each affected employee if there are no active unions at the employer; and
• notified to the local Labour Office: (i) in advance, including information on commencement of the consultation process with unions; and (ii) on its result once it’s completed, in the form of a written report that must be delivered in copy to unions, which then have the right to comment on it – employment relationships can terminate only after the lapse of 30 days following this.

In an individual redundancy, there is no obligation for employers to consult with unions or employee representatives at any stage of the redundancy process. However, an obligation to consult is sometimes implemented at a sectoral or company level.

For collective redundancies there is an information and consultation phase, during which the employer must inform and consult with employee representatives to discuss alternatives to collective redundancies or, failing that, to limit their consequences.

An agreement does not need to be reached at the end of the consultation phase. In most cases, an agreement will be reached at a later stage of the collective redundancy procedure, when the employer negotiates a collective bargaining agreement with union representatives setting out the details of the support measures accompanying the collective redundancy.

Yes, the employer must consult any termination notice in advance. Agreement doesn’t have to be reached (with the exception of employees with enhanced protection; see question 11). In practice, the consultation is more of an announcement.

In case of collective dismissal, consultation must take place, and the employer must try to reach an agreement and inform the Labour Office of the result.

The agreement only plays a significant role in collective redundancies. In principle, there is no legal obligation to reach an agreement. However, if an agreement is not reached at the end of the consultation phase, employees’ representatives may raise objections as to the validity of the consultation phase within 30 days of the notification of the decision to proceed with a collective redundancy. These objections open up the possibility for dismissed employees to challenge their dismissal individually and ask for the suspension of their notice pending the new consultation phase or their reintegration.

It is the employer’s right to make an organisational change and its factual validity cannot be challenged. However, the individual dismissals may be challenged by employees. If successful (ie, the employer doesn’t prove redundancy), the restructure in the individual case may be prevented.

In the case of collective dismissals, it may be delayed by the unions prolonging the consultation. However, even then the unions and the Labour Office can’t prevent the dismissal, and the only way to prevent individual dismissal is a successful individual challenge by the dismissed employee.

If the unions believe that the collective agreement was violated by the redundancy or in the process of its implementation, they may dispute this violation. The dispute may be resolved by a mediator or escalated to an arbitrator. However, this doesn’t prevent the employer from executing the dismissals or restructure (only if violation is later found, it may have certain implications based on the individual collective agreement and nature of its violation).

The consultation process is initiated when the employer decides to undertake a collective redundancy and duly notifies the director of the subregional employment service where the company resides, as well as the Federal Public Service (FPS) for employment.

This notification should be distinguished from the one occurring at the end of the consultation process. More precisely, the relevant authorities will be informed on two separate occasions:

• at the start of the consultation process, when the employer plans to undertake a collective redundancy. The term "inform" is typically employed at this stage;
• at the end of the consultation process, when the employer finalises the decision to proceed with a collective redundancy.

After the first notification, the employer informs and consults with employee or union representatives to prevent or reduce the collective redundancy, or, failing that, to mitigate its effects. The employee or union representatives may ask questions or make recommendations, and the employer must consider them and respond to them.

The law does not stipulate a minimum or maximum duration for the consultation; it varies case by case.

In the event of non-compliance with the consultation procedure, employees may be awarded compensation, determined ex aequo et bono by the courts, and may even force the employer to repeat the procedure that was not followed (see question 5).

In case of individual dismissal, the consultation process is, rather, a notification (with the exception of employees with enhanced protection; see question 11) including:

• the identity of the employee;
• termination grounds (redundancy); and
• basic details of the redundancy (why and when).

It should take place prior to the dismissal (no specific deadline is given).

In case of collective dismissal, the consultation process includes:

• measures preventing or limiting the collective dismissal;
• mitigation measures (eg, employing the redundant employee at other workplaces of the employer);
• reasons;
• number and professions of redundant employees;
• number and professions of all the employees;
• the period during which the collective dismissal takes place;
• selection method of redundant employees; and
• severance pay and other rights of the redundant employees.

The consultation process must take place no later than 30 days prior to the collective dismissal. The local Labour Office must be notified as well (see question 3).

The administrative fine for violation of the consultation process with unions is up to 200,000 koruna. Employees who suffer damage as a result may claim compensation.

The employer must provide the union or employee representatives with an economic business rationale as part of the information and consultation process. This may be discussed as part of the information and consultation phase and can be challenged through questions raised by the union or employee representatives. These questions need to be answered to guarantee the validity of the consultation procedure.

Yes, an economic business rationale should be the reason for organisational change, and therefore the redundancy, and as such should be part of the consultation.

There is no requirement or best practice to consult employees individually. At most, the employer must display a copy of the final decision to proceed with the collective redundancy in the company and send a copy of the decision to the employees who have already been made redundant as part of the collective redundancy.

Employees can be consulted collectively in the absence of other social consultation bodies.

In case of collective dismissals, if there are no unions or employee representatives, the employer must inform and directly consult the affected employees to the same extent.

In case of individual dismissal, it is not a requirement, nor best practice, and highly depends on the strategy in the individual case.

In cases of termination for economic reasons (such as a fall in sales or orders), the employer generally has the discretion to decide whom to dismiss, provided that the criteria used are not discriminatory. The dismissal must also not be "manifestly unreasonable". In this context, it is vital to be able to substantiate the existence of an economic business rationale and establish a connection between this rationale and the termination of the individual employee or group of employees (eg, because the employee is part of a department experiencing an actual decline in revenue and will not be replaced after dismissal).

If collective redundancies are involved, selection criteria are chosen by the company. They must be objective and non-discriminatory. Usually, the union or employee representatives refuse to take part in that discussion.

The only rule is that the employee’s position or work must be genuinely redundant (see question 1). If more than one employee fulfils this condition, it is up to the employer which employee to select. However, this choice must not indicate that there are in fact different motives for the redundancy of the selected employee (eg, disputes with the employer, unsatisfactory performance, or gender or other discriminatory motives).

There are no specific categories of employees who an employer is prohibited from making redundant.

Yes, a termination notice due to redundancy is not allowed during the period for which an employee is:

• declared temporarily medically unfit for work or in institutional treatment (unless the employee has intentionally caused this unfitness, or it is a direct consequence of the employee’s alcohol intoxication or substance abuse);
• deployed in military exercises or military service;
• on long-term full leave to act in public office;
• pregnant, or on maternity leave, paternity leave, or parental leave;
• declared temporarily unfit for night work if they perform night work; or
• on leave caring for a child under 10 years of age, treating a child under 10 years of age or other natural persons, or providing long-term care, all as specified in the Czech Sickness Insurance Act.

In Belgium, enhanced protections for employees fall into two categories:

• a ban on dismissal except for serious grounds pre-approved by a court, or for economic or technical reasons previously recognised by competent parity bodies. Specific procedures apply in each case. This concerns employee representatives in the works council, the protection and prevention committee or union representatives if there is no works council or protection and prevention committee; and
• a prohibition on dismissal when the redundancy pertains to the reason for protection, while it remains possible to dismiss for other reasons. This concerns, for instance, union representatives or employees on parental or maternity leave.

Employees on sick leave are not protected as such, but health status is a protected criterion under non-discrimination law. Therefore, an employer cannot make an employee redundant on this basis without objective justification.

Yes, members of a trade union body during their term of office and for a period of one year after the end of their term of office. The employer must have prior consent of the unions for termination of their employment relationship by a notice. Consent is deemed to be given if the unions don’t respond within 15 days. Consent is valid for two months. Termination notice without such consent is invalid unless the court decides in the validity case that the employer could not have been justifiably required to keep the employee.

Redundant employees may be entitled to different payouts:

• compensation in lieu of notice: paid for individual redundancy and collective redundancy just after termination. If the employer does not wish to terminate the contract immediately by paying this compensation, he can instead give a notice of termination as defined by law and depending on the seniority of the employee in the company;
• collective redundancy compensation: paid after the notice period or once the period covered by the compensation in lieu has elapsed; and
• special closure compensation: paid in the event of a business closure, within 15 days after the closure or redundancy.

Compensation for collective redundancy is not paid in a business closure scenario, unlike compensation in lieu of notice, which can be combined with special closure compensation.

A redundant employee is entitled to a statutory severance payment, regardless of whether the employment termination is made by notice or agreement and if the redundancy is explicitly stated as the reason for the termination.

The severance payment is due on the next scheduled pay date following the termination of employment. A later due date can be agreed.

To be eligible for a redundancy payment, additional to normal severance pay, the employee must fulfil several conditions (one year of seniority, contract for undefined duration, etc). The company must employ at least 20 employees during the four quarters preceding the closure, or between 5 and 19 employees if the company was declared bankrupt before closure.

The payment is calculated per year of seniority in the company, with supplementary compensation per seniority year from the age of 45.

To be eligible for compensation for collective redundancy, it must be for economic or technical reasons during a 60-day period and affecting:

• at least six employees if the total number of employees in the company is between 20 and 60; or
• at least 10% if the company has 60 or more employees.

This is paid monthly by the employer after the notice period or the period covered by the compensation in lieu of notice.

The amount of the compensation depends on the duration of the notice period or the period covered by the compensation in lieu:

• for one to three months’ notice (or in lieu), compensation must be paid for four months;
• for four months’ notice (or in lieu), compensation must be paid for three months;
• for five months’ notice (or in lieu), compensation must be paid for two months;
• for six months’ notice (or in lieu), compensation must be paid for one month; and
• for seven months’ notice (or more or in lieu), no special compensation is necessary.

The severance payment amount differs based on the length of the employment as follows:

• one gross average monthly salary of the employee if the employment lasted less than one year;
• two gross average monthly salaries of the employee if the employment lasted at least one year but less than two years; and
• three gross average monthly salaries of the employee if the employment lasted at least two years.

If the working hours account applies (specific working hours distribution scheme under the Czech Labour Code) the statutory severance is the relevant amount above plus three gross average monthly salaries of the employee.

The severance payment may also be higher if stated so by:

• agreement between the parties;
• the employer’s internal regulations; or
• a collective bargaining agreement.

A gross average monthly salary of the employee must be calculated for each employee separately using the specific rules of the Labour Code.

If an employer plans to execute a collective redundancy, not only must the employees' representatives be informed, but also the director of the sub-regional employment service where the company resides and the president of the management committee of the FPS Employment. In this communication, the employer must state the number of employees concerned by the collective redundancy and the reasons for this redundancy. He must also prove that the information and consultation procedure has been conducted properly.

Not in cases of individual dismissals.

In cases of collective dismissals, the employer must notify the relevant branch of the Labour Office:

• of the intention to carry out collective dismissal;
• that the consultation process has been initiated with the unions or the employees; and
• of the specific aspects of the collective dismissal, to the same extent as the unions (see question 6).

Following the consultation, the employer must deliver a written report to the Labour Office stating:

• that the employer has decided on collective redundancies;
• the outcome of the consultation process;
• the number and occupational composition of all employees; and
• the number and occupational composition of the employees to be made redundant.

A copy of the report must be delivered to the unions, which then have the right to comment on it.

During the consultation phase preceding a collective redundancy, the employer must seriously consider the alternatives to redundancy proposed by employee representatives, including suitable alternative employment. They must examine these proposals and explain why they are not suitable, but are not compelled to follow them.

No, generally there is no such obligation. If the conditions for dismissal due to redundancy are met, the employer is not obliged to offer the employee an alternative solution.

However, in some specific individual cases, the courts have concluded that if the employer still needs the work on part-time basis, the employer should first offer the employee this part-time job.

The employer needs to inform the National Office for Social Security that employees have been made redundant and are no longer part of the company via a specific form called the “Dimona out”.

There are no specific notification obligations after making the redundancies. Only general notification obligations, which are the same for all employment terminations, apply.

These general notifications must be made within eight days, using the relevant forms, to: (i) the employee’s health insurance company; and (ii) the District Social Security Administration (including the pension insurance record sheet).

If wage deductions were made to satisfy the employee’s debt to a third party, the employer must notify the relevant court (or tax authority case of tax debt), including an account of the deductions.

Collective claim

The Works Council, the Trade Union Delegation, or the employees themselves (if there is neither a Works Council or Trade Union Delegation), have 30 days to raise objections to the employer regarding non-compliance with the procedure of consultation and information.

The 30-day period starts on the date a copy of the collective redundancy communication is posted to the competent authorities (see question 14).  

During these 30 days, the employer is prohibited from making the employees redundant.

Individual claim regarding the collective redundancy

An individual employee can individually contest the information and consultation procedure if he or she respects the following conditions:

• the objection is made by a registered letter to his or her employer;
• the letter is sent within 30 days from the redundancy date or when the redundancies become a collective redundancy.

An individual claim is only possible if a collective claim has been made by the employee representatives or if the employer does not respect the 30-day period.

Individual claim

An employee can always contest his or her dismissal before the courts, but only for reasons other than the collective redundancy procedure itself.

An employee may challenge the validity of a dismissal for redundancy if they consider that the statutory conditions were not met. First, the employee who wishes to remain employed must inform the employer without undue delay after the termination notice that they insist on continuing their employment. Second, the employee must file a lawsuit at the district court of the employer’s seat (residence or registered address). The lawsuit must be made within two months from the date on which the employment should have ended. After the two months, the right to file the lawsuit expires.

If the dismissal for redundancy is found invalid, the employee who wishes to remain employed remains to be employed at the original position under the original conditions and is entitled to a full compensation of salary for the whole time from the invalid termination until work is assigned again, or until the employment is validly terminated (ie, including the time of the court proceedings). The court may reduce the amount of such compensation if, for example, the employee has found another job in the interim, or could have found one.

There’s no statutory authorisation for unions to raise any claims at the court on behalf of employees except for insolvency proceedings (see question 21). However, only attorneys at law can represent employees fully and without limits in any proceedings. Another natural person can be granted a power of attorney in a specific case (not repeatedly). Theoretically, this could be a member or employee of the unions, but this is not a market standard.

It is not common to use settlement agreements for collective redundancies as very often the employer will negotiate a social plan with employee representatives that provides sufficient safeguards under the form of a company collective bargaining agreement (CBA).

In an individual redundancy, signing a settlement agreement is more common but it will only be accepted if the employee receives an extra payment on top of the legal compensation in lieu of notice.

Yes, it is very common and highly recommended to terminate the employment by mutual agreement when making employees redundant. The termination agreement does not have to state any reasons for termination. However, should the reason be redundancy of the employee, the employee is entitled to statutory severance payment regardless. To motivate the employees to conclude the termination agreement, it is a market standard to offer a higher severance package than the statutory severance payment.

An individual redundancy process can be fulfilled in a couple of days according to the process described in question 2.

As far as collective redundancies are concerned, the situation varies widely. On average, the consultation process with employee representatives takes the longest, at up to 67 days on average.

As far as the whole procedure is concerned, it takes approximately 100 days.

Individual redundancies generally take around two to three months. The organisational change must be prepared, and the termination agreement negotiated or the termination notice given. In case of the notice, the statutory notice period is two months. There’s no statutory notice period requirement in case of agreement, therefore it can be faster. It can also take longer (eg, more complicated cases, restructuring, C-level or other higher managers).

For collective redundancies, the process takes several months (at least three) due to higher demands on preparation, more complicated structuring, the consultation process, and the notification obligation to the Labour Office.

There are no limitations on operating a business for a period following a redundancy, unless it is provided in the social plan.

The same applies to priority for re-employment. Nevertheless, joint committees at the sector level may provide for such re-employment priorities.

The statutory law does not expressly prohibit certain conduct. However, a redundancy means that the employee’s work is no longer needed and therefore any hiring (internal or external) for the same (or largely the same) position should be avoided (or at least thoroughly considered), especially for the two-month period during which the employee can challenge the validity of the dismissal.

In Belgium, according to national CBA No. 9, there is an obligation to inform and consult with the consultative bodies on any major project or transaction and not only when there is an impact of the transaction on employment or working conditions (according to the majority view).

The purpose of the consultation is to reach an agreement between the employer and the employees’ representatives. However, this is only an obligation of means and not of results, so consent is not legally required.

A transfer of business falls under the scope of CBA No. 32bis, which contains specific information and consultation duties under the Transfers of Undertakings (TUPE) directive.

The term “restructuring” in Czech law means one of the ways of resolving a company’s bankruptcy in insolvency proceedings. During this process, organisational changes including redundancies may occur. This kind of restructuring does not require unions’ consent; however, consultation may be required. Further, unions may represent the employees in insolvency proceedings.

In Czech law, “restructuring” within the meaning of a business transaction or corporate transformation or changes (i.e. not a type of insolvency proceeding) can also lead to transfer of rights and obligations from the employment relationship to another employer (transfer of undertakings), ie, the employee and their employment will be transferred to a new employer as a result of such transaction. In this case, the employer must inform the unions or other representatives (and if there are none, then the individual employees) and consult at least 30 days in advance:

• the effective date of the transfer;
• reasons for the transfer;
• legal, economic, and social consequences of the transfer for the employees; and
• measures to be taken in relation to the employees.

In case of cross-border mergers or spin-offs, the employer also must: (i) inform the employees or unions of their right to get acquainted with the written merger or spin-off project and give written comments on it; and (ii) generally reach agreement with unions regarding the extent and manner of the right of influence of the employees of the successor corporation (for example, in certain cases by electing a certain number of members of supervisory board in a joint stock company) if the seat of the newly formed entity is supposed to be in the Czechia. Further corporate obligations depend on the form of such restructuring.

However, the described labour law obligations don’t apply in the case of mere ownership change of the employer’s company where this has no direct legal implications for the employees (ie, it isn’t a transfer of undertaking or a termination reason).

For collective redundancies, as previously mentioned, the information and consultation procedure should be followed by the employer. If they do not, a collective claim followed by individual claims can be made, forcing them to restart the procedure.

For business transfers, there is no specific remedy forcing the employer to inform and consult employees’ representatives before a transfer.

In both cases, interim orders could be sought before the labour tribunal to compel the employer to follow the information and consultation procedure before reaching a decision. If the decision has already been made or executed, the employees could also ask for damages based on common law.

Finally, non-compliance with consultation duties can be punished by a criminal or administrative fine according to the Social Penal Code, but it is rarely prosecuted.

In general, employees have limited ability to influence the process of business transactions. The consultation process (see question 21) doesn’t have to result in an agreement with or of the unions. The administrative fine for violation of the consultation process is up to 200,000 Czech Koruna. If there are no unions and the employer breaches its information obligation towards the individual employees (see question 21), the law provides no administrative penalty. In each case, the employee could claim compensation for damage if any damage occurred.

If there is a transfer to a new employer, including when the transfer does not involve a legal entity or a complete business unit but only part of that entity or unit, there is no special protection. However, employees' rights are automatically transferred to the new employer and are still protected.

A change of employer, by itself, does not constitute valid grounds for dismissal by either the transferor or the transferee. Employees who transfer from one employer to another may still be dismissed, but only for a serious reason or for economic, technical, or organisational factors that require such a change.

Furthermore, if employees have been unlawfully dismissed by the transferor shortly before the business transfer, or are not taken over by the transferee, they may lodge a claim against the transferee or the transferor, asserting that their dismissal was unlawful and claim an indemnity from unreasonable dismissal, ranging from three to 17 weeks of remuneration.

If the statutory conditions for transfer are met, the transfer occurs automatically, ie, neither the original employer, the new employer, the employees, nor the unions can avoid the transfer. An employee may prevent their own transfer only by serving termination notice to the employer before the transfer’s effective date, in which case the employment terminates on the day immediately preceding the transfer’s effective date at the latest. If the employer didn’t inform employee at least 30 days in advance (see question 21), the employee may serve their termination notice within two months after the transfer’s effective date – in which case, only a 15-day notice period applies.

Individual rights and obligations are transferred in full to the new employer. The rights and obligations under the original employer’s collective agreement are also transferred to the new employer, but only for the duration of the collective agreement, and for no longer than to the end of the following calendar year.

Transfer itself is not a statutory reason for terminating the employment. However, a restructuring (organisation change) leading to redundancy may happen before, during, or following the transfer. In such a case, the employee has the same rights as in the case of other redundancies.

If the employee terminates the employment by a notice or by an agreement within two months of the effective date of the transfer, they may raise a claim at court that the reason for termination was a substantial deterioration in working conditions caused by the transfer. If the court confirms it, the employee will be entitled to statutory severance (see question 13).

For a business transfer, there is no specific procedure to be followed except for the information and consultation of the employee’s representatives both by the transferor and the transferee before the transfer is formally decided upon. If there are no consultative bodies in the company, employees should be informed but not consulted. Employment contracts are automatically transferred and should not be altered.

For a transfer of employment between group companies and therefore without a transfer of business, the transfer of employment contracts is not automatic. Consent of the employees concerned will be needed and a new contract should be signed. If the transfer of employment alters the group companies’ structure in a significant manner, information and consultation of the employees’ representatives should take place before the decision to transfer is formally made.

Since the transfer of rights and obligations under employment law occurs automatically, it is generally sufficient to follow the legally prescribed procedure for a given business transfer. In addition, it is necessary to comply with the information and consultation obligation (see question 21). Further, general reporting and notification obligations to the state authorities apply.

CBA No. 32bis stipulates that the rights and obligations arising from the employment contracts are automatically transferred from the transferor to the transferee. There are no specific rules concerning harmonisation, but the transferee may adapt working conditions under common labour law. Changes to employment contracts may be negotiated at either an individual level or a company CBA may be concluded. It is recommended to gradually harmonise working conditions over time, and not force harmonisation immediately after the transfer.

The working conditions of the transferred employees cannot substantially worsen. If this were to happen and the employee gave termination notice within two months of the transfer, the employee could claim statutory severance (see question 23).

In addition, the employer must comply with the general principle of equal treatment and ensure equal treatment of both the original and new employees in terms of their working conditions, remuneration, and other benefits, training, and the possibility of promotion.

Essential elements of the employment contract cannot be altered unilaterally by either the employer or the employee. Working hours, pay and benefits are essential elements of the employment contract. Therefore, any changes to these elements require the agreement of the other party involved.

If the hours, pay, or benefits are agreed in the employment or other contract, then no unilateral change can be made.

Working hours – either statutory weekly working hours apply (40 hours per week) or shorter working hours are agreed. In either case, the employer determines the distribution unilaterally (subject to complying with statutory rules and limits) unless agreed differently.

Salary – if it isn’t agreed in the employment or other contract, the employer unilaterally determines the salary by an internal regulation or by a salary statement.

Benefits – if they aren’t agreed in the employment or other contract, the employer unilaterally determines the benefits by an internal regulation or by a salary statement.

An express contractual provision may be inserted into the contract to allow a variation of employment terms, but such a clause can never pertain to essential components of the employment contract, such as working hours or remuneration.

As for employment terms and conditions in general, if these have been agreed in the employment or other contract, they can be changed only by agreement. Validity of express contractual provision to vary the conditions depends on its structure and which conditions it concerns, and therefore there’s no generally applicable answer to the question.

The Labour Code further allows, in certain cases, a change in type of work, workplace, or employer by a temporary transfer of an employee to a different work position, workplace, or employer. Generally, consent is required; however, in certain cases, the employer can (and in very specific cases, has to) make a temporary transfer unilaterally (for example, if the employee is medically unfit to perform the agreed type of work, or to avert imminent danger). The employer must adhere to strict statutory conditions.

An employment term may be varied by implied conduct, provided that this conduct may clearly be interpreted as expressing a will to change employment terms. An employee who adopts such conduct without wanting to vary contractual terms should say so to the employer very quickly after the change has been implemented.

Yes, the employee and the employer may agree on certain changes and variations implicitly. However, it is recommended to avoid such situations.

If an employee refuses to agree to a proposed change, the employer may try to rely on their ius variandi. This unilateral right to modify employment terms is strictly confined to ancillary elements for which the parties have expressly allowed modification (contractual ius variandi) and non-agreed working conditions (extra-contractual ius variandi). This right must be exercised reasonably and is always subject to judicial oversight for good faith and the prohibition of abuse.

If agreement is required to vary an employment term or condition, then the only option to vary it is an agreement.

The employee may challenge an employer who varies employment terms unilaterally as follows:

• if the change is important and concerns an essential element of the contract, they may interpret the unilateral change as constructive dismissal and ask to receive compensation in lieu of notice;
• ask for the forced performance of the employment contract under the terms of that contract;
• request the payment of damages for the contractual breach committed;
• ask the court to terminate the contract on the grounds of serious misconduct on the part of the employer.

If varied unilaterally in a case where agreement was required, the employee may challenge the variation (depending on the situation, by demanding the employer to: refrain from such conduct, restore the original terms, or compensate the employee for the damage caused by such conduct). Depending on the situation there could also be a risk of administrative penalties.

The Delhaize case

On 7 March 2023, Delhaize's management announced its intention to franchise 128 of its directly managed stores and to transfer the staff of these stores to future franchisees by relying on the legislation on the transfer of business. Works Council meetings were held by the management of Delhaize but no agreement could be reached with employees’ representatives.

The Delhaize Group persists in its intention, despite strong opposition from unions who have organised strike after strike. They argue that the company should retain control over the stores, as a way to preserve the wages and social benefits of employees. Unions are afraid that by transferring the stores to franchisees the employees will fall under the scope of a different joint committee where working conditions are less attractive. Even though working conditions should remain the same in the short term considering TUPE legislation, unions are afraid that in the longer term working conditions will be scaled back and employees will be dismissed, especially considering that employees usually do not enjoy proper representation of their interests in such smaller structures.

The situation has raised critical questions, such as whether wide-scale franchising should be more heavily regulated to protect employees, especially when different joint committees are involved, or whether entrepreneurial freedom should take precedence.

We believe that this situation could lead to legislative changes concerning collective redundancies or business transfers in the years to come.

The Czech parliament is currently debating several changes in the area of labour law. However, none of the currently debated changes should affect the answers above.