Guide to Restructuring a Cross-Border Workforce

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.

Yes. Under Lao law, it is possible to dismiss employees for economic reasons. The concept of redundancy is regulated by the Law on Labour No. 43/NA, dated 24 December 2013 (the Labour Law), which defines the term as a reduction of the number of workers for business reasons.

Article 82 of the Labour Law provides for a reduction in the workforce when “the employer/company considers it necessary to reduce the number of workers in order to improve the work within the labor unit after consulting the trade union or employee representative or the majority of employees and has reported to the Labor Administration Agency (LAA)”. A dismissal for this reason constitutes a termination of the employment contract by the employer or company for economic reasons.

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).

Under Article 82 of the Labour Law, if the employer or company wishes to terminate an employment contract for business reasons, including making an employee redundant, the employer or company must provide an appropriate reason, ie, that it is necessary for the employer or company to reduce employee numbers to improve work within the labour unit. There is no guidance as to what constitutes “an improvement” within the labour unit, so there is leeway for an employer to invoke Article 82 to terminate employees for economic reasons.

The employer must consult with the labour unit, trade union, and/or employee representatives, and provide explanation related to business or economic issues affecting the company. The termination of the employment contract must also be notified to the LAA before termination of the contract. The employer is also obliged to give employees who undertake physical labour 30 days’ advance notice, and employees who undertake mental labour 45 days’ notice, along with reasons for the termination.

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.

There are no specific provisions for collective redundancies. Accordingly, whether one or multiple employees are made redundant, the process set out in question 2 above must be followed.

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.

As stated above, employers must consult with the trade union and/or employee representatives during the redundancy process, and notify the LAA in writing. According to Article 82 of the Labour Law, there is no requirement to reach an agreement with the union or employee representatives by the end of the consultation.

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).

Under Lao law, even if the parties have not yet reached or cannot reach agreement, the company may proceed with the restructuring. Employers are not required to wait for the finalisation of any dispute between the employer and employee.

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.

As stated in question 2, before terminating an employment contract, the employer must:

• give the employee 30 or 45 days’ notice, depending on the nature of the work, along with reasons for the termination;
• consult with the labour unit, trade union, and/or employee representatives;
• provide evidence of business or economic issues affecting the company; and
• report the business reasons for termination to the LAA.

The Labour Law is silent about sanctions for failing to comply with the consultation obligation. Under the Decree on Labour Conflict Resolution No. 76, dated 28 February 2018, employees, individually or collectively, are entitled to seek administrative remedy by filing a complaint with the relevant agency under the Ministry of Industry and Commerce for disputes in relation to their employer’s breach of the law or internal regulations. We understand that failing to complete the consultations may also be subject to an administrative remedy.

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.

According to Article 82 of the Labour Law, employers are required to present an economic business rationale as part of the consultation with unions or employee representatives. If an employer wishes to terminate an employment contract for business reasons, the employer must have an appropriate reason, ie, that it is necessary for employers to reduce employee numbers to improve work within the labour unit. During consultations with the labour unit, trade union, and/or employee representatives, the employer must produce evidence related to business or economic issues affecting the company. The business reasons for termination of the employment contract must also be reported to the LAA before termination of the contract.

Lao law is silent on the possibility of challenging an economic business rationale. In the same vein, the Labour Law does not suggest that the union or employees have the right to oppose redundancy. In theory, if employees, employees’ representatives, or trade unions are not satisfied with the business rationale provided by the employer, they may file an administrative action as mentioned in question 6.

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.

Under Lao law, there is no requirement to consult with employees individually, nor is it general practice or prohibited. Accordingly, if an employer chooses to consult with an employee individually, in addition to its other consultation obligations, the requirements set out in question 2 must still be met.

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).

In Laos, employers are entitled to exercise their discretion in selecting individual employees for redundancy, as there are no specific regulations governing this aspect of employment law. However, employers’ discretion must still be exercised reasonably and in accordance with the principles of good faith and fair dealing. Employers must ensure that the selection criteria used to determine which employees are made redundant are objective, transparent, and free from any form of discrimination or bias.

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.

Article 87 of the Labour Law prohibits employers from terminating the employment contracts of employees who fall within the following categories:

• pregnant or have a child below one year of age;
• undergoing medical treatment or rehabilitation, substantiated by a medical certificate;
• an employee representative or the head of a trade union;
• involved in legal proceedings or detained and awaiting a judicial decision;
• injured and undergoing medical treatment, substantiated by a medical certificate;
• recently experienced a natural disaster;
• on annual leave or on other leave with the permission of the employer;
• working in another location after being assigned by the employer; or
• in the process of making a claim or taking legal action against the employer, or cooperating with government officials in a claim or legal action against the employer.

If employers wish to terminate contracts of employees that fall in any of the categories above, the employer must obtain approval from the LAA.

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.

There is no enhanced protection other than that set out in question 10. If an employer fails to obtain approval from the LAA before terminating employees in the categories set out in question 10, the terminated employees would be entitled to lodge an unauthorised termination claim against the employer.

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.

An employee who has been made redundant is entitled to:

• their normal salary up to the date of the redundancy;
• payment in lieu of any unused annual leave or any benefits due in accordance with Article 57 of the Labour Law;
• a certificate of employment;
• severance pay in accordance with Article 90 of the Labour Law; and
• payment in lieu of notice if the employer elects to terminate the employment with immediate effect.

As mentioned above, employers are required to provide employees who perform physical labour with at least 30 days’ advance notice of termination, and employees who perform mental labour with at least 45 days’ notice, along with an explanation for the termination.

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.

Under the Labour Law, an employee whose employment has been terminated due to redundancy is entitled to a severance payment, as in the case of no-fault based termination, equal to 10% of the employee’s last monthly salary prior to termination multiplied by the number of months worked for the employer.

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.

Employers are required to notify the LAA in the Labour and Social Welfare Department in the Ministry of Labour and Social Welfare by submitting a proposal, a report on redundancies, and minutes of meetings related to the redundancies. The process would typically be as follows:

• Before implementing any redundancies, the employer holds a meeting with the employee representatives, the majority of the employees, or the trade union. The draft of the minutes of the meeting must be signed by the head of the company and other attendees.
• The company must notify the LAA in the Labour and Social Welfare Department and submit the proposal, report, and minutes of the above meeting.
• The LAA in the Labour and Social Welfare Department receives and reviews the notification from the employer regarding the reduction in employee numbers.
• At the same time, the employer must provide the employee with written notice of termination of 30 or 45 days, depending on the nature of the work, together with an explanation of its decision (ie, termination for operational requirements).

In the written notice of termination, the employer may request that employees refrain from continuing their respective work during the notification period unless instructed otherwise. The employer may also elect to terminate the employment with immediate effect, in which case it is obliged to make payment in lieu of notice, in addition to other statutory payments (ie, salary, severance payments) and benefits to the employees. The notice of termination must include details of the severance payment and other benefits, as well as information on the date payment will be made, taking into account that it must occur on or before the effective date of termination of the employment contract.

• The employer must pay severance and other benefits as specified in the employees’ respective employment contracts or the company’s internal regulations.
• The employer must issue work certificates to the employees indicating the employees’ start date, date of cessation of work, and position, within seven days of the date of termination of employment. Employees may also request certification of their respective salaries and work performance.

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.

There is no obligation for employers to consider alternatives to redundancy. Offers of alternative employment are not obligatory but may be made at the employer’s discretion.

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.

Employers are not required to notify local, regional, or national government or regulators after making redundancies. As mentioned above, Article 82 of the Labour Law requires notification to the LAA prior to a redundancy.

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.

As noted in question 5, if an employee is not satisfied with the decision to make them redundant, the employee can lodge a claim for damages with the court. The union and employee representatives can bring a claim on behalf of employees in accordance with the Decree on Labour Conflict Resolution.

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.

It has been our experience that the majority of redundancies are not settled between the parties.

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.

The redundancy process, as set out in question 14, can take one to two months to complete after the employer has given notice of their intention to terminate the employment contract due to redundancy.

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.

There are no limitations on operating a business for a period following a redundancy under Lao law. Accordingly, employers can hire new employees or rehire previous employees at their discretion.

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).

Under Lao law there is no requirement to consult on or obtain consent for major transactions such as business transfers, mergers, acquisitions, disposals, or joint ventures. However, if an employer wishes to terminate an employment contract due to a major transaction, advance notice is required. The advance notice must be provided to the employee at least 30 days in advance for contracts involving employees who perform physical labour, and at least 45 days in advance for contracts involving employees who use intellectual or special skills.

If there is no change in the number of employees due to the major transaction, advance notice to employees is still needed to give them the opportunity to decide whether they would like to continue their employment or terminate their employment agreement due to the major transaction.

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.

As noted in question 21, there is no requirement to consult. However, the employees may choose to terminate their employment due to the reorganisation of the business. There are no legal provisions enabling employees to prevent business operations from proceeding.

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).

Under Lao law, there is no statutory protection of employees on a business transfer.

Lao law does not define whether employees are automatically transferred with the business. Article 84 of the Labour Law states that when transferring a business, the original employer and the new employer must clearly determine their responsibilities to employees – for instance, who will be responsible for paying compensation to employees if the employer terminates employment due to the transfer of the business.

There is no protection of employees against dismissal. If the employer wishes to terminate the employment contract, compensation must be paid to the employees.

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.

There is no legally prescribed procedure for a transfer of employment upon a business transfer or within group companies. If the name of the employer changes, amendments of certain documents may be required. For instance, for foreign employees’ work permits or stay permits, or if the business mentions the name of the employer.

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.

There are no statutory rules governing the harmonisation of the transferring employees’ terms of employment with the existing employees’ terms of employment. However, if employees remain employed after the transfer, their employment terms may remain the same or be harmonised by agreement between the employer and employee.

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.

According to Article 51 of the Labour Law, normal working hours cannot exceed six days per week and eight hours per day, or 48 hours per week, regardless of the type of salary or wage. In addition, the law provides that the normal working hours for high-risk occupations may be reduced as appropriate.

An employer cannot reduce an employee’s salary or benefits without the employee’s consent. Changes to wages and benefits must be mutually agreed upon between employers and employees.

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.

The Labour Law does not prohibit employers from changing a term of an employment contract on the basis of an express contractual provision. However, employers cannot rely on an express contractual provision to vary an employment term if the provision is beneficial solely to the employer. According to the Lao Civil Code, contracts must be for the mutual benefit of both parties. If any term of a contract causes any party to be disadvantaged, the contract may not be legally binding.

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

Lao law neither prohibits not permits changing employment terms by implied conduct. Nevertheless, a change of employment terms by implied conduct may be acceptable if the employer and employee agree to it and both parties benefit from the change.

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

Amending employment terms and conditions requires agreement between employer and employee. If the parties cannot reach an agreement, the employer can submit a proposal letter to the Labour Management Division of the Labour and Social Welfare Department to resolve the issue. That said, employees are not obliged to accept amended employment terms.

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.

There is no clear sanction under Lao law for an employer unilaterally amending an employment term. That said, amendments to employment contracts must be agreed to by both parties. Also, if the employer violates the employment contract after receiving a prior protest from the employee or employee representative but does not resolve the situation or make any changes, the employee may be deemed to be forced to resign, entitling the employee to severance payment for unjustified termination (15% of the last salary multiplied by the number of months worked).

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.

The Prime Minister’s Office of Laos recently issued a Notice on the Increase of the Minimum Wage for Workers in Laos, which takes effect on 1 October 2023. This is the third increase in the minimum wage since 2022. There may be additional notices to increase the minimum wage in the near future, as the depreciation of the Lao kip against foreign currencies and inflation in the price of goods for daily consumption has resulted in a proactive approach by the government to address the cost-of-living crisis in Laos and its effect on low-wage workers.