It is not always possible or optimal for employees and employers to conclude a "classic" employment relationship with all its advantages and pitfalls. At the same time, whether it is an advantage or a disadvantage in a specific case differs depending on the point of view of the employee and the employer, who are completely opposite. What is a welcome sign of the employment relationship for the employee is thus an unpleasant fact for the employer, which he has to respect, even if he doesn't like it. A typical example is all the protective/restrictive rules regulated by Act No. 262/2006 Coll., the Labor Code, as amended (hereinafter referred to as the "Labor Code" or "ZP") upon termination of an employee's employment by the employer or rules regarding working hours . If the employee is to perform dependent work to the extent corresponding to the specified weekly working hours (in single-shift work it is 40 hours per week) or rapidly approaching this specified weekly working time, the parties to the employment relationship do not have the opportunity to consider another form of employment than the employment relationship itself . What opens the employer up to the possibility of using agreements outside the employment relationship is precisely the need to perform work in a limited time frame.
Although the Labor Code states that the employer must ensure the fulfillment of its tasks primarily by employees in an employment relationship, it no longer regulates the strict obligation to give priority to the employment relationship supplemented, as before, with conditions that must be met in order for it to be possible to perform work on the basis of an agreement in a given situation outside the employment relationship. Agreements outside the employment relationship are the agreement on work activities (hereinafter referred to as the "DPČ") and the agreement on the performance of work (hereinafter referred to as the "DPP").
The basic difference between them lies in the different limits of the scope of work performed on their basis. While in the case of DPP, 300 hours per calendar year may not be exceeded, within DPČ it is possible to perform work to an extent not exceeding on average half of the specified weekly working hours at a specific employer (for an employer with single-shift operation and a classic 40-hour specified weekly working time, it will be 20 hours per week). With DPP, it is not a condition that it be agreed for the performance of certain time-limited work or a specific work task. Just like DPČ or an employment relationship, DPP can be concluded for the performance of regular recurring activities (e.g. administrative work, etc.).
The main advantage of the institute of agreements on work performed outside the employment relationship is their flexibility, as the Labor Code regulates a number of substantial exceptions for them from the application of the rules applicable to the employment relationship, which will be discussed further. The protection of employees is then determined by the limit of the scope of work carried out within the framework of agreements outside the employment relationship.
As for the list of mandatory elements of agreements, the Labor Code is relatively brief. Both agreements must be in writing. Only the period for which the agreement is concluded must be stated in the DPP. It is logical that the DPP should contain a specification of the work to be performed (which is primarily in the interest of the employee to know what he is committing to). However, the specification of work is not listed among the mandatory requirements of the DPP. The agreed work, the scope of working hours and the period for which the agreement is concluded must be stated in the DPČ. Not even one of the agreements need to state the details that must be adjusted in the employment contract establishing the employment relationship (starting day and place of work performance). When listing agreements, it is not possible to omit § 138 of the Labor Code, according to which the amount of remuneration from the agreement and the conditions for its provision are negotiated in the DPP or in the DPČ (however, this is not a mandatory requirement of the agreements). However, in the interest of the certainty of both parties to the agreement, it is more than appropriate to adjust other rules beyond the mandatory requirements, on the basis of which the employee undertakes to perform the work and the employer rewards its performance.
Scope of work and duration of agreements
Both the DPP and the DPČ must state the period for which this agreement is concluded. It is necessary to distinguish between the indication of the duration of the agreement and the indication of the scope of work that will be performed under it. The duration of the agreement can be negotiated as definite (i.e. limited in time - by duration until a certain date or otherwise - e.g. by the performance of a certain work task) or as indefinite. If the agreement (both types) will be concluded for a fixed period, the prohibition of chaining of employment does not apply to them (the so-called three-times-is-enough rule), so agreements can be concluded repeatedly. If the agreement will be concluded for an indefinite period, it is recommended that the employee and the employer consider the possible ways of its unilateral termination when concluding it (the agreement can terminate any employment relationship at any time). Sometimes it is possible to come across the opinion that DPP can only be concluded for a certain period of time, namely for a maximum period until the end of a specific calendar year. This opinion is derived from the limit of work that can be performed on its basis (300 hours), which is assessed precisely over the period of one calendar year, and is completely wrong. It is also possible to conclude a DPP for an indefinite period or for an otherwise limited fixed period (which can subsequently be contractually extended).
The maximum scope of work performed on the basis of DPP is 300 hours per calendar year. At the same time, work carried out within the same calendar year for the same employer on the basis of another DPP must also be calculated into the included scope of work (it does not matter whether it is, for example, two parallel DPPs for a different type of work or two subsequent DPPs with the same type of work - it adds up with everything). If the employee had concluded another DPP with another employer, this is of course not taken into account and the second of the agreements is not included in the limit for either employer.
The scope of work based on DPČ is limited by half of the set weekly working hours, and not fixedly, i.e. within each week, but on average over the equalization period. The equalization period is defined by the period for which the DPČ was negotiated, but a maximum period of 52 weeks. Compliance with the limit must be checked in accordance with the rule set out in § 350a of the Labor Code, according to which a week is understood as 7 consecutive calendar days. Within each period of 364 consecutive days of the duration of the DPČ (if the DPČ is closed for such a long or longer period), the rule must be observed according to which the number of hours worked in one week is, on average, a maximum of half of the specified weekly working hours for a specific employer (as already mentioned, it is usually 20 hours, but it can also be a lower number if the specified weekly working hours at the employer are shorter). Logically, an employee can work more in one week if he works less in another, so that the average is based on the mentioned mechanism. Of course, it is not possible to circumvent the legal limit by purposefully agreeing to a DPČ for a longer period than the actual need for work (e.g. for a period corresponding to the maximum equalization period, i.e. 52 weeks) and the employee would then only work for the first half of the duration of the agreement (actually full-time) with the intention of reaching half of the set weekly working hours at the end of the compensation period. On the contrary, the situation should not be considered circumvention of the law when, during the period for which the DPČ was concluded, the DPČ is terminated in accordance with the law (e.g. by the employee) and during the final assessment of the scope of work performed, it is found that due to a shorter ( than the originally planned) settlement period, the limit of half of the specified weekly working hours will be exceeded.
Furthermore, when assigning work, the employer must respect the rule that work performance does not exceed 12 hours in 24 consecutive hours. This rule also applies to DPP. Unlike DPP, it does not apply to DPČ that work performed by an employee for the same employer on the basis of another DPČ is also included in the maximum scope of work. Theoretically, an employee can perform work for the same employer within the scope of the full set weekly working hours, but it must be two (or more) completely different types of work performed on the basis of two (or more) separate DPČ. It is obvious that if the employer tried to circumvent the maximum scope rule by concluding two or more DPČ with one employee, but in fact the employee would perform only one and the same type of work, this would be a circumvention of the law and the employer would thus risk punishment for exceeding the specified limit.
Exceeding the established limits may mean the fulfillment of the substance of the offense in the section of the employment relationship or agreements on work performed outside the employment relationship (the employer does not ensure that the employee does not exceed the scope of work performed on the basis of DPP or DPČ established by the Labor Code). For this offence, according to § 12 paragraph 2 letter c) and § 25 paragraph 2 letter c) Act No. 251/2005 Coll., on labor inspection, as amended, fines employers up to CZK 2. Exceeding the specified limit of the scope of the work performed will certainly not invalidate such an agreement or its automatic termination, as appears in some opinions (as already stated, the duration of the agreement and the limit of the scope of work are two completely different facts).
Exceptions to employment
The flexibility of the relationship established by DPČ or DPP is made possible by exceptions to the rules regulated by the Labor Code for the employment relationship. The list of exceptions contains the provisions of § 77, paragraph 2 of the Labor Code. It is possible for the parties to agree that these exceptions or some of them will also apply to the employment relationship between them, but then it is necessary for them to adjust the conditions of their application for each of them specifically and while maintaining the basic principles of employment relationships regulated in § 1a of the Labor Code. The regulation for the performance of work in an employment relationship applies to work performed on the basis of agreements outside the employment relationship, with the exception of:
(i) transfer to other work and reassignment,
(ii) temporary assignment,
(iii) severance pay,
(iv) working hours and rest periods; however, performance of work based on agreements may not exceed 12 hours in 24 consecutive hours,
(v) obstacles to work on the part of the employee,
(vi) holidays,
(vii) termination of employment,
(viii) remuneration (hereinafter referred to as "remuneration from the agreement"), with the exception of the minimum wage, and
(ix) travel allowances.
The scope of this article does not allow detailing all the exceptions. So, we will focus on the main ones, thanks to which the relationship from the agreements is rightly called flexible.
Termination of agreements, severance pay
Both agreements and the employment relationship can be terminated at the will of both parties by agreement. However, if the employer wants to terminate the employment relationship and the employee does not agree to the termination, the employer can only use a few options offered by the Labor Code to terminate the employment relationship. Leaving aside the termination of the employment relationship during the trial period, which the employer can do even without giving a reason (if it fits into the agreed trial period), he has at his disposal notice of termination and immediate termination of the employment relationship. Both of these methods are tied to the reasons listed in the Labor Code, which must be given in the given case, otherwise such legal action by the employer will be invalid. A typical and probably the most common solution to a situation where the employer either really no longer needs the employee, or is dissatisfied with him, but is unable to document or even specify concrete evidence of the causes of his dissatisfaction, is dismissal for so-called organizational reasons. However, the employer must also be able to demonstrate the existence of organizational reasons and time the termination correctly, and this is not always possible (e.g. if he gives notice prematurely in such a way that the employment relationship is to end at a time when the organizational change is not effective, or if he actually wants to replace one employee with another person, i.e. he is still able to assign specific work because he needs it for his activity). Termination of the employment relationship for organizational reasons is then associated with the employer's obligation to pay the employee severance pay and the notice period must be observed, which by law is at least two months (a longer period may be agreed in the employment contract).
However, the employer does not need to search for or prove the existence of such a reason for the dissolution of the DPČ or DPP. The Labor Code allows the employee and the employer to agree on the way to terminate the relationship based on agreements at their discretion. If they do not agree, it applies that, in addition to the agreement, the relationship established by both DPČ and DPP can be terminated by termination for any reason or even without giving a reason (i.e. only the wording: "I hereby terminate the agreement on work activities/on the performance of work") is sufficient. , with a fifteen-day notice period beginning on the day the notice was delivered. In DPČ and DPP, the Labor Code allows for the possibility of immediate cancellation to be negotiated. However, this allows binding only in cases where the employment relationship can also be terminated. Therefore, if the method of terminating the agreement is not negotiated directly between the employee and the employer, either party can terminate the agreement by giving notice in a significantly shorter period of time than is the case with an employment relationship, and the employer does not have to search for and prove the reason why he did so. The employee will only be entitled to severance pay if it is directly agreed in the agreement (or in the collective agreement or in the employer's internal regulations).
Remuneration, travel allowances
The amount of remuneration from the agreement is regulated in the agreement, as already said above. The provisions of the Labor Code on the remuneration of an employee in an employment relationship do not apply to the relationship from the agreements, with the exception of the provisions on the minimum wage (where it must be taken into account that the minimum wage set by Government Regulation No. 567/2006 Coll., as amended, refers to work within the scope of the specified weekly working hours, i.e. 40 hours per week). If the remuneration from the agreement does not reach the minimum wage, the employer will provide the employee with a supplement to the remuneration. Remuneration can be negotiated monthly, hourly or as a result of the completion of individual work tasks. The employer is not obliged, without an express agreement with the employee (or an obligation in the collective agreement or internal regulations), to pay the employee any additional payments to the remuneration that the employee could otherwise claim if he were in an employment relationship (for working overtime, on holidays, Saturdays and Sunday and others). When negotiating or determining (if the remuneration was not negotiated, but determined unilaterally by the employer) the amount of the remuneration from the agreement is bound by the obligation stipulated in § 110, paragraph 1 of the Labor Code, according to which all employees of the employer are entitled to the same remuneration for the same work or work of equal value wage, salary or remuneration from the agreement. It is therefore not possible for two employees performing completely comparable work to receive a different amount of salary/remuneration just with reference to the fact that they are different types of employment relationship. The same conclusion can also be drawn from § 16 of the Labor Code (obligation to treat employees equally).
Travel allowances can only be provided to an employee working on the basis of agreements on work carried out outside the employment relationship if this right has been agreed upon. For this purpose, however, it is necessary to arrange the place of the employee's regular workplace at the same time (leaving the employee for the purpose of fulfilling work duties gives rise to the right to travel allowances). If the employee has the right to travel allowances agreed in the DPP, he is entitled to them if he leaves the municipality of his residence while performing work tasks (and therefore there is no need to negotiate a regular workplace).
Working hours, holidays
A very significant exception to the employment relationship is contractual freedom regarding the working hours of employees. The employer is not obliged to schedule the working hours of employees working for him based on agreements (and the employee, on the other hand, does not have the right to assign work to the extent of such scheduled working hours). Quite often, the obligation of employees to come to work is negotiated under so-called on-call agreements (that is, the employer calls them to work only when they need their work). It is therefore up to the employee to negotiate the conditions under which he will learn that he has to do the work and to what extent. The employer is limited only by the already mentioned rule that work performance may not exceed 12 hours in 24 consecutive hours.
The application of the holiday provisions is also excluded. However, nothing prevents the employee and the employer from negotiating the employee's right to leave in the DPČ or in the DPP.
Obstacles at work on the part of the employee
Unless otherwise agreed, an employee does not have the right to work leave or compensation in the event of so-called other important personal obstacles at work under DPČ and DPP (Section 199 of the Labor Code). However, the Labor Code stipulates that, even within the framework of agreements, the regulation according to § 191 to 198 and § 206 of the Labor Code must be observed, i.e. the obligation of the employer to excuse the employee in the event of important personal obstacles at work (temporary incapacity, maternity and parental leave, care for a member of the household and in other cases specified in § 191 of the Labor Code). During the first 14 calendar days of temporary incapacity for work (or quarantine), employees working on the basis of DPČ or DPP are entitled to compensation from the agreement under the conditions set out in Sections 192 and 193 of the Labor Code. For the purpose of providing this compensation, the employer must formally determine the distribution of the employee's working hours into shifts. It can be a little confusing, but it is really just a formal schedule, which is not the basis for the employee's work, but only for the purposes of calculating compensation (how the employer schedules the working hours will affect the payment of compensation in case of incapacity for work). Of course, it is a good idea to set the schedule according to the actual assumption of the employee's need for work, so that subsequently the employer does not pay compensation for days on which he would not actually need the employee.
What should the parties consider when entering into an agreement
In conclusion, we offer a demonstrative list of requirements for which we consider it appropriate to be included in a work agreement outside the employment relationship, or that both sides of the DPČ or DPP at least consider their negotiation when concluding the agreement (the view on the appropriateness of including a specific agreement will of course differ between the employee and the employer):
- type of work performed (mandatory for DPČ)
- scope of work (mandatory requirement for DPČ)
- place of work (especially practical for employees)
- duration of the agreement – definite or indefinite (mandatory for both agreements)
- possible schedule of working hours for the purposes of actual work performance (practical for employees, binding for employers)
- conditions and methods of termination of the employment relationship (if not agreed, the law applies, i.e. the possibility of termination by agreement and termination with a fifteen-day notice period)
- the amount of remuneration from the agreement and its maturity
- possible travel allowances, including a regular workplace at the DPČ (advantageous for employees)
- possible entitlement to severance pay (favorable for employees)
- the employee's possible right to so-called other important personal obstacles at work (advantageous for the employee)
Outside of the framework of the agreements, it is then necessary for the employer to determine the formal distribution of weekly working hours into shifts for the purpose of providing remuneration in case of incapacity for work (Section 194 of the Labor Code).
Even within the framework of agreements outside the employment relationship, work can be performed during which the employee can manage the values that he is obliged to account for (typically cash, goods, material stocks). In such a case, it can only be recommended to conclude a liability agreement to protect the values entrusted to the employee for accounting (Section 252 et seq. of the Labor Code). In the same way, § 255 of the Labor Code can be applied to agreements outside the employment relationship, increasing the responsibility of the employee for things entrusted to him for the performance of work based on written confirmation.
Source: epravo Magazine 3/2018
