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COUNTRY OVERVIEW

No substantial national debate on transposition.

For further information on the SE legislation, such as the choice of SNB members, click on the more button.

There was no substantial national debate on the transposition of the directive into national law, although the issue of European companies has been seen as potentially important for the Czech Republic, as it could hope to attract some companies to move their head offices there. The Czech Republic also has its own domestic legislation providing for employee board-level representation in a wide range of companies. In the detailed discussions, while the unions attempted to extend employee’s rights as far as possible, the employers were concerned to keep them as limited as possible.

Form of transposition

Directive was transposed by law in November 2004, just after the October 2004 deadline.

The directive on employee involvement in European companies was transposed through the following legislation dated 11 November 2004: 627 – Act of 11 November 2004 on the European Company (Zákon č 627/2004 Sb. ze dne 11. listopadu 2004 o evropské splole č nosti).The legislation was in two parts: part one dealt with changes to Czech company law to adapt it to the Regulation on European companies; part two dealt with the involvement of employees in European companies.

Special negotiating body (SNB)

Selection of national members

Czech members of the SNB are initially chosen by the unions, where these are present. Only if there is no union are they chosen either by the works council, where one exists, or by representatives specially elected by the employees.

The method of appointing Czech SNB members is not set out in detail in the legislation transposing the European company directive. Instead the legislation states that the choice of Czech SNB members “shall be governed by Section 25e (4) of the Labour Code” as well as the parts of the legislation which determine how SNB members are to be distributed between the participating companies (Section 48). The Labour Code in turn states that Czech SNB members should be appointed by the “employees’ representatives” at a joint meeting (Section 25e Labour Code). However, elsewhere the Labour Code states that “employees’ representatives” can be either the local trade union grouping or a works council. However, the trade union grouping clearly has primacy, as a works council can only be set up if there is no trade union organisation. And it must be dissolved if a trade union organisation is subsequently set up. (Labour Code Sections 24 and 25)

Only if there are no employee representatives, or these representatives fail to function – in other words, where there is no functioning union organisation or works council – do the employees elect representatives specifically for the purpose of choosing Czech SNB members. Voting strength is in line with the number of employees represented (Section 25e Labour Code).

External trade union representatives

External trade union representatives from the Czech Republic may be members of the SNB.

The legislation specifically states that an individual not employed by the participating companies may represent Czech employees in the SNB “if this person is authorised or delegated by a trade union organisation of such employees” (Section 48).

Financing of experts

The companies are required to fund only one expert at a time.

The legislation makes it clear that the SNB has the right to invite external experts. However, it also states that “without prejudice to the number of invited expert advisers”, the participating companies are only required to pay for one “in a given area” (Section 49).

Standard rules under the fallback procedure

Allocation of national seats on SE representative body

Czech members of the SE representative body are chosen initially through the unions.

Czech members of the SE representative body, known in the Czech legislation as the “employees’ committee” (výbor zamĕstnanců), are selected in a similar way to the method used to choose Czech members of the SNB. However, in the case of the representative body, the mechanism is spelled out in the legislation transposing the European company directive (Section 55), rather than through reference to the Labour Code. The legislation states that members of the employees’ committee are appointed by “employees’ representatives” at a joint meeting. As already noted, the Labour Code states that “employees’ representatives” can be either the local trade union grouping or a works council. However, a works council can only be set up if there is no trade union organisation, and it must be dissolved if a trade union organisation is set up subsequently.

If there are no employee representatives, the employees elect representatives specifically to attend these joint meetings. Voting strength is in line with the number of employees represented.

Czech members of the employees’ committee must come from among the Czech employees of the European company. For the representative body, unlike the SNB, there is no provision for external union representatives to be chosen.

Budget of representative body

The budget arrangements for the SE representative body are the same as those for the SNB.

The arrangements for the funding of the employees’ committee are the same as those for the funding of the SNB, although this is set out in a separate section (Section 60) rather than just through a reference to the SNB arrangements. This means that the costs of the employees’ council, including the cost of a single expert are borne by the European company. The company is obliged to “ensure that the employees’ committee and its members have sufficient financial material and organisational conditions for the due performance of activities”.

National procedure for the allocation of board seats

Czech employee representatives at board level are elected by the employees, either directly or through delegates.

Representatives of Czech employees on either the administrative or supervisory board of a European company are chosen in the same way that national supervisory board members are chosen (Section 64). This means, under the terms of the Czech Commercial Code, that they are elected by all Czech employees, either directly or through delegates.

Misuse of procedures and structural change

Misuse of procedures

This is not specifically referred to in the Czech legislation

There is no reference to misuse of procedure in the Czech legislation.

Structural change

The Czech legislation does not refer to structural changes.

There is no reference in the Czech legislation to mechanisms protecting employees’ rights in the event of structural changes after a European company has already been set up.

Position of trade unions and employers

No concern expressed by either employers or unions.

The European company legislation has not provoked any concern in the Czech republic, either on the part of the unions or the employers.

L. Fulton (2008) Anchoring the European Company in National Law - Country Overviews (online publication, prepared for worker-participation.eu)

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