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Breach of Work Duties – Classification and Assessment According to Case Law

The Labour Code provides employers with tools to address situations where an employee fails to fulfil their duties. The key is to correctly assess the intensity of the breach, as the choice of an adequate and legally defensible course of action depends on it.

The Three-Tier System of Breach Intensity

The Labour Code, in Section 52(g) and Section 55(1)(b), distinguishes between three levels of breach of duties arising from legal regulations relating to the work performed by the employee:

1. Less serious breach: This is the lowest level of intensity. A single less serious breach does not in itself entitle the employer to terminate the employment relationship, but its repetition (at least 3 less serious breaches) can lead to termination for systematic breaches.

2. Serious breach: This breach, by its intensity, already justifies the unilateral termination of the employment relationship by the employer in the form of a notice of termination.

3. Gross breach: The highest level of intensity, which entitles the employer not only to give notice of termination but also to immediately terminate the employment relationship.

The Labour Code intentionally does not define these terms, leaving room for judicial discretion in each specific case. The determination of whether a given act falls into one of these categories is therefore fully within the competence of the courts, which assess all the circumstances of the case (cf. decision of the Supreme Court of the Czech Republic, file no. 21 Cdo 2555/2021, dated 26 April 2022).

Key Supreme Court Case Law – Factors Influencing the Assessment of Intensity

Judicial practice, especially the case law of the Supreme Court, has established a set of criteria that are taken into account when assessing the intensity of a breach of work duties. This is not a mechanical calculation but a comprehensive assessment of all relevant aspects. Key factors include:

• The employee's person and their job position: Stricter requirements for loyalty and adherence to duties are placed on managerial employees. Similarly, a higher degree of responsibility is expected in positions where the employee comes into contact with the employer's property or with clients (e.g., bartender, waiter, cashier).

• Previous attitude towards fulfilling duties: A long-term trouble-free work performance may be a mitigating circumstance in some cases. However, for gross breaches, such as an unexcused absence for an entire shift, even a previous good work ethic may not reduce the intensity of the misconduct below the level of a serious breach.

• Manner and intensity of the breach: The court examines whether it was a one-off excess or repeated and targeted conduct. The form of fault is also crucial, i.e., whether the employee acted intentionally or negligently.

• Consequences for the employer: Consideration is given to whether the employee's actions caused property damage to the employer, whether its good name was damaged, operations were disrupted, customers were lost, or the health and safety of other persons were endangered.

For a correct understanding, it is essential to distinguish between a breach of duties under Section 52(g) of the Labour Code and failure to meet the requirements for the proper performance of work under Section 52(f) of the Labour Code. While a breach of duty must always be culpable (at least through negligence), failure to meet requirements does not have to be culpable – it may involve, for example, insufficient skill, slowness, or unsatisfactory work results. If the employer chooses the wrong ground for termination, it risks the court finding the termination invalid in a potential dispute.

Practical Examples from the Hospitality Sector and Their Classification

The hospitality sector is characterised by specific risks that require increased attention from employers:

• Working with cash and valuables: Employees in the hospitality industry handle cash, valuables, goods, and expensive stock on a daily basis, which naturally increases the risk of theft, embezzlement, and deficits in entrusted assets.

• Direct contact with the public: Staff are in constant contact with customers and represent the business to the outside world. Any inappropriate behaviour, vulgar attacks, or conflicts with guests have an immediate and often devastating impact on the reputation and business success of the establishment.

• Working with alcohol: The ubiquitous availability of alcoholic beverages poses a permanent risk of their consumption in the workplace, which can lead not only to a breach of work duties but also to a threat to safety and health.

• High turnover and employment of foreign nationals: The hospitality industry is typified by a high rate of employee turnover and the frequent employment of foreign nationals. This places extraordinary demands on management in the areas of training, supervision, and compliance with specific legal regulations related to the employment of foreigners, including residence legislation.

Judicial practice confirms that there is no "minimum" misconduct that can be ignored. Every, even the smallest, culpable breach of duty (e.g., arriving a few minutes late) is legally considered a less serious breach. This principle is the basis for the possibility of sanctioning for systematic breaches, where even minor transgressions are cumulative.

When damage occurs on the part of the employer, it is important to distinguish between the employee's general liability for damage and the special regime of liability for a deficit in entrusted assets, which is also referred to in practice as "material liability". The two regimes differ mainly in the conditions for the creation of liability, the distribution of the burden of proof, and the extent of possible compensation.

In the case of an employee's general liability for damage under Section 250 of the Labour Code, liability arises directly by law. However, the employer must prove that the employee breached their work duty, that damage occurred, that there is a causal link between the breach of duty and the occurrence of the damage, and that the employee was at fault for the damage. A typical example may be damage to the establishment's equipment, breaking plates or glasses, damage to a coffee machine, or other damage caused in the performance of work.

In the case of damage caused by negligence, the amount of compensation is generally limited to four and a half times the employee's average monthly earnings. However, this limit does not apply in all cases, for example, if the damage was caused intentionally, while intoxicated, or after the abuse of other addictive substances.

Different rules apply to liability for a deficit in entrusted assets under Section 252 of the Labour Code. This regime can only arise on the basis of a written agreement on liability for entrusted assets, which the employee concludes with the employer. It concerns assets that the employee is obliged to account for and with which they have the opportunity to personally dispose, typically cash in the register, valuables, or stock of goods.

A significant difference is primarily the distribution of the burden of proof. If a deficit arises in the entrusted assets, the employee's fault is presumed. It is therefore up to the employee to prove that the deficit arose wholly or partly without their fault. A typical example may be a shortage in the cash register, missing goods in stock, or a discrepancy found during an inventory of the bar or other establishment.

There is also a difference in the extent of compensation for damages. Whereas in the case of general liability, compensation for damage caused by negligence is generally limited by law, in the case of liability for a deficit, the employee generally compensates for the deficit in full.

Concluding an agreement on liability for entrusted assets can therefore have a significant practical impact for the employer. However, the mere existence of the agreement does not mean that the employee is automatically liable for any damage or loss incurred in the workplace. It is always necessary to assess whether it is indeed a deficit in assets entrusted for accounting and whether all the legal conditions of this special liability regime are met.

Dealing with Systematic Less Serious Breaches of Duty

Chronic unreliability or repeated minor transgressions are a common problem in employment relationships. The Labour Code offers the employer an effective tool to deal with such situations – termination for systematic less serious breaches of duty. However, its validity is conditional on strict adherence to a formal procedure.

The Condition of Systematic Breach and the Role of the Warning Letter

Case law has established the interpretation that a systematic breach occurs in the case of at least three breaches of duty that follow each other in a reasonable time sequence. It is not necessary for the employee to commit the same transgression repeatedly; a combination of different minor breaches is sufficient (cf. decision of the Supreme Court, file no. 21 Cdo 5836/2016).

A key prerequisite for the validity of such a termination is a prior written warning about the possibility of termination, commonly known as a warning letter. Its purpose is not to punish the employee, but to formally warn them and give them an opportunity to rectify their conduct. This warning must be delivered to the employee in the last 6 months preceding the day the notice of termination is given.

Formal and content requirements of the warning letter:

• Form: The letter must be in writing and must be delivered to the employee in person, ideally at the workplace against a signature. Delivery by e-mail is insufficient.

• Content:

1. Precise specification of the misconduct: The letter must describe, in a completely specific and unambiguous manner, the conduct in which the employer sees a breach of duties (e.g., stating the exact date and time of a late arrival, describing specific inappropriate behaviour towards a guest or a colleague). It is not necessary to legally classify the intensity of the breach.

2. Warning about the possibility of termination: The letter must contain an explicit and unequivocal sentence stating that in the event of a further breach of work duties, the employment relationship with the employee may be terminated by notice.

The warning letter itself is considered a so-called factual act, not a legal act against which the employee could defend themselves separately in court. Its relevance and correctness are assessed only within the framework of a possible court dispute about the invalidity of a subsequently given notice of termination. However, any formal or content error in this document can lead to the invalidity of the entire termination, which underscores the need for its careful preparation.

Procedure Leading to Termination

The following escalating procedure is recommended for the employer:

1. First less serious breach: Address the situation with a verbal reprimand and make an internal record for future reference.

2. Second less serious breach: Proceed with the delivery of a formal written warning letter with all the above-mentioned requirements.

3. Third (and every subsequent) less serious breach: If the employee commits another breach within 6 months of the delivery of the warning letter, the legal conditions are met, and the employer is entitled to give the employee notice of termination for systematic less serious breaches of duty.

Serious Misconduct and the Ultimate Solution – Immediate Termination of Employment

In cases where the employee's conduct reaches a higher intensity, the Labour Code allows the employer to take more drastic steps that lead to a quicker termination of the employment relationship.

Notice of Termination for a Serious Breach of Duties

If an employee commits a single breach of duties that is so intense that it can be classified as serious, the employer can give them notice of termination under Section 52(g) of the Labour Code. In such a case, the employment relationship ends upon the expiry of the notice period, which from 1 June 2025 for such misconduct is set at one month, beginning on the day of receipt of the notice. This procedure is suitable for incidents that, while disrupting trust and the proper running of the business, do not reach a level that would require immediate termination of employment.

Immediate Termination of Employment

Immediate termination of employment under Section 55 of the Labour Code is the most serious sanction known to the Labour Code. The employment relationship ends at the moment this unilateral legal act is delivered. The law describes this instrument as "exceptional" and it can only be used in exhaustively defined cases:

• The employee has been finally convicted of an intentional criminal offence under the conditions stipulated by law.

• The employee has breached a duty arising from legal regulations relating to the work performed in a gross manner.

Case law consistently infers that a gross breach occurs when the circumstances of the case are so serious that the employer cannot be fairly required to continue employing the employee, even for the duration of the notice period. For the hospitality sector, the following examples are particularly relevant:

• Attack on the employer's property: Theft of money from the takings, goods from the warehouse, or guests' property. The intensity is assessed as particularly gross even in the case of theft of an item of negligible value, as it involves a fatal breach of the necessary trust (cf. decision of the Supreme Court, file no. 21 Cdo 1906/2021).

• Physical violence and gross attacks: Physical assault on a colleague, superior, or guest, or even an exceptionally gross and vulgar verbal attack.

• Alcohol in the workplace: Proven consumption of alcohol or performance of work under its influence, especially in positions requiring concentration and responsibility (working with a cash register, preparing meals).

• Prolonged unexcused absence: Judicial practice generally considers an unexcused absence of five or more working days as grounds for immediate termination.

When carrying out an immediate termination, it is necessary to adhere to strict procedural rules. It must be done in writing and the reason must be factually defined in it so that it cannot be confused with another. Failure to comply with the written form results in the legal act being null and void, which means it is disregarded entirely and the employment relationship does not end. The employer is also bound by strict time limits: they can immediately terminate the employment relationship only within 2 months from the day they learned of the reason (subjective time limit), but no later than 1 year from the day the reason arose (objective time limit).

The practice of some employers who, uncertain about the intensity of the misconduct, deliver both an immediate termination and, "just in case," a notice of termination to the employee should be avoided. The Supreme Court has deemed such a procedure, where the validity of the notice of termination is conditional on the invalidity of the immediate termination, as inadmissible because it creates legal uncertainty. The employer must consider all circumstances and choose only one method of terminating the employment relationship (cf. decision of the Supreme Court, file no. 21 Cdo 3541/2019).

Consequences of Invalid Termination of Employment

If an employee files a lawsuit and the court rules that the termination of employment was invalid, and the employee has also notified the employer in writing that they insist on continued employment, this has serious financial consequences for the employer. 

The employment relationship continues to exist, and the employee is entitled to wage compensation equal to their average earnings for the entire duration of the dispute. Although the court may, at the employer's request, reasonably reduce the wage compensation for the period exceeding 6 months (the so-called moderation right), for example, if the employee worked elsewhere in the meantime, the first 6 months of compensation are generally awarded in full.

Alcohol and Addictive Substances in the Hospitality Workplace

The issue of alcohol is particularly sensitive in the hospitality industry. The Labour Code sets out strict rules, compliance with which is crucial for employers not only for risk prevention but also for the possibility of validly sanctioning employees.

Statutory Prohibition and Specifics for the Hospitality Industry

Section 106(4)(e) of the Labour Code unequivocally prohibits employees from consuming alcoholic beverages at the employer's workplaces (even after working hours) and during working hours (even outside the workplace). It also prohibits entering the workplace under their influence. This prohibition therefore also applies to drinking a beer with lunch in a restaurant during the lunch break or at company parties held on the business premises.

There are exceptions to this strict rule that may be relevant to the hospitality industry. The prohibition does not apply to employees for whom the consumption of alcohol is part of their work duties (e.g., tasters, sommeliers, brewers) or is usually associated with the performance of these duties (e.g., a toast at a business meeting). However, these exceptions must be interpreted very narrowly and cannot serve as a blanket excuse for staff to consume alcohol.

Practical Procedure in Case of Suspected Alcohol Consumption

If an employer suspects that an employee is under the influence of alcohol, they must proceed systematically and in a formally correct manner:

1. Issuing an instruction for a test: The instruction to undergo a breathalyser test can only be given by an authorised supervising employee who has been designated in writing by the employer for this act. The absence of this written authorisation is a fundamental procedural error. 

If the supervising employee does not have such authorisation, the employee is not obliged to obey their instruction, and it does not constitute a breach of duties on their part. It is therefore absolutely crucial for employers in the hospitality industry to have an internal directive that clearly defines which supervisors on individual shifts are authorised to perform this act.

2. Performing the test and drawing up a report: The employee is obliged to undergo a duly ordered test. If they refuse, they are treated as if they were under the influence of alcohol. It is essential to draw up a detailed report on the test, which should include the employee's identification, the time and reason for the check, the type of device used, the measured value, and the signatures of the person being tested, the supervising manager, and ideally an independent witness.

3. Medical examination: A breathalyser test is only indicative. For unequivocal proof of the presence of alcohol in the blood, especially for the purposes of a possible court dispute, it is highly recommended to arrange for a professional medical examination (blood sample). If the result is negative, the costs are borne by the employer. If it is positive, they are borne by the employee.

Legal Consequences

The mere measurement of a low level of alcohol may not automatically be assessed as a gross breach. The courts always examine all circumstances, especially the type of work performed, the degree of risk to property and health, and the degree of the employee's impairment (cf. decision of the Supreme Court, file no. 21 Cdo 4733/2015). However, in a restaurant environment where employees handle money, sharp instruments, hot food, and communicate with customers, even a low level of alcohol will most likely be assessed as a serious, or even gross, breach of duties, justifying the termination of the employment relationship.Protection of Property: Theft, Embezzlement, and Material Liability

Protecting property is one of the key priorities for an employer in the hospitality industry, where a large volume of cash and goods is handled daily. The Labour Code provides tools to defend against dishonest employees and to claim compensation for damage caused.Theft as Grounds for Immediate Termination of Employment

An attack on the employer's property, regardless of the amount of damage caused, is consistently considered by the case law of the Supreme Court to be a breach of work duties in a gross manner (cf. decision of the Supreme Court, file no. 21 Cdo 4433/2016). The reason is not only the property damage itself, but above all the irreversible breach of the fundamental trust that is necessary for the performance of dependent work. In such a case, the employer is entitled to immediately terminate the employment relationship with the employee.

However, a major challenge is proving such an act. The burden of proof lies entirely with the employer, who must prove beyond doubt that the theft was committed by a specific employee. This can be done using camera recordings (provided that the information obligation under GDPR is met), witness testimonies, or the results of an internal investigation. In practice, however, direct evidence is often difficult to obtain.

Agreement on Liability for Entrusted Assets

For employers in the hospitality industry, the agreement on liability for entrusted assets (formerly "material liability") under Section 252 of the Labour Code is an absolutely key and strategic tool. Its conclusion fundamentally changes the legal position of the employer when dealing with deficits (shortages) in entrusted assets.

This agreement allows the employer to demand compensation for damages from the employee in full, without having to prove their specific fault in the occurrence of the deficit. The burden of proof is reversed: the employee's fault is presumed (the so-called presumption of fault), and it is up to the employee to prove that the deficit occurred wholly or partly without their fault. This mechanism effectively addresses situations where money is missing from the cash register or goods are missing from the bar at the end of a shift, and it is not possible to determine which of the employees committed the misconduct.

Conditions and Application:

• Valid conclusion: The agreement must be concluded in writing with an employee who is of legal age and has full legal capacity.

• Subject of the agreement: It applies to assets intended for turnover or circulation, with which the employee has the opportunity to personally dispose. In a restaurant, this typically includes cash in the register, and stocks of alcohol and raw materials in the warehouse or at the bar.

• Inventory taking: The employer is obliged to conduct an inventory when the agreement is concluded and when it terminates. Failure to do so does not invalidate the agreement, but it significantly complicates the employer's position, who must then prove the state of the entrusted assets by other, often less conclusive, means.

• Joint liability: For teams working on the same shift (e.g., a bartender and a waiter), it is ideal to conclude a joint liability agreement. The identified deficit is then apportioned among them in proportion to their gross earnings, unless the fault of a specific person is proven.

Differences between general liability and liability based on an agreement.

When assessing an employee's breach of work duties, the intensity of the specific breach is crucial. The Labour Code distinguishes between a less serious breach of duties, a serious breach of duties, and a breach of duties in a gross manner. The employer's options for resolving the situation then depend on this intensity.

A single late arrival to work, failure to adhere to the prescribed dress code, or minor reluctance when dealing with a guest can be considered a less serious breach of work duties in practice. In such a case, the employer usually chooses a milder measure, such as a verbal warning or a written warning about the breach of work duties. However, if less serious breaches are repeated and the legal conditions are met, they can lead to termination under Section 52(g) of the Labour Code.

A serious breach of work duties may include, for example, an unexcused absence of one to two days, rude behaviour towards a guest, a significant violation of hygiene rules, or repeated errors in ringing up sales, even though the employee was warned about previous mistakes. Such conduct may already be grounds for termination of employment under Section 52(g) of the Labour Code.

The highest intensity is represented by a breach of work duties in a gross manner. Depending on the circumstances, this category may include, for example, theft of takings or goods, physical assault, proven intoxication of an employee during a shift, or a prolonged unexcused absence, for example, of five or more days. In such cases, the employer may, if the legal conditions are met, proceed to an immediate termination of employment under Section 55(1)(b) of the Labour Code.

However, it is important to emphasize that the intensity of a breach cannot be determined solely by a pre-established list of actions. Each case must be assessed individually, taking into account all circumstances, in particular the employee's job classification, their previous attitude to fulfilling duties, the degree of fault, the consequences of their actions, and the situation in which the breach of duty occurred. Therefore, the same misconduct may not have the same labour law consequences in all cases.

From the above, it is clear that the absence of a liability agreement is a serious managerial failure for employers who entrust their employees with significant assets, which puts them in a very disadvantageous position in the event of a deficit.

Workplace Harassment – Employer's Duties and Incident Resolution

The employer has a legal duty to create a safe and respectful work environment. This duty includes actively protecting employees from all forms of harassment.

Legal Definition and Employer's Liability

Although the Labour Code does not explicitly define bullying, its prohibition is inferred from the general provisions on equal treatment and the protection of employee dignity. Bullying manifests as systematic and long-term psychological attacks by colleagues (mobbing) or a superior (bossing) with the aim of harming the victim.

Sexual harassment, on the other hand, is defined directly in the Anti-Discrimination Act as a form of discrimination. It is any unwelcome conduct of a sexual nature (verbal, non-verbal, or physical) whose purpose or effect is to violate a person's dignity and create an intimidating, hostile, degrading, humiliating, or offensive environment.

The employer bears full responsibility for ensuring a harassment-free work environment. They are liable for damages, including non-pecuniary harm (e.g., psychological distress), incurred by an employee as a result of bullying by colleagues or superiors in the course of performing work duties.

Procedure for Resolving Incidents and Prevention

Upon reporting an incident, the employer is obliged to:

1. Investigate the complaint: Every complaint must be taken seriously, discussed, and an objective internal investigation must be conducted.

2. Take immediate measures: Ensure the protection of the victim, for example, by preventing further contact with the aggressor or temporarily reassigning them.

3. Take action: Appropriate labour law consequences must be drawn against the perpetrator. Depending on the severity of the conduct, this may be a warning letter, a notice of termination for a serious breach of duties, or even an immediate termination of employment. Case law has confirmed that even bullying can reach the intensity of a gross breach of duties.

The best solution is prevention. The employer should adopt an internal regulation (e.g., a code of ethics) that clearly defines unacceptable forms of behaviour, establishes a transparent and safe mechanism for filing complaints, and guarantees the protection of whistleblowers from any form of retaliation.

Specifics of Resolving Problems with Foreign National Employees

Employing foreign nationals, especially from non-EU countries, brings specific legal challenges that combine labour law and immigration matters.

Application of Czech Law and the Language Barrier

Employment relationships with foreign nationals performing work in the Czech Republic are fully subject to the Czech Labour Code. Foreign nationals have the same rights and obligations as Czech employees, including the right to fair wages, holidays, and safe working conditions.

A major practical complication is the language barrier. To avoid future disputes about the validity of legal acts due to incomprehensibility, it is highly recommended to prepare all key documents (employment contract, warning letter, termination notice) bilingually – in Czech and in a language that the employee demonstrably understands. Although the case law of the Supreme Court (decision 21 Cdo 1760/2007) has established that the use of a foreign language does not in itself cause invalidity if the addressee understands the language, the burden of proof in such a case lies with the employer, which complicates their position.

Interconnection of Labour and Immigration Law

Resolving problems with a foreign national employee requires thinking on two legal levels. Any termination of employment has a direct impact on their residence permit.

• Termination of employment by law: A foreign national's employment automatically ends upon the expiry of their employee card or work permit. Furthermore, the Supreme Court recently confirmed that the employment relationship also terminates by law if the foreign national loses their so-called free access to the labour market (for example, by interrupting studies that were a condition for this status - cf. decision NS 21 Cdo 1111/2024).

• Protection period: After the end of employment, the holder of an employee card has a protection period of 60 days to find a new employer and report this change to the Ministry of the Interior. If they fail to do so, their employee card and thus their residence permit expires.

• Employer's reporting obligations: The employer is obliged to inform the relevant regional branch of the Labour Office in writing of the termination of a foreign national's employment within the statutory time limits (usually within 10 calendar days). Failure to comply with this obligation is an administrative offence and can be sanctioned.

The employer must therefore not only strictly adhere to the procedures under the Labour Code when terminating an employment relationship, but also be aware of the impact of their actions on the employee's residence status and fulfil their own reporting obligations to state authorities.

Conclusion: A Strategic Approach to Human Resources Management and Minimising Legal Risks

Dealing with problematic employees in the hospitality industry requires employers to have not only managerial skills but also a deep knowledge of labour law regulations and related case law. The key to a successful and legally sustainable personnel policy is an emphasis on prevention and systematic documentation.

Strategic recommendations for employers:

1. Invest in quality documentation: Create and consistently use detailed employment contracts, internal regulations, and work rules. Pay special attention to concluding written agreements on liability for entrusted assets with all employees who handle cash or goods.

2. Set clear and communicated rules: Create and demonstrably familiarise all employees with internal directives that regulate key risk areas – especially the procedure for checking for alcohol in the workplace, rules for handling cash, and a code of ethics defining unacceptable behaviour, including bullying and harassment.

3. Train supervising employees: Ensure that your managers and shift leaders are not only familiar with internal regulations but are also trained in their correct application. In particular, they must know who is authorised in writing to order a breathalyser test and how to correctly write a warning letter and a control report.

4. Keep meticulous records: Systematically document all breaches of work duties, even the less serious ones. Keep copies of delivered warning letters, control reports, and other relevant documents. This evidence is crucial for any court disputes or inspections by the State Labour Inspection Office (SÚIP).

5. Be cautious with foreign national employees: For employees from third countries, pay increased attention to the bilingualism of key documents and the timely fulfilment of reporting obligations to state authorities. We will be happy to help you with all these situations.

Consistent adherence to these principles not only minimises the risk of losing labour law disputes and the associated financial costs of wage compensation, but also contributes to building a professional and stable work environment. Last but not least, it protects employers from significant fines from the SÚIP, which can be imposed for breaches of obligations in the area of labour relations, work safety, or illegal employment and can reach up to millions of crowns.