According to Section 11 of the Act No. 262/2006 Coll., Labour Code, as amended (hereinafter referred to as the "Labour Code"), there is a distinction between law for employees and law for management employees.[1]
Management employees are such employees who are at individual stages of employer’s management entitled to determine and assign work-related duties to their subordinate employees, to organize, control and check their performance and provide them with obligatory instructions for this purpose.
The Labour Code for management employees then determines a series of specifications which differentiate work-related conditions for management employees from the "regular ones" (for example possibility of extended probation period, having right to check on the subordinate employees for the presence of addictive substances etc.).
Management employees can then become managerial employees from the beginning of their employment by the employer, or they can attain the position gradually. Either way, their employment will be always based on a signature of employment contract, then we cannot speak about appointment as in case of government officials.
It is then effective according to Section 73(2) of the Labour Code that the possibility of management employees´ dismissal has to be agreed in written. However, written form is not enough for the management employees´ dismissal and employer has to always provide the management employees with the possibility to give up their managerial position themselves. If there was in the agreement only the definition of the dismissal possibility without the simultaneous possibility of giving up the position, it will not be possible to dismiss the management employees lawfully.
The prerequisite for stipulation of such an agreement is not that employees are already holding the managerial position. Its stipulation is permissible also for the case of the employees potentially holding the managerial position with the employer in the future.
Except for the above-mentioned essential requirements this agreement can also include other provisions which can be very useful in case of disagreements and uncertainties about the managerial position dismissal (for example reasons for dismissal, financial compensations when giving up the managerial position etc.).
Consequences of dismissal from the managerial position
In case all the above-mentioned terms are fulfilled, employees can be dismissed from their managerial position. In this case a question arises – what to do with such employees after their dismissal, because employment of the managerial employees doesn’t terminate by their dismissal.
It’s not possible to apply a long persisting myth that employment is automatically restored into the form in which it was before appointing to the managerial position. Employment of the employees who were dismissed or who gave up their working position still remains valid but without employees having any negotiated work they would be obliged to perform for the employer.
In case of the management employees´ dismissal (identically in case of their giving up the managerial position), the employer is obliged to offer the employees another work position which has to correspond with their state of health and qualifications. Employer will then act upon Section 41(6) of the Labour Code.[2]
Obligation to offer employees "another work position corresponding to their qualifications" means for the employer to offer the employees such a work position during which they would make full use of their qualifications.[3]
Subsequently it is up to employees if they accept the offered position or not. In case employees reject the offered position (or don´t sign amendment of the employment contract in reasonable deadline given by the employer)[4], or employer doesn’t have any work position available for the employees which would be suitable for their qualifications and state of health, a fiction of the notice reason according to Section 52(c) of the Labour Code emerges and employer can dismiss the employees because of this reason.[5]
Obstacles to work on the employer’s part will then occur during notice period with the employees´ right for compensation for wage (Section 208 of the Labour Code).
In the above-mentioned cases it is always a legal fiction that occurs, the real redundancy doesn’t need to be introduced. If the redundancy of the management employees was real (employer would cancel the work position), a right for redundancy payment according to Section 67(1) of the Labour Code can be applied.
Employees who gave up their work position by themselves or who were dismissed from any other reason are not entitled for redundancy payment after terminating of the employment because of the fiction of notice reason according to Section 52(c).
It can be more than recommended to employers to always stipulate agreement with their managerial employees with the possibility of giving up/dismissing from managerial position. Otherwise, they would deprive themselves of the possibility of dismissing of the managerial employees and they would need to search for reasons to be able to terminate the employment.
____________________
[1] With the approaching amendment of the Labour Code we can probably expect another category that is "top managerial employees".
[2] Kottnauer, A. a kol.: Zákoník práce - komentář s judikaturou. Podle stavu k 1. lednu 2012, včetně novely účinné k 1. dubnu 2012. Praha: Leges, 2012, p. 310 - 313.
[3] See more details regarding the issue in Morávek, J. K nabídkové povinnosti ve smyslu § 73 odst. 6, resp. § 73a odst. 2 ZPr. Právní rozhledy, 2013, No. 9, p. 324.
[4] Supreme Court judgement as of 24 March 1999, file No. 21 Cdo 2088/98.
[5] Bělina, M., Drápal, L. a kol.: Zákoník práce. Komentář. 2nd edition. Praha: C.H. Beck, 2015, p. 477 – 482.