Managing Workplace Discrimination and Sexual Harassment Risks in Czech Law

Discrimination and sexual harassment in the workplace are not just HR issues – under Czech law, they can result in fines of up to one million CZK for your company, damage your reputation, and lead to the loss of key employees. This article will guide you through how to recognize these risks, address them correctly, and minimize their impact on your business in the Czech Republic. You will learn when you must take immediate action and how to avoid the most common mistakes.

Quick Summary

• The employer bears legal liability for discrimination and harassment in the workplace and can be fined up to one million CZK under the Czech Labor Inspection Act if the issue is not addressed. Discrimination does not only concern visible reasons – it also includes indirect discrimination and the creation of a hostile work environment.
• Sexual harassment, discrimination, and bullying can, in extreme cases, meet the elements of criminal offenses and require immediate escalation to external legal specialists, especially if the HR department is unable to maintain impartiality and objectivity.
• The correct procedure for handling these cases involves creating a safe environment for reporting (in accordance with the Czech Whistleblower Protection Act), documenting all findings, conducting an objective investigation, and prohibiting retaliation against whistleblowers. Laypeople often do not realize the procedural details and legal risks hidden behind seemingly simple steps.
• A reputational crisis resulting from discrimination or harassment can severely damage a company's image. Considering active reputation management and preventive measures is therefore crucial for the long-term stability of your organization in the Czech Republic.

What is workplace discrimination and why you should know how to address it

Workplace discrimination means unfair or unfavorable treatment of an employee or job applicant based on a specific ground protected by law. According to the Czech Anti-Discrimination Act, these protected grounds primarily include race, ethnic origin, nationality, gender, sexual orientation, age, disability, religion, belief, or worldview.

For HR managers and company leadership, it is crucial to understand that equal treatment is not just a matter of ethics or polite behavior. It is a legal obligation that you must fulfill. By violating the prohibition of discrimination, you expose yourself to immediate legal action, lawsuits for damages, and fines from the Czech State Labor Inspection Office.

At the same time, discrimination and harassment in the workplace create a toxic environment that leads to loss of productivity, increases employee turnover, and reflects negatively on your firm's reputation. For HR professionals, it is therefore essential to understand what lies behind the concept of discrimination in practice and be prepared for how to resolve it.

One of the most common misconceptions is the assumption that discrimination only means blatant or obvious discriminatory behavior – e.g., when a manager openly says: "We won't hire you because you are a woman." In reality, discrimination often operates much more subtly and covertly.

Direct discrimination versus indirect discrimination

Direct discrimination is an act, including an omission, where one person is treated less favorably than another person is, has been, or would be treated in a comparable situation, based on one of the protected characteristics (e.g., age, gender).

Indirect discrimination, on the other hand, is hidden and often operates through a seemingly neutral provision, criterion, or practice that actually disadvantages a certain group of employees compared to others.

Sexual harassment in the workplace: Legal perspective and practical consequences

Sexual harassment is a specific form of discrimination and represents conduct of a sexual nature that is reasonably perceived by the affected person as unwelcome, inappropriate, or offensive, and whose purpose or effect is to diminish the person's dignity or create a hostile, degrading, or unsettling environment.

If an employer knows (or should know) that harassment is occurring and does not address it, the victim has the legal option to seek a court injunction to stop the discrimination, remove its consequences, and seek appropriate compensation, which may include financial damages. Simultaneously, the employer faces penalties for an administrative offense under the Czech Labor Inspection Act of up to one million CZK.

Sexual harassment can originate from a supervisor, a colleague, or even a client. If a manager sexually harasses a subordinate, it is considered a particularly serious case of abuse of power. Persons who report harassment or testify must not be subjected to any form of penalty (prohibition of victimization).

MicroFAQ – Sexual harassment and your obligations

1) What is considered sexual harassment under Czech legislation?
It is any unwelcome, inappropriate, or offensive behavior of a sexual nature (physical, verbal, or non-verbal) whose purpose or effect is to diminish a person's dignity or create a hostile environment.

2) What should an employer do when they learn of suspected sexual harassment?
The employer must immediately initiate an objective investigation, document findings, interview the parties involved, and take adequate corrective measures. They must also protect the identity of the whistleblower and ensure they are not subjected to retaliation.

3) Does the employer face sanctions if they ignore sexual harassment in the workplace?
Yes, the employer risks a fine from the Labor Inspectorate of up to 1,000,000 CZK and lawsuits where they may be required to pay the victim significant financial compensation.

How discrimination manifests in practice: Real-life examples

In practice, discrimination does not always appear as a dramatic incident. It is often a series of smaller decisions and actions. An example is a situation where a certain group of employees is systematically denied access to training and career development, while another group is provided with these opportunities.

Under the Czech Labor Code, the employer is obliged to guarantee equal pay for the same work or work of equal value. If inequality is found, the employer must prove that it is based on objective, gender-neutral criteria (e.g., quality of work, performance, experience).

A third example is a situation related to pregnancy and maternity. Czech law clearly prohibits discrimination in connection with pregnancy or motherhood. A common mistake is the dismissal of a pregnant employee during the probationary period.

If an applicant is rejected based on age, gender, or ethnic origin, it constitutes discrimination, unless the given characteristic represents a so-called essential and decisive requirement for the performance of the job.

Discrimination and Sexual Harassment

Employer obligations under Czech law

An employer has a legal obligation to ensure equal treatment of all employees and actively prevent discrimination. This obligation arises directly from the Czech Labor Code. The employer bears objective responsibility for what happens at their workplace in the Czech Republic.

For larger employers (over 50 employees), there has been an obligation since 2023 to establish an internal whistleblowing system under the Czech Whistleblower Protection Act, which allows for safe and confidential reporting of illegal conduct.

The employer is obliged to investigate every complaint. The investigation must be impartial and thorough. The whistleblower must not be victimized for filing a report. If the complaint proves to be justified, the employer is obliged to take corrective measures.

This is an area where our attorneys in Prague commonly help set up processes to ensure they comply with Czech legislation and minimize the risk of sanctions.

Who can you contact?

Mgr. Jakub Oliva, LL.M., MSc.

associate, partner

• oliva@arws.cz

JUDr. Barbora Kořenářová

associate

• korenarova@arws.cz

MicroFAQ – Employer obligations in addressing discrimination

1) Is an employer obliged to address a complaint they consider trivial?
Yes, an employer should investigate every complaint. Even a subjectively perceived "minor matter" can be discrimination or bullying from a legal perspective in the Czech Republic. Ignoring it can lead to escalation and legal liability.

2) Can an employer resolve the matter "unofficially" without a record?
No, for the sake of legal certainty, the process must be documented. In the event of litigation in Czech courts, the burden of proof often lies with the employer, who must demonstrate they acted and took measures. Without documentation, the employer's position in court is very weak.

3) What if the investigation shows there was no basis for the complaint?
If the report was made in good faith, the whistleblower must not be penalized. If it was a knowingly false report (false accusation), consequences can be drawn against the whistleblower under Czech law.

Correct procedures: How to handle discrimination and harassment

When a suspicion of discrimination arises, it is necessary to act systematically. The first step is ensuring safety and initiating an objective investigation. This includes a sensitive interview with the whistleblower to ascertain details.

The person accused must be informed of the allegations and given the opportunity to defend themselves. Omitting this step could lead to the invalidity of subsequent labor law sanctions. Subsequently, the person against whom the complaint is directed must be given space to provide their statement.

The third step is interviewing witnesses and securing evidence (emails, records). Witnesses must be instructed on confidentiality and the prohibition of retaliatory measures. After gathering materials, an evaluation follows to determine if a breach of Czech regulations occurred.

If the suspicion is confirmed, adequate sanctions and measures to prevent recurrence must follow. Throughout the process, it is critical to document everything in writing. Insufficient documentation or incorrect legal qualification of the act are the most common mistakes made by HR departments.

When to immediately escalate the situation to a lawyer

There are situations (so-called "red flags") where HR should not handle the matter alone but should immediately contact legal counsel. The first case is suspicion of a criminal offense under the Czech Criminal Code (e.g., extortion, sexual assault, embezzlement, corruption).

In such a situation, an external investigation led by a law firm in Prague is essential. The second case is when the complaint is directed against top management (CEO, directors) or against HR itself. Here, a conflict of interest exists, and an internal investigation cannot be perceived as impartial.

The third case involves situations with a high risk of financial damage or data leaks. If you recognize these situations, you must act cautiously. An incorrectly conducted internal investigation can unintentionally create evidence against the company or violate the rights of the persons involved.

Our Prague-based attorneys ensure that the process takes place under legal privilege, providing a higher level of protection for sensitive information than standard internal records. For international companies, a frequent risk is also the blind application of foreign corporate rules without considering Czech commercial law.

Improper handling and escalation

Insufficient witness protection: If a company fails to protect witnesses from retaliation, it exposes itself to further litigation and fines under Czech law.

Legal protection of processes. Our Prague-based attorneys will set up a system to ensure the protection of both whistleblowers and witnesses.

How to avoid the most common mistakes in HR departments

Common mistakes include ignoring warning signs, insufficient documentation, disclosing the whistleblower's identity, and hasty decisions without hearing the other party. A critical error is also the incorrect application of termination grounds, which leads to lost litigation in Czech courts.

Attorneys from the ARROWS law firm in Prague help companies set up processes and train HR teams to prevent these mistakes. Contact us at office@arws.cz.

Prevention is better than crisis management

The foundation of prevention is a code of ethics and internal regulations that clearly define unacceptable behavior. Employees must be familiarized with these rules. The second pillar is a functional whistleblowing system that allows for confidential reporting of issues in accordance with Czech legislation.

Prevention also includes reasonable accommodations for persons with disabilities and the adjustment of conditions for parents, unless serious operational reasons prevent it.

The ARROWS law firm in Prague will assist you with an audit of existing documents and the implementation of compliance programs. Write to us at office@arws.cz.

Reputational crisis and your company's image

In the age of social media, information about a toxic environment spreads rapidly. Negative publicity deters customers, investors, and high-quality job applicants. If a crisis occurs, rapid, transparent, and legally sound crisis communication is essential.

The ARROWS law firm provides support in managing reputational risks, including legal representation in protecting the good reputation of legal entities under the Czech Civil Code.

MicroFAQ – Reputational risks and their solutions

1) What should we do if the media contacts us regarding allegations of discrimination?
Do not react hastily. Contact a lawyer and a PR specialist. Prepare a brief, factual statement indicating that you take the matter seriously and are investigating it (or that it has already been resolved).

2) How can we prevent information leaks from an internal investigation?
Limit the circle of informed persons to the absolute minimum. Instruct all participants on their duty of confidentiality and the consequences of breaching it under Czech law.

3) How can we restore our reputation after a scandal?
Transparently communicate the corrective measures taken (e.g., process changes, personnel changes) without violating the rights of the individuals involved.

Internal investigation versus external legal assistance

Routine personnel disagreements can be handled by HR. However, if the situation shows signs of a criminal offense, threatens high damages, involves company management, or poses a risk of litigation, external legal assistance is essential. An external attorney guarantees independence, expertise, and attorney-client privilege.

Our Czech legal team at ARROWS has extensive experience in resolving complex cases for companies of all sizes. If you are unsure of the correct procedure, consult the situation in a timely manner at office@arws.cz.

Conclusion

Discrimination and harassment are serious legal risks in the Czech Republic. Ignoring problems does not pay off. Properly established processes and professional legal support are the best investment in company stability. The ARROWS law firm in Prague is ready to assist you – whether with prevention or resolving an acute problem.

FAQ – Most frequent legal questions regarding discrimination, harassment, and reputational crises in companies

1. What are the legal criteria for something to be considered discrimination?
It must involve a disadvantage (or unjustified advantage) based on a protected ground (race, gender, age, etc.) as defined by the Czech Anti-Discrimination Act. If the different treatment is based on objective, factual reasons unrelated to a protected characteristic (e.g., poor work performance, lack of qualification), it is not considered discrimination.

2. What sanctions does an employer face for failing to address sexual harassment?
In addition to a fine from the State Labour Inspection Office (up to CZK 1 million), there is a risk of being ordered to compensate the victim for non-material damage in money, which can reach hundreds of thousands of crowns, plus the costs of litigation in Czech courts.

3. What happens if I dismiss a pregnant employee during her probation period?
If the reason for dismissal is pregnancy, it constitutes a discriminatory and invalid termination of employment under the Czech Labour Code. The employee may sue for a declaration of invalidity of the dismissal and claim wage compensation for the entire period she was not assigned work.

4. What should I do if an employee threatens an anti-discrimination lawsuit?
Do not underestimate the situation. Secure all documentation and contact an attorney immediately. In these disputes, the burden of proof is often reversed – the employer must prove that they did not discriminate. Contact us at office@arws.cz.

5. Can an internal ombudsman conduct all investigations?
For less serious cases, yes. For suspicions of criminal activity, systemic failures, or disputes with management, an external attorney is more appropriate to ensure impartiality and legal certainty.

6. How should we respond to journalist inquiries?
Always in coordination with a legal representative. Do not provide information that could breach confidentiality or damage the company's position in a potential dispute. Reach out to us at office@arws.cz.

Disclaimer: The information contained in this article is for general informative purposes only and serves as a basic guide to the issue. While we strive for maximum accuracy, legal regulations and their interpretation evolve over time. To verify the current wording of regulations and their application to your specific situation, it is essential to contact the ARROWS law firm directly (office@arws.cz). We bear no responsibility for any damages or complications arising from the independent use of information from this article without our prior individual legal consultation and professional assessment. Every case requires a tailor-made solution, so please do not hesitate to contact us.

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