Electronic employment contracts and agreements: what employers in the Czech Republic should know

For the past six months, employers in the Czech Republic have had the option of signing employment contracts and agreements in a simpler electronic format. Experts recommend what to avoid.

Amendments to the Labor Code, effective October 1, 2023, have simplified the procedure for concluding bilateral legal contracts (agreements). This includes, for example, the coordination of employment contracts, amendment agreements (annexes to employment contracts), termination agreements, and so on. How often and in what ways do employers apply this innovation?

According to the modified Article 21 of the Labor Code, the simplified electronic method is only applicable to certain papers, such as the above-mentioned bilateral legal agreements.

Emails cannot be used for:

• noticing of instant dismissal, dismissal during the probationary period, and other documents related to the termination of employment relations or legal ties based on a work contract or employment contract;
• applying for recall or dismissal from a supervisory post or payroll.

This change is compatible with a recent court decision and reflects developments in digital technology.

The employer (as amended) to the Labor Code is required to send a copy of any employment contract, work agreement, employment agreement, or amendments thereto, as well as any agreement in accordance with Articles 49 and 77(5)(a) of the Labor Code, to the employee’s email address, which the employee specifically provided in writing for these purposes (personal email, cloud storage).

This mode of service offering requires prior consent in the form of a separate written application. A simple electronic signature is sufficient here. You can then sign the document (an essential electronic signature will suffice) and give it to the employee.

Basic Rules

• These are mainly bilateral legal transactions (agreements).
• The employee agrees in advance to this method of service and indicates the address for service (independent of the employer, i.e., not a work email).
• Consent can also be made electronically (by preliminary email). The employer must have the employee’s consent for evidence (litigation, etc.).
• A recognized electronic signature (which applies to both parties) is not required; a simple one is sufficient.
• The employer must send a copy of the agreement to the employee by email (the employee can read the text of the agreement, save it, print it, etc.).
• The employee has the right to cancel the contract in writing within seven days of receiving a copy of the document (agreement) at an email address. This right is particularly significant if execution has not yet begun, such as if the employee has not started work in accordance with the concluded amendment to the employment contract—a new type of work, for example.

It is possible to cancel an electronically signed contract

According to Richard Kolibacz of the State Office of Labor Inspection, the modified provisions of Article 21 of the Labor Code do not create any new prerequisites for the legality of an electronically signed contract. It only imposes equivalent obligations on the employer to safeguard the employee as the weaker party in the employment relationship, and it grants the employee the right to refuse such an agreement in writing, except in specified circumstances.

Kolibach explains that the employer’s inaction “extends” the period when the employee can withdraw from an electronic contract concluded under § 21(2) of the Labor Code. This period begins only when the employee receives a copy of the agreement at their email address.

Employers must have an internal procedure in place, as well as the most appropriate mode of electronic communication. After all, you can now sign an employment contract using numerous HR platforms. When concluding a contract via email, the employer must ensure that the employee’s provided email address is his.

According to Richard Kolibach, the fact that the employer did not transmit an electronic copy of the contract to the employee’s email address does not invalidate the agreement. According to the Civil Code, a contract is considered legal if the parties agree on its terms and the other party accepts the proposal to consummate the agreement.

However, by failing to fulfill its obligation (to send a copy of the document to the employee’s email address, which is not with the employer and which the employee has communicated in writing to the employer for this purpose), the employer risks having his unlawful behavior considered an offense within the framework of the employment relationship or work agreement performed outside of the framework of labor relations. That’s what the Labor Inspection Act says about “breach of a specified obligation when establishing, changing, or terminating an employment relationship, a contract for work performance, or an agreement for work performance.” Failure to comply with these rules could result in a fine of up to 2,000,000 crowns.

Online communication is part of HR

Recruiters and staffing agencies are already using a simplified method to finalize employment contracts and agreements with select clients. Jitka Kouba (Souckova) from Grafton Recruitment confirmed this.

According to Jiří Halbrštát, Recruitment and Marketing Manager at ManpowerGroup, electronically signing employment contracts saves time and administrative responsibilities for both employees and employers.

“Although we complete most contracts in person, we use electronic means for employees who visit our branches. Our human resources department only works at the headquarters. Electronicization expedites the procedure and reduces the need for superfluous scanning of papers containing signatures, etc.”, said Halbrštát.

Jiří Halbrštát adds that their recruitment company employs thousands of workers, and the new legislation will enable them to digitize further their entire HR and payroll department in this sector. They’ve been using digital contract signatures on tablets for more than ten years, and the new regulation is another step toward completely abandoning paper-based document management.

Inspectorate activity

As with prior changes to labor legislation, only inspections will reveal how companies will apply the amendments and what challenges the labor inspectorate will encounter.

“However, we have not identified any initiatives to undertake inspections in this area. Employers and employees only contact us about this subject during consultations and in a few cases. Employers may be urged to remember to submit electronically signed documents to the employee’s email account, and parties may choose an email address not owned by the employer (i.e., not a work address) in compliance with the law,” Kolibac said.

He underlined the importance of using written forms for all documentation required by the Labor Code. Finally, potential legal battles will result in binding interpretations on electronic document submission, and related concerns will develop.

==

https://www.podnikatel.cz/clanky/elektronicky-uzavirane-pracovni-smlouvy-a-dohody-v-praxi/?utm_source=push&utm_campaign=2024-04-18