Czech Republic: Fixed-Term Employment Legal Framework

Author: Klára Sleglova

There are two primary types of employment contracts: fixed-term and open-ended. A fixed-term contract offers employers flexibility for short-term projects or a substitute for a temporarily absent employee. However, it comes with legal limitations on renewals and durations.

 

General legal framework

A fixed-term employment contract lasts for a predetermined period or until a specific task or project is completed. The duration does not need to be tied to a specific date and can be stated more generally, such as “for the duration of employee XYZ’s maternity leave.” Commonly used in situations such as seasonal work, project-based roles, or covering for an employee on leave, fixed-term contracts are advantageous for employers who need flexibility.

 

However, fixed-term contracts are subject to legal limitations in the Czech Republic. They can only be concluded for a maximum of three years. Moreover, it can only be extended or renewed twice. This means that the parties can conclude a fixed-term employment relationship three times for a total of nine years. If this limit is exceeded or if the employee continues to work after the contract’s expiration, the contract may be automatically transformed into an open-ended contract. These restrictions do not apply in the case of serious operational reasons for which the employer cannot fairly be required to offer the employee an open-ended contract.

 

Termination of fixed-term employment

Once a fixed-term contract expires, the employment relationship automatically terminates unless the employee continues working with the employer’s awareness. The employees are generally not entitled to severance pay in this case. Additionally, the employer is under no obligation to renew the contract once it expires. In the case of termination of the employment relationship before the expiry of the agreed term, the same provisions for termination as in the case of an open-ended employment relationship apply.

 

Upcoming amendment to the Labour Code

The amendment to the Labour Code currently under discussion proposes that the number of possible extensions of the fixed-term employment contract should not be limited when covering for parents on parental leave. However, the total period will still not be able to exceed nine years.

Key Action Points for Human Resources and In-House Counsel

• A fixed-term contract may be concluded for up to three years.
• Fixed-term contracts are limited to two renewals and a maximum period of nine years.
• It enhances protections for parents returning from parental leave, allowing temporary work options.
• Fixed-term contracts may convert to open-ended if overused or extended.