Signing an employment contract

An employment contract is a document, a bilateral contract, signed by the employer and employee to negotiate mutual rights and obligations that suit both of them and that they have agreed on when negotiating the content of the contract.

The Labour Code requires an employment contract to be in writing, signed by the employee and the employer, which must have only the following mandatory elements:

• the type of work
• the place of work
• the date of commencement of employment

Type of work

This should be negotiated in as much detail as possible so that disputes do not arise in the future as to what work the employer can assign to the employee and what is no longer in the employee’s “job description”. The employer must not assign work to the employee that is not agreed in the employment contract. However, there is an exception to this rule, where the law provides that the employer may (or must) transfer the employee to another job, but only for exhaustively specified reasons, in particular health reasons. At the same time, the employee may refuse the work imposed by the employer if it does not correspond to the type of work described in the contract.

Place of work

Attention should also be paid to the negotiation of the place of work; this may be agreed for a specific address, but also very broadly, for example for the whole region or the whole country. This is particularly important for an employer who has, for example, several branches, who can then move employees around freely if the place of work is broadly agreed. When signing the contract, you should therefore ask why the place of performance is agreed so broadly, so that you are not surprised.

Example from law practice:

A security guard had an agreed place of performance on a specific street in a city. However, there were rioters and loiterers gathering around the building, so the employer told him to go around the building every two hours. The security guard refused to do so because he had no other streets agreed upon as his place of work. Eventually, however, an agreement was reached and, for a slightly increased remuneration, the watchman agreed to change the place of work so that the walls of the historic building were guarded on all sides.

If the place of work was defined too broadlyfor a particular type of work (e.g., the entire territory of the Czech Republic for a worker actually performing work at one workplace), theemployment contract could be considered void.

Date of starting work

The date on which an employee starts work is crucial, as this is the date on which the employment contract starts. There are several ways to determine the start date, including a specific date or based on another objective legal event, such as a week after the end of previous employment.

Such legal events must be sufficiently clear and must not create uncertainty as to when the employment relationship starts. From the first day of work, the obligation to work passes to the employee and the obligation to assign the work to the employer. It is also possible to agree on a day on which no work is normally done, such as a weekend, as the starting date.

Probationary period

Attention should also be paid to the negotiation of a probationary period, which exists to help the employer and employee get to know each other before the employment relationship gets into full swing. During this period, both can give notice without giving any reason. The probationary period can last a maximum of 3 months and 6 months for managers. However, it may never exceed half the agreed duration of the employment relationship if it was agreed for a fixed term.

Consent to secondment

If you are taking up a position where you are likely to travel and deal with work-related matters in different locations, your employer will normally ask you to sign a travel authorisation form, otherwise they would need your permission for each specific business trip. Of course, the employee is entitled to compensation for the business trip as provided for by law, including: meal allowances, reimbursement of accommodation expenses, reimbursement of travel expenses, etc.

If you have agreed in your employment contract a place of work broader than the municipality, the so-called regular place of work is considered the starting point of the trip, this can either be agreed in the contract or it is the place from where the employee most often starts his/her work trips.

Competitive clause

Care should also be taken with regard to the competition clause, this basically restricts the employee after the end of the employment relationship, the employee may not engage in gainful employment which is carried out by the employer or which would compete with it for a maximum of 1 year after the end of the employment relationship. However, the employer must provide the employee with a financial compensation, but not less than half of the employee’s average monthly earnings. The competition clause may also include a reasonable contractual penalty; payment of the penalty by the employee shall terminate his obligation not to engage in similar activities.

Other matters and details of the employment relationship may be negotiated in another agreement or determined by an internal regulation of the employer. The wage is probably of most concern to each employee and must be agreed or determined before the work commences.

Other matters that may or may not be part of the employment contract

Some employees would like to have everything about their work and job description clearly spelled out in their contract. However, it is not advantageous for the employer to have such detailed arrangements, as it would mean that each time a partial modification of, for example, benefits is made, a new agreement would have to be signed twice by the parties involved. Nevertheless, in the employment contract we see, for example, the following modification:

• the amount of wages,
• regular remuneration, bonuses or allowances
• employment benefits,
• adjustment of working hours,
• the length of holidays, etc.

From the employer’s point of view, it is undoubtedly more advantageous to enshrine these aspects of the employment relationship in an internal regulation, which it can unilaterally change itself.