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Layoff is only the last resort ...

Do not throw away your investment into employees by early layoff: employers’ options in a time of financial crisis

In the past weeks the amount of news about imminent layoff of Czech companies’ employees has increased as a result of the financial crisis. However, layoff should only be the last resort, when all options to retain qualified and experienced employees are exhausted.

In addition, early layoff of employees can impair competitive strength after the market overcomes the crisis and fresh demand for a qualified workforce absorbs the released employees from the market. So what can the employer do to prevent termination of employment relationships and what are the obligations related to these measures?

Before you proceed to lay off employees into whose recruitment and development you have invested significant funds, consider the following steps:

• Restriction of overtime work
• Order of collective use of holiday
• Change of working regime, length of work hours
• Implementation of an account of working hours
• Fulfilment of the conditions and discussion of so-called partial unemployment

Restriction of overtime work

Overtime work is not part of the weekly work hours and is work done outside the scope of the shift schedule. If, as a result of lack of work for the employees (e.g., cancellation of orders by clients) previously ordered overtime work is released, no rights to reimbursement of wages arise for the employee, etc.

Order of collective use of holiday

The employer can order a collective use of holiday only upon fulfilment of certain conditions:

• Only after agreement with a trade union (if there is one at the employer)
• If it is necessary for operational reasons
• Collective holiday must not be longer than two weeks

The employer can also order individual employees to use their undrawn holiday, but should take into account
the employee’s legitimate interests.

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