HW Legal
A dismissal on grounds of redundancy (a "Section 52(c) dismissal" under the Czech Labour Code) allows an employer to terminate an employee's employment where their work is no longer required. Typical reasons include organisational changes resulting in a reduction of staff, changes in technology or equipment, or the restructuring of the employer's activities.
Let us examine a practical example of how redundancy is assessed and what conditions must be satisfied for such a dismissal to be legally valid.
Employee redundancy – a case study
A nursery school employed eight teachers. For the following school year, however, the number of children enrolled decreased, and the school's staffing needs corresponded to only 7.71 full-time positions. The funding available for teachers' salaries was reduced accordingly.
The nursery school therefore decided to reduce its teaching staff by one full-time position and issued a notice of termination to a specific teacher.
The teacher challenged the dismissal in court, relying on the following arguments:
- The total volume of work still corresponded to 7.71 full-time positions and therefore did not require reducing the workforce to seven teachers.
- She continued teaching after receiving the notice and was therefore, in her view, still needed.
- The nursery school continued hiring teaching assistants, which she argued demonstrated that she was not redundant.
Could any of these arguments have been sufficient to render the dismissal invalid?
(For a discussion of what a valid notice of termination should look like and what employees can do if they believe they have been unlawfully dismissed, see our article: Invalid Dismissal: How to Challenge It.)
Key principles governing redundancy dismissals
Redundancy does not require the complete elimination of a position
According to established case law, an employee may be considered redundant even if only part of their duties is no longer required.
The Czech Supreme Court has repeatedly held that an employer may implement organisational changes which result in an employee no longer being needed for all or part of the work previously performed.
In other words, redundancy can exist even where only a portion of the employee's former responsibilities disappears.
Continuing to work during the notice period does not negate redundancy
An employer may continue assigning work to an employee throughout the notice period.
Redundancy arises from the employer's decision to implement organisational changes. The fact that work remains available during the notice period does not undermine the validity of the redundancy dismissal.
The crucial question is whether the employer will continue to need the employee's position in the future.
As the Supreme Court explained, an employer does not lose the ability to assign work to an employee merely because notice of termination has already been given. The employee's work is simply no longer required going forward.
Hiring employees with different qualifications is not inconsistent with redundancy
Neither legislation nor case law requires that a redundancy dismissal be accompanied by an absolute reduction in the total number of employees.
An employer may restructure its workforce and decide to employ individuals with different qualifications, skills, or professional profiles, even while dismissing other employees as redundant.
The decision-making process behind redundancy
The employer's right to implement organisational changes
The decision to introduce organisational changes that may result in employee redundancies falls entirely within the employer's managerial authority.
Where the employer is a natural person, the decision is made personally. In the case of a legal entity, the decision is typically made by the statutory body or an authorised employee, such as an HR manager.
The decision does not need to take any particular form. However, it must be demonstrable and must be communicated to the employee no later than in the notice of termination itself.
Causal link between the organisational change and the redundancy
A causal connection between the organisational change and the employee's redundancy is essential.
An employee is redundant only where the organisational change directly affects their position and is the reason why their work is no longer required.
Where the employer introduces organisational changes for the purpose of adjusting the number of employees or altering the qualifications and skills required within the workforce, a redundancy dismissal will generally be valid.
Conclusion
The case law clearly demonstrates that employers enjoy considerable discretion when implementing redundancy dismissals.
That discretion must, however, be exercised within the limits established by law.
If you are an employer considering workforce reductions, we can help ensure that the process is carried out lawfully and effectively.
If you are an employee who has received a notice of termination, we can assess its validity and advise you on the options available to protect your rights.
(The practical example discussed above is based on the judgment of the Czech Supreme Court dated 23 October 2024, Case No. 21 Cdo 2519/2024.)