Equal pay in the Czech Republic
August 18, 2017
Compared to other EU countries, litigation between employers and employees revolving around (un)equal treatment and/or discrimination issues are still not that common in the Czech Republic. Nevertheless a recent Czech Supreme Court judgement developed criteria upon which employees employed by the same employer would be entitled to equal remuneration for work they perform.
The legal framework for employee remuneration is set forth primarily in the Labour Code (Act No. 262/2006 Coll., as amended, hereinafter the “LC”), especially in its Sec 109 et seq. Pursuant to Sec 110 Para 1 LC, all employees employed by one employer are entitled to receive equal remuneration for the same (or equal) work or for work of the same value.
The same (equal) work or work of the same value is defined by the LC as work
(i) of the same or comparable complexity, responsibility and strenuousness:
· complexity, responsibility and strenuousness of work shall be evaluated with regard to vocational training / education and practical experience, skills required for the performance of such work, and with regard to complexity of both the subject of work and working activity, demands on organizational and managerial skills, the degree of liability for damage, occupational health and safety, and further with regard to physical, sensory and mental strain and negative effects of such work; and
(ii) which is performed under the same or comparable working conditions:
· working conditions shall be assessed with regard to tiresomeness of working time patterns, arising from the distribution of working hours, e.g. into shifts, non-working days, night work and/or overtime, and with regard to harmfulness or arduousness caused by other negative effects of the working environment and with regard to risky aspects of the working environment; and
(iii) which is of equal or comparable work efficiency and brings equal or comparable work results:
· work efficiency shall be assessed with regard to intensity and quality of work done/performed, work abilities and work qualifications/skills;
· results of work shall be assessed with regard to their quantity and quality.
Based on this specific framework, an employee brought a court case (Supreme Court File No. 21 Cdo 436/2016), claiming unequal treatment and sought compensation for having been allegedly unequally treated.
Employee worked as a cow (cowherd) nurse for calves in shed “A”. In 2011, the employer stipulated the following rules for remunerating employees:
· on top of a base salary, a cow nurse tending bulls in shed “B” was entitled to an allowance of CZK 134 and premium of CZK 50 for each 100 kilograms of body mass growth, while a cow nurse for claves in shed “A” was entitled to an allowance of CZK 150 and premium of CZK 50 for each 100 kilograms of body mass growth.
In 2012, the rules for remunerating employees changed as follows:
· on top of a base salary, cow nurse for claves in shed “A” was entitled to an allowance of CZK 100 for each 100 kilograms of body mass growth and the previous bonus was scrapped.
With regard to work environment and job characteristics, the court ascertained in its proceedings that the plaintiff – employee working as cow nurse for calves in shed “A” tended to 171 673 of livestock (calves) on average in 2012, while employees working as cow nurses for bulls in shed “B” tended to 263 660 of livestock (bulls and heifers) on average in 2012. When nursing calves, manual work prevails (71.3% of the time, with 28.7 % of the work being mechanized); on the other hand, when nursing bulls / heifers in shed “B”, mechanized works prevails (52.2% is mechanized compared to 47.8% of manual work); it is necessary to take more care with regard to occupational safety and handling of animals as bulls are more dangerous for a nurse, and there is a higher risk of accidents when tending them.
The employee who brought the suit claimed the difference between the remuneration he’d been paid and the remuneration which would be in line with appropriately adjusted salary regulation; his argumentation was that he’d have been entitled to this money if he had been remunerated in the same way as in the previous year, and especially in the same way as other employer’s employees, working in similar positions.
In the described situation, the Supreme Court had to assess which circumstances are substantial, when it comes to the question whether there exists unequal treatment when providing remuneration to employees.
The Court explained in its judgment that when it comes to evaluating whether work performed for the employer by different employees is or is not actually the same (equal) work or work of the same value for which these employees should (respectively by law must) be paid the same remuneration, all of the criteria described above (i.e. same or comparable complexity, responsibility, strenuousness, working conditions, work efficiency and work results) must be met – judged equal; otherwise, it cannot be considered the same (equal) work or work of the same value.
Thus, in this case (File No. 21 Cdo 436/2016), the Supreme Court concluded that the employee working as a nurse for calves in shed “A” was not performing work in the same or comparable working conditions as the nurse for bulls in shed “B”, because the working environment in shed “B” carried a higher degree of risk with respect to potential accidents when tending the bulls. Therefore, the work was not the same (equal) work for which the employer would be obliged to provide the employees with same remuneration.
The criteria for assessing the same (equal) work or the work of the same value described above should be carefully taken into account by employers when assessing or negotiating employees’ remuneration. Apart from possible negative psychological effects on employees who receive different remuneration for the same or equal work (or work of the same value), there exists another Supreme Court judgement (File No. 21 Cdo 3976/2013) which states that providing unequal remuneration to employees performing the same work (equal work / work of the same value) as other employees without justified reason, constitutes a breach of the employer’s legal obligations and employee subject to such unequal treatment will have the right to claim damages pursuant to the corresponding provisions of the Labour Code. Besides that, unlike for example in Germany, it makes no difference whether employers actually assess (offer) its employees’ remuneration by themselves or agree on it in an individual contract – employers are not even allowed to agree on unequal remuneration in individual contracts with two different employees, provided that these employees perform the same (equal) work or work of the same value.
 The term “remuneration” is used in this text for both “wages” pursuant to Sec 109 Para 2 LC (in Czech: “mzda”) and “salary” pursuant to Sec 109 Para 3 LC (in Czech “plat”), as well as for remuneration of employees engaged under agreements on work performed outside an employment relationship pursuant to Sec 74 et seq LC.