Czechia: Wide-ranging reforms to the Labor Code

Employer Action Code: Act

Parliament has approved the so-called Flexible Amendments to the Labor Code (Act No. 120/2025) aimed at increasing the flexibility of labor relations in the interests of both employers and employees. The changes touch on a variety of matters across the life cycle of employment, from probationary periods to termination.

Key details

The act was promulgated on April 29, 2025, and largely takes effect on June 1, 2025 (with some exceptions noted below). Changes include:

• Probation — The maximum duration of probationary employment will increase from three to four months (from six to eight months for managers), and employers will have a new option to extend existing probationary periods during their terms (subject to the maximum duration limit).
• Family leave — Employees returning to work from parental leave will be entitled to reinstatement to their same job and workplace on the same basis as currently applies to women returning to work from maternity leave, until the child reaches age two.
• Termination — The two-month notice period for termination by the employer will start on the day notice is provided rather than the first day of the calendar month following provision of the notice. The notice period in the case of dismissal for cause will be reduced from two months to one month. For termination due to the inability of the employee to perform their usual duties because of long-term ill health or disability (from occupational or non-occupational causes), the existing employer-paid compensation amount (12 months’ average salary) will be reimbursable by workers compensation insurance.
• Fixed-term employment — The current limit on the number of renewals of fixed-term employment contracts will be eliminated in the case of temporary substitution of employees on maternity, paternity or parental leave, replaced by a general limit of nine years in total of fixed-term employment in such cases.
• Pay confidentiality clauses — The use of such clauses to keep employees from sharing their pay information will be prohibited.
• Medical examinations — The requirement for pre-employment medical exams will no longer apply to employees performing work in the lowest risk category (according to the Public Health Protection Act).
• Unemployment benefits — The unemployment benefit system will be revised; changes include increasing the allowance payable for the first two months from 65% to 80% of the national average wage and increasing the age limit for extended benefits from age 50 to 52 (effective January 1, 2026).

Employer implications

According to the Ministry of Labor and Social Affairs, the amendments are in response to the current needs of the labor market and will strengthen employer competitiveness while preserving the protection of employees' rights and promoting a better balance between work and family life. Employers should review the changes (which include others beyond those noted above) and consider the effects on their employment policies and practices.