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Legal newsletter July 2020

Shared job position

A recent amendment recent to the Labor Code adopted in June brings several changes the most important of which is probably the introduction of a shared job position. Its introduction is in line with the state family policy principles, and at the same time to the commitment to implement the so-called work-life balance directive. The aim of this directive is to improve employees’ balance between family and work life. A shared job should in particular enable employees with young children or those who take care of other family member to work flexible hours.

Shared job position allows an employer to employ two or more employees with shorter working hours in one job, who determine their work schedule by mutual agreement so that each of them (based on a shared working time schedule) fulfils the average weekly working time within four weeks’ balancing period.

A shared job is established by a written agreement with each of the employees who participate in the shared job position. Definite or indefinite term of this agreement is possible. At the same time, it is much easier to terminate this agreement (unlike an employment contract) even without specific termination grounds.

The precondition for the functioning of this arrangement is a precise definition of conditions for sharing the job position, i.e, the distribution of working hours between employees, the agenda handing over, or forms of substitution during vacation and illness of one of the employees. There is no automatic obligation of mutual substitution in the case of illness, and it must always be agreed individually.

The above schedule should be created by the employees themselves according to their needs and the employer should only approve it. If the schedule is not drawn up by employees then it is determined by the employer.

Although the institute of a shared job will constitute a greater administrative burden for employers (i.e. in one position two or more people with the same responsibilities will be registered and reported) given minimal risks on the part of the employer it can be an interesting way to retain certain valuable employees.


Statutory body member liability in the event of a company's bankruptcy

At the end of January 2020, an amendment to the Act on Corporations (“AoC”) was adopted introducing several significant changes in legislation related to company bankruptcy.

The amendment simplifies the procedure by which statutory body members may be held liable if they have contributed to a company’s bankruptcy by breaching their duties, in particular duty of due care.

Until now, pursuant to Art. 62 and68 of AoC, a member of company body was obliged to return any profit received from his contract for the performance of function in the last two years before the bankruptcy decision effectiveness based on a request of insolvency administrator, and at the same time creditors were entitled to claim statutory liability of company body members for debts of the insolvent company.

The amendment introduces a uniform regime of a corporate body member liability for the company bankruptcy, where during insolvency proceedings the insolvency administrator will be able to request in a single procedure that the member of the corporate body who contributed to its bankruptcy (i) returns profits received from the agreement on the performance of function; and (ii) deposit also an amount corresponding to the difference between that corporation's assets and its debts.

The period for which the administrator will be able to request profits received from the agreement on the performance of function will no longer depend on the bankruptcy decision effectiveness, but rather on the date of insolvency proceedings commencement. This excludes the possibility to change the length of this period by delaying the declaration of bankruptcy. This rule applies only in situations where the insolvency petition was filed by the debtor itself.

Výše uvedená úprava má dle zákonodárce přispět k omezení odpovědnosti člena statutárního orgánu, který již nebude při splnění zákonných předpokladů ručit za celé dluhy úpadce, ale „pouze“ do výše rozdílu mezi aktivy a pasivy úpadce.

According to the legislator, the above regulation is intended to limit the liability of statutory body members who will under certain conditions no longer be liable for the whole amount of debtor's debts, but will be responsible "only" for the difference between the bankrupt's assets and liabilities.

Despite some interpretation difficulties (namely with determining the moment as of which the duty to replenish assets in bankruptcy is counted) it is generally assumed that this change will lead to more frequent claims against statutory body members. This is because filing a claim against them will not depend solely on the company creditors themselves, and for the insolvency administrator this path will be relatively simple and the risks minimal compared to the possibility to obtain any performance to the benefit of the bankrupt’s assets. For these reasons, it is becoming even more important that statutory body members do consistently proceed in accordance with the rules of due care and pay close attention to keeping sufficient documentation and evidence related to their acts on behalf of the company.


Selected changes in the housing units’ regulation

The Civil Code was also amended this year with effect from 1 July. The amendment responds to the needs of practice by simplifying and clarifying obligations related to the unit owner community administration. In this context, the amendment mainly reduces the administrative burden, changes the rules for expressing consent to changes in the common parts of the house, simplifies a community establishment and management of house and land.

Housing units are also linked to the limitation of pre-emption right duration related to co-ownership shares to six months from the co-ownership establishment, while the possibility of sale between family members regardless of the pre-emption right during the six-month period has been maintained. The amendment should therefore simplify the sale of flats to co-owners of non-residential premises and land in houses with a large number of residential units. An example is the sale of parking slots. Due to the new regulation the co-owners no longer have to deal with the administrative burden and complications related to the possible exercise of the pre-emption right in the sale of such a share.