Fiction of an Employment Contract for an Indefinite Term

According to the Section 39 Subsection 5 of the Labor Code, if the employer and the employee agree on an employment law relationship for a fixed term contrary to Subsection 2 to 4 and if the employee notifies the employer, prior to expiry of the agreed term, in writing, that he/she insists on being further employed by the employer, it shall be deemed that the employment law relationship is concluded for an indefinite term. Both the employer and the employee may apply to the court for determination as to whether the preconditions set out in Subsection 2 to 4 above have been fulfilled, not later than within two months of the date when the employment law relationship was to end by expiry of the agreed term.

During the past years both the Supreme Court of the Czech Republic and the Constitutional Court dealt with the above stated provision.

In compliance with the established jurisprudence of the Supreme Court of the Czech Republic, just a written notification to the employer is not sufficient for the fiction of the conclusion of an employment contract for an indefinite term. The employee has to bring also an action.

By contrast, the Constitutional Court simplifies the position of the employee and is the opinion that the employee does not have to bring an action (decision dated 08.12.2015, Reference Number II. ÚS 3323/14). On the contrary it is the employer who has to bring an action if he does not agree with such change.

Recently, in relation to the above stated decision of the Constitutional Court, the Supreme Court expressed in its decision dated 26.06.2017, Reference Number 21 Cdo 1211/2017, that its opinion has not changed and that the employee has to be active and has to bring an action.