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BEDRNA / BALARIN & PARTNERS

attorneys at law

Legal guidance from a trusted team of professionals

From beginning of 2022, an amendment to the Czech Civil Procedure Code and to the Act on Execution (Enforcement) of Claims shall come into force, bringing biggest changes to enforcement of claims in the Czech Republic in many years. Generally, the changes aim at strengthening the debtor's position. Ongoing enforcements, which did not bring any proceeds for more than 6 years, shall be stayed, unless the creditor pays an appropriate deposit on enforcement costs. In total, the enforcement can be prolonged for up to 12 years. Any collected proceeds shall be used to redeem the principal amount of the claim first, and – only after its full coverage – interest and creditor's costs. This makes an important difference compared to the default rules of the Civil Code. On the other hand, employers will be entitled to a fixed compensation for fulfilment of duties related to administration of attachments of the debtors' earnings. The amount of the compensation should be CZK 50 per month for each employee subject to an attachment.

For the purpose of determining the starting point of the limitation period, the knowledge of damage is given also in the case when the bearer of the right, the limitation of which is adjudged, should and could have known about the decisive circumstances, so concluded the Supreme Court of the Czech Republic. The ruling is contained in the judgment of the Supreme Court of 28 May 2020 (25 Cdo 1510/2019), published in the civil part of the Collection of Court Judgments and Opinions on 29 January 2021 under No 91/2020. Thus, a long-standing case law insisting on actual knowledge of damage has been overcome. The former approach could have led, contrary to the of the purpose of the statute of limitations, to favouring a negligent party (who did not acquaint herself with the decisive circumstances although she could and should have done it).

The Supreme Court of the Czech Republic held that employer's decision to ensure its work needs by independent contractors instead of employees was a legitimate organizational measure which could lead to employee's redundancy and, thus, justify termination of the employment by employer's notice. This legal opinion was expressed in the Judgment of the Supreme Court of 29 January 2020 (21 Cdo 2128/2019), published in the Collection of Court Judgments and Opinions of the Czech Republic under No. 88/2020. The case concerned an employee who was an opera singer, however – basically – there is no reason not to apply the conclusions also in other labor fields (of course on the condition that there is no dependent work pursuant to section 2 of the Act No. 262/2006 Coll., the Labor Code, as amended, which must be performed within employment or other basic labor relationship).

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