Major changes in the field of annual leave

In the course of this year, the long-discussed – and in many ways problematic – amendment to the Labour Code has been adopted. Although the amendment was approved in a rather reduced form compared to the original plan as a result of complicated negotiations, it brought a number of significant changes. Some changes took effect on 30 July 2020 and we are slowly getting used to them. Other changes contained in this amendment will take effect from the new year. Probably the most fundamental change that awaits us is the change in how annual leave is calculated.

New calculation for annual leave

The basis of the change is that annual leave will no longer be calculated in days, but in hours, with regard to the set weekly working hours of the employee. This change should lead to a fairer calculation of leave, especially for employees with irregular working hours and for part-time employees.

The new legal regulation primarily stipulates only one type of annual leave, namely “annual leave for a calendar year,” or its proportional part, if the employee has not worked for the employer for the whole year. The new legislation moves away from the concept of “annual leave for days worked.” The institute of the so-called additional annual leave for some special operations is maintained, but we will not deal with this further.

The determination of the basic amount of annual leave remains in weeks, with the minimum amount being four weeks, as is the case under current legislation. However, the specific amount of leave will be calculated in hours as a multiple of the basic amount of annual leave, the employee's set weekly working hours and the number of weeks in a calendar year (ie 52 weeks). An employee who has worked a full year with 40 hours as set weekly working hours will be entitled to 160 hours of annual leave. When taking annual leave, the employee’s entitlement to annual leave will be reduced by the number of hours that fell on the shift, when the employee took annual leave.

If an employee has not worked for the employer for the entire calendar year, they will be entitled to a proportional part of the annual leave if they work for the employer for at least four weeks. In this case, for each week worked, the employee will be entitled to 1/52 of their total annual leave entitlement for the calendar year.

The Labour Code will also provide for a variant that the employee works more than their set annual working hours with the employer in a calendar year and this can be taken into account in their entitlement to annual leave. In this case, for each additional set weekly working hours worked, 1/52 of the employee's total entitlement to annual leave shall be added. This can typically occur for employees working irregular working hours.

An important novelty for part-time employees is that the calculation of the entitlement to annual leave will also take into account any changes in the amount of working hours during the year. If an employee has more than one period with different levels of working hours within one year, the calculation of the annual leave entitlement will be proportional.

Shortening annual leave

A fundamental change is also the fact that annual leave will no longer be reduced due to impediments to work. The only possible reason for reducing the annual leave will remain the unexcused absence of the employee. But beware, it will only be possible to shorten the annual holiday for the same amount of time as the unexcused absence.

However, the Labour Code will stipulate that for certain impediments to work, its duration will be assessed for the purpose of entitlement to annual leave only to a limited extent, up to a limit of 20 times the set weekly working hours of the employee, and even only if the employee has worked at least 12 times their set weekly working hours in a given calendar year. Impediments involving temporary incapacity, quarantine and parental leave will be counted in this limited extent.

Transfer of annual leave

The possibility to transfer annual leave to the following calendar year is also a novelty. But this will only be possible for annual leave beyond the basic amount of annual leave. Please note, however, the annual leave transferred in this way must be used in the following year, so untaken annual leave cannot be cumulated. At the same time, the employee will have to request this transfer of annual leave in writing.

Summary and recommendations

These changes represent a relatively fundamental change in the concept of annual leave, which will need to be reflected in the personnel systems of employers. However, the suppliers of the relevant personnel systems are certainly ready for the change and should be able to have them implemented as of the new year. Some of the new rules in the area of annual leave bring certain ambiguities in specific situations, which have recently resonated with the professional public, but in practice and with time, the system should become clear.

If you encounter any problems or ambiguities during the implementation of the new annual leave concept, do not hesitate to contact us. We will be happy to help you with this. Also, do not forget that the amendment to the Labour Code brings, in addition to the changes effective from 30 July 2020, other changes from the new year, such as the new institute of a shared work position and other minor changes.

If you have any questions please contact your usual contacts at DLA Piper Prague.