Agreements on work performed outside employment

Agreements on work performed outside employment are in practice widely used to regulate the labour relation between the employer and the employee. Compared to the employment relationship, they are characterised by greater contractual freedom and absence of many statutory restrictions or, on the contrary, mandatory arrangements typical for the employment relationship. For example, under agreements on work performed outside employment, the employer is not obliged to schedule working hours for the employee engaged under such a contract, i.e. to determine the start and end of the shift. However, this does not mean that the employee is not obliged to perform work of a certain type or during certain working hours. Even an agreement on work performed outside employment should contain a definition of the work task or activity, the place of its performance, the scope of working hours, the term for which the contract is concluded or the agreed remuneration.

We distinguish:

• agreement to complete a job
• agreement to perform work

The Labour Code sets almost no restrictions on the conclusion of agreements on work performed outside employment. It is entirely up to the employer’s discretion whether to enter into an employment contract or one of the agreements with the employee, although the Labour Code expressly favours the employment relationship. These agreements are most commonly used for seasonal work, students, people receiving a pension or people on maternal or parental leave, who usually do not work full-time, but also for casual or short-term work. Work carried out under an agreement on work performed outside employment is generally subject to the employment relationship regulations. However, this is not the case when it comes to:

• transfer to another job and reassignment
• temporary assignment
• severance pay
• working hours and rest periods
• obstacles to work on the part of the employee
• leave
• termination of employment
• remuneration (excluding minimum wage)
• travel allowances

Agreement to complete a job

The first type of agreement is an agreement to complete a job, where the expected scope of work cannot exceed 300 hours per calendar year. If the agreement is concluded for a term of one year from June to June of the following year, the maximum number of hours will be calculated separately for each year, i.e. a maximum of 300 hours from June to December and a maximum of 300 hours from January to June of the following year. In this case, the total workload will be a maximum of 600 hours. This also includes the period during which the employee performed work for the employer under another agreement to complete a job in the same calendar year, even if the work is not of the same type. If the limit is exceeded, the labour inspection authority may impose a fine of up to CZK 2,000,000 on the employer. It should be noted that no social security and health insurance contributions are paid under an agreement to complete a job if the monthly income under the agreement to complete a job is less than CZK 10,000 (note: however, please note that income under different agreements to complete a job with the same employer is aggregated).

Agreement to perform work

The second type of agreement is an agreement to perform work, under which it is not possible to perform work exceeding on average half of the fixed weekly working hours for a specific employer (i.e. more than 20 hours per week). However, individual agreements to perform work concluded by one employee with the same employer are not aggregated in a calendar year, so the employee can conclude several of them (including a combination with an agreement to complete a job), each of which will be treated separately. Compliance with the above limit is assessed over the entire term (i.e. on average) for which the agreement was concluded, but no longer than 52 weeks.

Therefore, an employee may work irregularly and, for example, exceed the set limit in some weeks and work for more than half of the fixed weekly working hours, while working less in other weeks. Nevertheless, the employee cannot circumvent the limit by working full 26 weeks and then not coming to work at all for the next 26 weeks. This is the purpose of work in a fixed-term employment relationship. Unlike an agreement to complete a job, the scope of work may exceed 300 hours per calendar year. If the limit is exceeded, the labour inspection authority may impose a fine of up to CZK 2,000,000 on the employer, as in the case of an agreement to complete a job. It should be emphasised that if the remuneration does not exceed CZK 3,499 per month, the employer does not pay any social security or health insurance contributions under this agreement.

Conclusion

There is no probationary period for work carried out under an agreement unless the parties expressly agree otherwise, but there is no practical need for this as both parties may terminate the cooperation unilaterally at any time without stating a reason. The agreements may also stipulate, among other things, the manner of their termination.

If there is no such arrangement, the labour relation may be terminated:

• by agreement of both parties as of the agreed date
• by notice given for any reason or without a reason; the notice period is fifteen days and begins on the date on which the notice is delivered to the other party
• by immediate termination; this possibility can only be agreed for cases where an employment relationship can be terminated immediately

It is important to emphasise that if the agreement is terminated unilaterally, the employee is not subject to the provisions on protections periods applying, for example, to pregnancy, maternal or parental leave. However, in the case of agreements, the invalidity of the termination can be challenged in court within two months from the date on which the work performed under the agreement to complete a job was to end by this termination.

Again, we would like to stress here that the time limit is a lapse period, which means that the right ceases to exist after the expiry of the time limit and it is no longer possible to seek a declaration that the legal act terminating the employment relationship is invalid. It is therefore advisable to have the action for the annulment of the termination of employment drafted by experts to avoid losing the right to challenge its invalidity. We will be happy to provide you with the necessary legal assistance in this regard.

What issues do we typically handle for clients in relation to agreements on work performed outside employment?

• Under what circumstances is it more advantageous to conclude an agreement to complete a job or an agreement to perform work?
• What is the legal difference between an agreement to complete a job and an agreement to perform work?
• Assessment of validity of an agreement to complete a job/perform work
• When and how can I terminate an agreement to complete a job?
• When and how can I terminate an agreement to perform work?
• How to draw up an agreement to complete a job/perform work
• Taxation of work for agreements to complete a job/perform work
• Social security and health insurance for agreements to complete a job/perform work
• Taxpayer declaration (“pink form”)
• Changes in the legislation concerning agreements to complete a job/perform work for employers
• Agreements to complete a job/perform work for foreigners
• Termination of agreements to complete a job/perform work