The Duty to Keep Documents Proving the Employment Relationship at the Workplace

For the purposes of the Employment Act, Section 133 defines the workplace of the inspected person, that is the employer, as the places designated for and usual for the performance of the inspected person's (the employer's) activity. The activity of the inspected person means securing production or providing services and comparable activity under special statutes.

Although no legal provision expressly defines the term "a place designated for the performance of the employer's activity", a grammatical interpretation leads to the conclusion that it covers a place which the employer has designated to the employee for the performance of work. Seen in that light, it will primarily be the place (or places) of work under Section 34(1)(b) of Act No. 262/2006 Coll., the Labour Code, as amended (the "Labour Code"), agreed in the employment contract or in agreements on work performed outside an employment relationship. Where the place of work has been agreed more broadly, for example within a municipality, a region or the whole of the Czech Republic, any place which the employer has designated or otherwise identified to the employee as the place of work counts as a place designated for the performance of the inspected person's activity.

Nor can it be overlooked that the Employment Act expressly provides that the workplace of the inspected person (the employer) is a place designated for and at the same time usual for the performance of the employer's activity. Because the conjunction "and" is used, both conditions must undoubtedly be met before the place where the employee performs work for the employer can be regarded as the employer's workplace within the meaning of Section 136 of the Employment Act. Unfortunately, in the complete absence of any decisions of the higher courts, it cannot be stated conclusively what the legislature regards as a usual place; we nevertheless consider that only a place or workplace where the employee actually and usually performs his work can be treated as a "usual place". In this connection it must be noted that a vehicle used by an employee working as a driver may also be understood as a usual place. In our view, only where both of the above conditions are met, a designated place and a usual place, is it possible to speak of the "employer's workplace" within the meaning of the Employment Act.

The existence of an employment relationship may be proved by a copy of the employment contract or of an agreement to perform work, as stated in the methodological instruction of the Státní úřad inspekce práce (State Labour Inspection Office).1 That instruction also allows an employer with a larger number of small workplaces, or where the special nature of its activity so requires, to prove the existence of the employment relationship by copies of documents in electronic rather than paper form. Specifically, the instruction provides: "Where an employer has several workplaces with a small number of employees, or where the special nature of its activity so requires, submission of copies of employment contracts or agreements stored in electronic form (scanned original contracts, for example in pdf format) on storage media such as CDs, DVDs, flash drives and other computing devices, with the option of printing them in order to document the results of the inspection, is regarded as satisfying this duty." In our view, however, this interpretation, permitting copies of the required documents to be submitted electronically only in certain cases, goes beyond the statute, because the legislation draws no distinction between a copy in paper and in electronic form; the Labour Inspectorate should therefore accept employment and comparable contracts in purely electronic form as well.

We take the view that, in order to preserve the protection of sensitive personal data, it will be possible to redact data that are not material for the inspection being carried out. The exception would be the identification of the employee and the employer, the agreed working hours, the type of work and the place of work, since precisely these details are material for the inspection.

The methodological instruction referred to above directs inspectors of the Labour Inspectorate to treat an employer's failure to submit the documents during the inspection at the workplace as the performance of illegal work under Section 5(e) of the Employment Act, because subsequent submission of the required documents has no bearing on that assessment. We cannot agree with that conclusion, because in our view the absence of illegal employment may also be proved by other means, for example by the employer's long-standing social security and health insurance contributions for the particular employee. The Employment Act does not directly link a breach of the duty under Section 136 of the Employment Act with the imposition of a fine for an administrative offence under that Act. Although we do not regard the approach of labour inspectors relying on the instruction described above as legally correct, fines will in practice indeed be imposed, since an employee of the Labour Inspectorate is bound to follow that instruction.2 That conclusion does not mean, however, that an employer penalised for enabling the performance of illegal work solely because it did not keep a copy of the employment contract (or a comparable contract) at the workplace, where no illegal employment was in fact taking place, could not challenge the fine through the administrative courts.

1 See http://www.mpsv.cz/files/clanky/12728/tz_030412a2.pdf

2 Fines for the administrative offence consisting in the employer enabling the performance of illegal work reach amounts from CZK 250,000 to CZK 10,000,000. A natural person who performs illegal work may be fined up to CZK 100,000.