Czech Republic

By Daniel Morris | 25. April 2018

Plan format and choice of themes [page 7]

The Czech Republic enjoys the democratic rule of law, guaranteeing everyone the protection of their human rights. Human rights are defined in the Charter of Fundamental Rights and Freedoms, which is part of the country’s constitutional architecture, and in a host of international conventions that have been incorporated into national law.[1] This means that they are legally protected and enforceable.

Pillar I. State Duty to Protect

Criminal liability of legal persons in the field of human rights [pages 11-14]

Implements Principles 1 and 3a

Modern business is inconceivable without companies and cooperatives. They facilitate the concentration of funds, limit risk, and create opportunities for professional management. They are a means of implementing major business projects. However, like any other such means, companies may be open to abuse. Those who engage in crime can divide up responsibility for decisions and hide behind convoluted management structures. At large corporations, it can often be difficult to find a specific liable person. The Act on the Criminal Liability of Legal Persons resolves this by making it possible to infer that a legal person as a whole is liable.

The most serious human rights abuses can be punished as crimes. According to the case-law of the European Court of Human Rights, too, the state duty to efficiently investigate and ultimately punish infringements is central to human rights protection. However, criminal prosecution is the strongest instrument of power the state can wield, and has repercussions for employees, shareholders, creditors, business partners and others who have nothing to do with criminal activity. In this light, legislation needs to be monitored and evaluated.

While the state carries primary responsibility for human rights protection in its territory, in today’s interconnected age the stringent application of the principle of territoriality is impossible. The Czech Republic has decided that – whether unilaterally or on the strength of an international treaty – it will prosecute certain unlawful conduct by Czech nationals irrespective of where this conduct occurs. As such, it is assuming responsibility for the conduct of its nationals (including businesses) abroad, thus making it possible to fill in the regulatory gap to some extent in those cases where such conduct is not punishable under another country’s law.

Current state of play:

  • The criminal liability of legal persons was introduced into Czech law in 2011 and covered and exhaustive set of criminal acts. In 2016, the concept underlying the definition of the criminal liability of legal persons was revised so that a legal person can now be liable for all crimes other than a narrow group of acts expressly precluded by law.
  • Czech law allows a Czech citizen or a legal person established in the Czech Republic to be prosecuted even if they committed their crime abroad.
  • Foreign nationals and legal persons perpetrating a crime to the benefit of a Czech legal person may also be prosecuted.
  • Under Czech law, the most serious human rights violations[2] can be prosecuted regardless of the perpetrator’s nationality or where such violations occurred.
  • The Czech Republic is party to a number of international treaties on legal assistance and on the prosecution of various types of international criminal activity, including the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions.

Task:

  • Evaluate the impacts and practical application of the new text of the Act on the Criminal Liability of Legal Persons. If it transpires that the legislation still has loopholes impeding or preventing the prosecution of serious violations of human rights, propose amendments to the law.

Coordinator: Ministry of Justice

Deadline: 31 December 2018

Disqualification of a member of a body

Implements Principles 1 and 3b

If a company executive orders or, due to negligence or connivance, allows the company he or she manages to encroach on human rights, that executive must be found to be liable. It is always more advisable to prosecute specific culprits rather than a whole company. However, a criminal penalty is not always appropriate. Indeed, criminal prosecution appears to be too strict a response to minor or negligent breaches of the law.

One possible solution is disqualification – banning someone from holding corporate directorships. Professionals recommend disqualification as a lighter form of punishment for a number of acts directly associated with business activity. Disqualification is a punishment that is suitably harsh for the perpetrator without carrying the stigma of criminal prosecution, and does not harm the company as a whole. Furthermore, judicial proceedings in such a case are simpler and more economical.

Although current Czech law does accommodate disqualification, this is restricted to a narrow set of offences and the maximum duration is limited. In this respect, we need to explore whether the present wording of constituent elements is sufficient, i.e. whether it is broad enough for the courts to have sufficient opportunity to apply this instrument, while being definitive enough so that members of company bodies know what acts are prohibited. We should also consider what the maximum duration of disqualification ought to be for the various acts.

Current state of play:

  • The disqualification of members of governing bodies from holding such office was introduced into Czech law in 2014 by the Business Corporations Act. This makes it possible to punish those who have bankrupted their company or have repeatedly and seriously breached the tenet of due diligence. They may be disqualified for up to 3 years.
  • Members of governing bodies, influential persons and controlling entities may be disqualified.

Task:

  • Assess the use and applicability of this concept and consider whether it needs to be revised. In particular, evaluate the breadth of constituent elements, how sufficient the definiteness and precision of the law is, as well as the maximum disqualification period and variations depending on the seriousness of the act, and consider extending this concept to other persons effectively exercising influence over the running of a company. Also consider revising this concept so that it is not limited to companies, but can also be applied to other types of organisation with a different legal form. In these assessments, focus on the punishability of acts where a member of a governing body enables human rights standards to be breached either wilfully or out of gross negligence. If the concept of disqualification proves to be hard to apply in these situations, consider revisiting the constituent elements so that disqualification is easier to impose in such circumstances.

Coordinator: Ministry of Justice

Deadline: 31 December 2020

Most serious infringements of working conditions [page 16]

Implements Principles 1, 2 and 8

Even in advanced countries, we come across cases where employees find themselves in a highly vulnerable position and are required to put up with undignified working conditions, and where their employer, for instance, refuses to pay them. The victims of this abuse are frequently foreign nationals as they have limited opportunity to defend themselves. Evidence of such practices can also be found in the Czech Republic. Those working in other people’s households are another risk group. Such actions have fallout for employees, for the state (which is robbed of taxes and insurance contributions), and for honest businesses, who cannot compete with such labour.

Whereas minor cases of labour-law violations are subject to checks by labour inspection bodies, more serious cases can be prosecuted as crimes. However, for these modern-day unfair practices to be detected and prevented effectively, there needs to be coordinated cooperation between many state bodies and social partners. There may be numerous labour-law violations in supply chains, via temporary employment agencies, or at entities that act as recruiters but do not hold a permit to do so. To make it possible to stamp out these most serious forms of abuse, businesses themselves should pay attention to working conditions at their partners and, if they detect any breaches of the law, they should either demand that corrective action be taken or sever ties. The state’s role here is to create a functioning labour market that will not cater to illegal practices. This does not mean just the repression of the perpetrators, but also the shaping of conditions conducive to the legal employment of foreign nationals.

Current state of play:

  • The Czech Republic has ratified the International Labour Organisation’s Private Employment Agencies Convention (Convention No 181).
  • Directive 2008/104/EC on temporary agency work, regulating this area at EU level, and Directive 2009/52/EC providing for minimum standards on sanctions and measures against employers of illegally staying third-country nationals have been transposed into Czech law.
  • A methodological guideline of the Inspector General of the State Labour Inspectorate Authority has been issued to harmonise inspection procedures in checks focusing on temporary agency work.
  • The constituent elements of misdemeanours and administrative offences in labour law are being clarified.
  • A law is being drawn up that will tighten conditions for the establishment and operation of temporary employment agencies. Users drawing on the services of such agencies are to be made co-responsible for the observance of commensurable wage and working conditions for temporary employees, and compulsory deposits are being introduced for each agency.
  • The Ministry of Labour and Social Affairs hosts the Interministerial Body to Combat the Illegal Employment of Foreign Nationals, which plays a coordinating role, and the Economic and Social Agreement Council’s Working Party on the Mediation of Employment by Temporary Employment Agencies.
  • A Concept for the Prevention of the Labour Exploitation of European Union Citizens in the Czech Republic has been produced.
  • The Czech Republic activity combats human trafficking in accordance with the National Strategy to Combat Human Trafficking in the Czech Republic 2016-2019.
  • Czech law contains procedures to help victims of human trafficking to legalise their stay and to find work. Although victims can take their claims to the civil courts, lawsuits tend to be lengthy and arduous for someone who cannot speak the language, is unfamiliar with the legal system, and does not have the money for a lawyer. In criminal proceedings, victims may be represented by an agent, such as a non-profit organisation.
  • Under the National Strategy to Combat Human Trafficking in the Czech Republic 2016-2019, an analysis is being conducted of flaws in selected labour-law regulations that could pander to an exploitative working environment (Task 1 of the National Strategy).

Tasks:

  • Focus, via labour inspection bodies, on unravelling the illegal employment of foreign nationals and running checks on temporary employment agencies and other entities acting as recruiters without the necessary permit.

Coordinator: Ministry of Labour and Social Affairs

Deadline: Running

  • Evaluate the implementation of Directive 2009/52/EC providing for minimum standards on sanctions and measures against employers of illegally staying third-country nationals. The evaluation will include an analysis of the extra administrative burden and the ramifications for businesses.

Coordinator: Ministry of the Interior

Co-coordinator: Ministry of Labour and Social Affairs

Deadline: 31 December 2022

  • Assess whether illegal employment is genuinely being earnestly prosecuted.

Coordinator: Ministry of Labour and Social Affairs

Deadline: Running, with a comprehensive assessment on 31 December 2022

  • Make arrangements to raise foreign nationals’ awareness of their labour rights and obligations.

Coordinator: Ministry of Labour and Social Affairs

Deadline: Running

  • Raise law enforcement agencies’ awareness of issues specific to human trafficking, with a stress on victim protection and the non-punishment principle (i.e. the impunity and protection of those who have been forced into criminal activity). Take this principle into account in the preparation of legislation that may touch on human trafficking and modern-day slavery.

Coordinators: Ministry of the Interior, Ministry of Justice

Deadline: Running