JŠK Legal Flash
Supreme Administrative Court upholds CZK 1 million fine for false self-employment
The Supreme Administrative Court (SAC) described as a textbook example of an elaborate "Švarc system" (i.e. false self-employment) a case in which seven self-employed persons carried out an activity under the following conditions: most of the providers worked only for the company and originally performed activities for the company under an agreement to complete a job, they used tools and uniforms rented from the company, they had no control over how much they were paid or the time, place and manner of work, they underwent OSH training, they had to follow the company's manual, and they had to invoice through the company's billing system. The SAC upheld the Labour Inspectorate's decision that the self-employed persons did not provide entrepreneurial services as the activity fulfilled the characteristics of dependent work.
(Judgment of the Supreme Administrative Court No. 5 Ads 208/2019-33 of 25 June 2020)
Lex Covid II. What measures have been prolonged or renewed in the field of insolvency and execution?
The act known as Lex Covid II responding to the ongoing coronavirus crisis will come into effect in the coming days. Pursuant to Lex Covid II, both the period of suspension of the debtor’s duty to file an insolvency petition and the period during which it is possible to file for an extraordinary moratorium under the Insolvency Act have been extended until the end of June 2021. As regards the ongoing extraordinary moratorium, it will be possible to file a request to extend it for another three months even without the consent of creditors. The enforcement of court decisions and execution of movables and immovable property in which the debtor permanently resides will be postponed until the end of January 2021. In relation to the ordering of a receivable from an account, the period in which the debtor receives a higher payment from the seized account has been extended until the end of February 2021.
Termination of employment due to redundancy and securing the employee's activities through civil contracts
The Supreme Court recently held that the grounds for giving notice of termination due to redundancy can occur if, to save money, the employer decides to outsource the creative activities to external suppliers under civil contracts.
In the case in question, to reduce costs several opera soloists were given notice of redundancy, because the employer chose to instead employ external performers through civil contracts for each individual performance. According to the Supreme Court, this does not constitute dependent work, because the performer's activity, which requires creativity and improvisation, can also be carried out by a self-employed person.
(Judgment of the Supreme Court No. 21 Cdo 2128/2019 of 29 January 2020)