Czech minister defends labour reform despite SPD criticism

A dispute has broken out within the Czech governing coalition: the SPD party has come out against a bill from Minister Juchelka that redefines the concept of “dependent work.” Trade unions argue the amendment could legalise the so-called Švarc system — working through a trade licence instead of an employment contract, currently used by more than one hundred thousand people in the country.

What the bill changes

Minister Juchelka's bill redefines dependent work as labour that an employee performs during set working hours, on behalf of an employer, who organises, supervises and gives instructions for that work. Trade unions say it is precisely this wording that opens the door to legalising the Švarc system.

“If an employer skilfully disguises even one of the signs of subordination, they will be able to claim this isn't dependent work at all. The person will remain economically dependent, embedded in the business and without any real ability to set the price or terms of their work. They won't become an independent entrepreneur, but will work in a dependent position without any protection,” the Czech-Moravian Confederation of Trade Unions said in criticising the bill.

SPD demands a rewrite

“We don't like this. We'll discuss it before the second reading and see what we can achieve. We'll try to agree on amendments,” said Lucie Šafránková, an SPD MP on the social policy committee. She stressed: “It's important to discuss this and find a solution acceptable to everyone, one that doesn't put workers at risk or water down the Švarc system. We don't want that and we don't agree with it.”

SPD parliamentary group chairman Radim Fiala said earlier on CNN Prima News that he would raise the issue at the coalition council: “It would be good to rewrite this law somehow.”

What is the Švarc system

The Švarc system is used when someone works as a sole trader for a single company instead of signing a regular employment contract. Sole traders typically pay lower contributions, and the company doesn't pay social and health insurance for them the way it would for a staff employee. In exchange, such a worker has no right to paid leave, sick pay or severance pay if dismissed.

An estimated more than one hundred thousand people in Czechia work this way. The research organisation PAQ Research has calculated that the amendment would help legalise the status of 70–90% of them.

Minister Juchelka has no intention of changing the bill: “I stand behind this proposal, exactly as it passed through the government. I defended it before the government's Legislative Council and before experts. The claim that this legalises the Švarc system is unfounded — that's the unions' assertion,” he said.

Around Prague, based on reporting by novinky.cz