Now is the time, when most employees take their days of leave from work. In the upcoming lines, we will look more closely at what the taking of leave brings, what rules need to be observed from the perspective of the employer and what taking a leave means for the employee and his payslip.

The basic significance of a leave is first of all to provide a sufficient amount of time to the employee to regenerate himself and to be able to continue to perform his work duly.

The Labour Code distinguished between three types of leave:

• annual leave per calendar year, or its proportionate part,
• leave per days worked,
• additional leave.

Employees most frequently take a leave per calendar year or its part, if the employee has not worked for the employer the entire calendar year. The employee is entitled to leave per calendar year, if he has worked for a minimum of 60 days in a calendar year for the employer. The employee can take a proportionate part of leave, if he has worked for the employer for a minimum of 21 days. In this case, he is entitled to 1/12 of the leave for each of these 21 workdays.

The length of the leave from work is set by the Labour Code at 4 weeks in a calendar year at minimum.

Taking holidays

The time, when leave can be taken, lies within the competence of the employer. He decides, when the employee will take his leave in the course of the year. The leave must be taken by the end of the calendar year, though, according to the Labour Code. An only exception is if taking a leave is prevented by some serious operational reasons on the part of the employer. In this case, the Labour Code admits the option of transferring part of the leave into the following year. The employee must by no means lose his leave.

The leave can be taken in several parts. The condition is, though, that one of these parts must last for a minimum of two weeks. The employer also has the duty to inform the employee 14 days in advance at minimum about the taking of the leave.

The employer also must not set the time of the leave on a time, when the employee has medically certified incapacity to work due to an illness or an injury, is treating a sick family member or during the time of maternity or parental leave, or when he performs military training. In case obstacles in work occur during the time leave is being taken, the leave is automatically interrupted.

For the time of duration of the leave, the employee is entitled to reimbursement of wage or wage in the height of the average earnings. The employee will also be entitled to reimbursement of wages in the height of the average earnings in case the employment has been terminated and the employee has registered leave not taken. This is the only case, when the leave can be paid to the employee and he does not physically take it.

The way of calculating reimbursement of wages

In connection with the average earnings, we deal with another frequently discussed issue. It unfortunately happens very often that an employee, who worked an entire month, has lower wage in the end than an employee, who took his leave in the current month. Why does that happen?

The form of calculation of the average earnings is set in part XIII., title 18, section 351 and subsequent of the Labour Code. The average earning is set as gross hourly average earning, in the following way:

• from the achieved gross wage or salary and hours worked in the reference period, which is the previous calendar quarter,
• if the employee has not worked for a minimum of 21 days in the reference period, the probable earning is used.

For these purposes, all bonuses for work are included in the gross wage, that is for example bonuses for sale, bonuses for performance of work, extraordinary bonuses etc.

With bonuses that are paid for longer periods of time than a quarter, it is more complicated. There bonuses are included in the calculation of average earning only as a proportionate part corresponding to the current quarter. The remaining part of the bonuses is then gradually dissolved in other periods – they are spread evenly.

It is clear from this already that every extraordinary bonus leads to extraordinary average earning, which is then applied for the entire following quarter.

It happens regularly that an employer very frequently explains to his employees that the reimbursement for taking leave is calculated based on the average earning from the previous quarter.

Unfortunately, the provision of reimbursement based on average waged leads to inequality in remuneration, in principle. When making the calculation, though, the employer proceeds according to the Labour Code, that is he uses the set calculation of average wage for reimbursement of the leave taken.

An example of calculation of wage reimbursement

The employees X and Y have the same monthly wage of CZK 35,000 according to the wage statement. In the first quarter of the year 2018, they both work all hours planned. The average earning of each of them for this period reaches CZK 220.35 per hour. In May, employee X take a leave lasting 7 days. Due to calculation based on the average earning, his wage is CZK 673 higher than the wage of his colleague, who did not take a leave.

Calculations: The average hourly wage in 1Q 2018:

CZK 220.35

The working time in May 2018: 168 hours

Wage reimbursement for 7 days of leave: 220.35 x 56 = CZK 12,339.60

Wage for time actually worked: CZK 35,000: 168 hrs x 112 hrs = CZK 23,333.33

Total gross wage: CZK 35,673

From the given example, it is clear that in case of employees taking a leave, higher wage costs must often be expected than for those, who work an entire month without leave and other obstacle in work (seeing a doctor, attending a funeral, donating blood, etc.).

A second option may occur, though. In the month when he takes leave, an employee has lower wage than the wage specified in his employment contract. An employee will surely find out soon, when it is the most advantageous for him to take leave from the perspective of payment of reimbursement for such leave taken.

It is also a frequent complication, if wages are approved by foreign directors at a company. In these cases, it unfortunately needs to be repeatedly explained to them, why the wage is calculated in this way. That the fixed monthly wage is not fixed at all according to our laws, and wage costs cannot be predicted precisely on the basis of the wage statement alone.

The use of the average earning for calculation of the leave or obstacles to work on the part of the employee is unfortunately often discriminating to the employees, who work duly during the entire month. And yet their wage ends up being lower as a result.

The employee may also be harmed in case his wage is raised for example as of 1 May, and he takes a leave then. The average for the first quarter is used for calculating reimbursement for the leave and he thus receives lower wage for May than is actually his agreed new wage raise.

Labour law experts point out that the method of the Labour Code for calculating wage reimbursement for the leave may lead to infringement on the employees' right to just remuneration (article 28 of the Charter of Fundamental Rights and Freedoms). The Constitutional Court has not dealt with such a complaint yet, though.

The legal regulation of the average earning is also in conflict with one of the fundamental principles of labour relations, which is the right to just remuneration.

If the entire issue were resolve in the way that is common to the west of the border of the Czech Republic, it would certainly be simpler for our wage system. We can only hope and wait, if we see a change in our country as well. There are no hints at present, though, that it would be likely happen within the next few years.