Parallel work functions – the never ending story

20.10.2016
Jana Kopáčková

It seems that the “perpetual topic” of the so-called parallel work function has been solved after the submission of the new Civil Code, where the Supreme Court of the Czech Republic stayed true to its decisions from 1993 and the legal meaning was that the person, who is the statutory authority of business corporation, cannot pursue the same activity like the working relationship (business leading, leading of corporation). The Supreme Court justifies this opinion under two pillars:

1. The employment relationship pillar – the function of the statutory authority is not part of the work, as referred to in the Civil Code, it is not based on the dependent work and the creation or expiration of the legal relationship is not regulated by employment regulations
2. The business law pillar – the exercising function of the statutory authority in the work relationship is opposite to the nature of business corporations

The construction of the “Two-pilllar” argument for the ban of the parallel work function was part of our legal reality for a long time. The Legislator explicitly allowed that part of the agenda of leading a business was exercised via the so-called authorisation of the member of the statutory authority in the working relationship just for a short time (2012-2013). The authorisation of leading the business has disappeared from Czech legislation from January 2014, which made the two-pillar construction of the Supreme court about the ban of parallel work function stronger. The first pillar of this construction was annulled by The Czech Constitutional Court on the basis of its finding (I. ÚS 190/15). The result was that the dependent work is still subject to the Labour Code, which does not mean that the other legal relationship cannot be subject to the Labour Code also on the basis that the parties will, which is not about the dependent work. The Constitutional Court does not see the reason why the member of the statutory authority cannot do his activity or its part on the basis of the contract, which is in the regime of the Labour Code (connected with security elements).

The second pillar, business law, which the ban on the parallel work function is derived from, is still staying, but is a little bit uncertain. The Constitutional Court considers the general nature of the business corporation as completely insufficient and wants to hear vigorous arguments provided by ordinary courts, which forbid the exercising of the statutory authority function in the labour relationship. If the reasons directed towards the maintenance of the second pillar will be factual enough and really convincing, the ban on the parallel function could be pushed through to the Czech legislature. It will be not asserted in another other way.

The Constitutional Court also added the modern label of gender correctness to its finding: the yearly two-pillar construction of The Supreme Court is suspected of indirect discrimination against women, when the impossibility to subordinate the work function of the employment regime discourages women from staying in top managers functions, because women lack the right to maternity leave with the guarantee of returning to same work function after maternity leave and also have to solve other negative consequences during maternity leave, in case of a second child.

Let us set aside the question on the extent of discrimination against women in “top” functions for another time, but let us follow what is happening according to the ban on the parallel work functions after the intervention of the Constitutional Court’s decisions. The situation remains the same for now…




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