Reals has advised Conseq Realitni on its acquisition of the Ctyri Dvory shopping center in Ceske Budejovice from Reico IS CS. CMS advised the sellers.
Conseq Realitni is an investment fund.
Reico IS CS is a Czech Republic-based investment company operating in Central Europe.
The Reals team included Partners Gabriela Spak Porupkova and Miroslav Dudek and Associate Filip Balousek.
The CMS team included Partner Lukas Hejduk, Associate Sarka Hrda, and Lawyer Matous Jan Kadlecek.
The Czech Parliament and government have been unusually active in the field of labour law recently so there is a lot of legal news.
To keep up with the large number of changes, we bring an overview of the most important ones introduced by the latest so-called transposition amendment to the Labour Code with effect from 1 August 2024:
Automatic indexation of the minimum wage
The principle of determining the national minimum wage has completely changed. The minimum wage was previously determined by a special government decree, but now, an automatic indexation mechanism for its determination has been introduced into the law.
The minimum wage will now be determined as the product of a forecast of the average gross monthly wage in the national economy and a coefficient set by the government.
The Ministry of Finance will publish the average wage forecast by 31 August each year. The coefficient will be set by a government decree for 2 years in advance so that the minimum wage is proportionate to the set parameters (e.g. the cost of living or the rate of wage growth in the economy).
By 30 September each year, the Ministry of Labour and Social Affairs will publish the minimum wage for the following year. The minimum wage for 2025 has not yet been determined, but the Ministry of Labour and Social Affairs expects a significant increase in the minimum monthly wage to approximately CZK 20,800 (approx. EUR 830).
Abolition of the guaranteed wage in the private sector and introduction of guaranteed salary
The so-called guaranteed wage (basically another higher minimum wage for 8 groups of jobs according to their complexity, responsibility and workload) has been abolished, which will simplify and clarify remuneration in the private sector.
However, four levels of the so-called minimum guaranteed salary have been introduced, which will apply only to employees in public sector.
Collective bargaining with multiple trade unions
The amendment addresses a relatively common and previously difficult to resolve situation where several trade unions operating at an employer could not agree on a common approach for negotiating a collective agreement and for this reason the collective agreement was impossible to conclude.
Now, if there is no agreement between the trade unions on a joint approach within 30 days from the commencement of mutual negotiations, the employer may, under specified conditions, conclude a collective agreement only with the trade union with the largest number of members employed in an employment relationship at the employer (or with several trade unions that together having the largest number of members).
The other trade unions must be informed of this procedure and the submitted and final draft collective agreement must be discussed with them.
However, employees will have the option to block such collective agreement if a majority of them oppose the procedure within 30 days from the employer’s notification.
Remuneration for zero-hours contracts (DPP/DPC) including premiums
A major new feature in the area of remuneration is the possibility to negotiate remuneration from the zero-hour contracts – “DPP” and “DPČ” (i.e. agreement on performance of work) and agreement on work activity) including possible night work, work in a difficult working environment or work on Saturdays and Sundays. Since last year, employers have been obliged to provide these premiums also to these employees.
However, the agreement must stipulate the maximum amount of work in the specified difficult working conditions that has been taken into account in such an arrangement and the amount of additional premiums that would otherwise be granted to the employee for this reason. The employee will continue to be entitled to premiums for periods of work in excess of the stipulated amount.
We therefore recommend that you consider concluding amendments to existing agreements and do not forget to include this new provision in new ones.
Cancellation of annual leave taking schedule
Employers are no longer required to issue a written schedule for annual leave each year, which also required a prior approval of the trade union and works council. However, other rules and principles of annual leave planning remain unchanged.
Longer shifts and a new premium for healthcare workers
Employees in the healthcare sector can now be scheduled for shifts of up to 24 hours, for which they will be entitled to a new premium of at least 20% of their average earnings from the 13th hour worked.
Employee self-scheduling of working time (from 1.1.2025)
Starting next year, it will be possible to agree in writing with an employee (both in an employment relationship and on “DPP” / “DPČ”) that the employee will schedule their own working hours, subject to the basic restrictions of the Labour Code. Such an agreement can be terminated by both parties with 15 days’ notice period.
Until now, such self-scheduling by agreement has been explicitly allowed only for remote workers, and in other cases it has not been possible according to prevailing opinions.
Allowing the scheduling of working time by employees themselves outside the home office is a major step towards more flexible forms of work and a reduction of the administrative burden for employers, while there may also be an advantage for employers since some obstacles to work will not be applicable.
The upcoming “flexi-amendment” of the Labour Code
The Chamber of Deputies is currently debating another bill amending the Labour Code, which aims to significantly streamline employment relationships.
The proposed changes include in particular:
The flexi-amendment bill currently foresees to be effective as of 1 January 2025.
However, significant changes may occur during the legislative process. We are monitoring the legislative process and will keep you informed of the final proposal.
By Radek Matou, Partner, and Ondrej Sudoma, Senior Associate, Eversheds Sutherland
Eversheds Sutherland has advised Edwards Lifesciences on the USD 4.2 billion sale of its Critical Care product group to Becton, Dickinson, and Company. Baker McKenzie reportedly advised Becton, Dickinson, and Company.
Edwards Lifesciences is an American medical technology company headquartered in Irvine, California, specializing in artificial heart valves and hemodynamic monitoring. The Critical Care product group operates in advanced patient monitoring with advanced AI algorithms serving millions of patients globally.
Becton, Dickinson, and Company is a medical technology company.
The Eversheds Sutherland team included Czech Republic-based Partner Jaroslav Tajbr and further team members in the UK.
Editor’s Note: After this article was published, Kyriakides Georgopoulos announced that it advised Becton, Dickinson, and Company as well.
Following more than six years as a sole practitioner, Pavel Vrany has joined Tarpan Legal as Associate Partner.
Between 2012 and 2017, Vrany worked for Havel & Partners. Earlier, he spent ten years with Baker McKenzie. He started his career in 2001, with a year and a half stint with Weinhold.
Weinhold has advised TTS Tooltechnic Systems Beteiligungen on the disposal of its full ownership interest in Narex.
TTS Tooltechnic Systems Beteiligungen is a power tools producer headquartered in Wendlingen.
Founded in 1943, Narex is a manufacturer of hand power tools in the Czech Republic.
The Weinhold Legal team included Partner Daniel Weinhold, Managing Associate Tomas Cermak, and Senior Associate Karin Konecna.
Weinhold did not respond to our inquiry on the matter.
Editor’s Note: After this article was published, CEE Legal Matters learned that PPS Advokati advised Schipro as the buyer. The firm’s team included Partners Ervin Perthen and Milan Chmelik and Law Clerk Eliska Schiller.
Schoenherr, working with Gleiss Lutz, has advised Rehau Automotive on the sale of its European sealing and extrusion business unit to Vintech Industries. Taylor Wessing reportedly advised Vintech Industries.
Rehau Automotive is part of the Rehau Concern group, which consists of five companies including Meraxis, New Ventures, Raumedic, Rehau Automotive, and Rehau Industries. Specializing in polymer-based solutions, the family-owned company generates annual sales of over EUR 4.5 billion.
Vintech Industries is a US-based automotive parts supplier.
The Schoenherr team included Partner Vladimir Cizek, Counsels Michal Jendzelovsky and Helena Hangler, and Attorneys at Law Petr Koral and Kristyna Zmatlikova.
Between new consumer class action laws to anticipated reforms in employment regulations, Dentons Czech Republic Co-Managing Partner Ladislav Smejkal highlights reports on how the evolving legal framework could significantly impact businesses, particularly in sectors where consumer protection is paramount.
“The primary development I’d highlight is the recent implementation of the EU’s class actions directive, which came into force on July 1, 2024,” Smejkal begins. “This is a significant shift for us because it introduces a new way of handling consumer disputes. Now, when more than ten consumers have a similar claim, they can be represented collectively in court.” According to Smejkal, this change could significantly impact big corporations, particularly in sectors like banking, insurance, online shopping, and transportation, where disputes often involve “unfair fees, contractual terms, or other conditions that customers might contest.”
Moreover, Smejkal anticipates that “class actions will particularly affect large companies – banks dealing with customer fees, insurance companies, and even transport providers like bus and airline operators. Cases could involve anything from defective products to unfair practices in charging fees.” He feels this to be a real game-changer because “we haven’t historically been a country where people frequently go to court for compensation. For foreign investors, especially those with a significant presence here, understanding and preparing for this new litigation landscape will be crucial.”
Another key development Smejkal highlights is “the long-awaited amendment to what we call ‘the attorney’s tariff,’ which dictates the non-contractual compensation for legal services.” This tariff, which determines the fees for court-assigned defense counsel or when the winning party claims attorney fees in litigation, hadn’t been updated since 2006 despite inflation and rising costs, Smejkal reports. “This amendment is a significant win for us lawyers, as it better reflects today’s economic realities. The Czech Bar Association has been lobbying for this change for years, and while it’s a positive step, we hope it won’t be the last.”
Additionally, Smejkal reports of an “ongoing debate about abolishing the role of non-professional judges in criminal cases – a relic from our communist past when workers were encouraged to participate in the judiciary. The Ministry of Justice proposed a law to remove these lay judges to streamline the justice system, arguing that their presence often complicates proceedings.” According to Smejkal, the law was passed by parliament but vetoed by the president, who called for more discussion. “Despite the veto, I believe this reform will eventually pass as it’s aimed at making the system more efficient.”
Finally, Smejkal reports that major changes to the employment law framework are in the works. “We are on the brink of a significant overhaul of employment laws, aiming to introduce more flexibility, particularly in dismissal procedures. There’s a proposal to reduce the notice period for underperformance cases to one month and shift the burden of severance payments for occupational injuries from employers to state insurance,” he explains. However, some of the considered changes are controversial and have sparked substantial political debate. “In our country, it’s currently impossible to dismiss someone without a clear reason, unlike in Anglo-Saxon legal systems, so these amendments, if passed, would mark a substantial shift,” Smejkal says. He notes that it is hard to say if the changes will pass. “There’s a lot of resistance, especially from those who argue for protecting employee rights. While some changes might get through, I doubt we’ll see a complete overhaul allowing dismissals without reason anytime soon,” he concludes.
Glatzova & Co has advised on the establishment of the investment fund Julius Meinl Investment SICAV and its sub-fund – The Julius Sub-Fund 2024.
According to Glatzova & Co, “through The Julius Sub-Fund 2024, investors can invest in shares and bonds of Julius Meinl Living Plc, a company that develops and operates luxury hotel residences in Europe. The flagship project of Julius Meinl Living Plc is The Julius Prague on Senovazne Namesti, a 168-room luxury hotel residence. The company also operates another hotel property in Budapest, and the opening of the new The Julius residence in Bucharest is expected soon.”
The Glatzova & Co team included Partner Libor Nemec and Managing Associate Andrea Pisvejcova.
Kocian Solc Balastik has advised KGAL Investment Group on its acquisition the 50-megawatt Saxonie solar power plant project from Sev.en and Micronix Group. Sole practitioner Petr Vorisek advised the sellers.
KGAL’s investment group has focused on real estate, sustainable infrastructure, and aviation since 1968. It manages investments of approximately EUR 16 billion.
According to KSB, “the development of Saxonie will launch soon near the town of Most, close to the German border. The project, which is one of the largest of its kind in the Czech Republic, will contribute significantly to increasing the share of green power plants in the Czech Republic’s energy mix. The electricity generated in the PVPP will be sold primarily under long-term power purchase agreements.”
The KSB team included Managing Partner Martin Krejci, Partner Tomas Sequens, Attorney at Law Jana Guricova, and Lawyers Josef Kriz, Richard Hamran, and Tomas Zach.
On September 2, 2024, A&O Shearman announced that Macquarie Asset Management’s sale of GasNet to CEZ (reported by CEE Legal Matters on April 2, 2024) has now closed.
As previously reported, A&O Shearman advised Macquarie Asset Management on the disposal of its 55.21% indirect interest in GasNet and GasNet Sluzby, at a total enterprise value of approximately EUR 4 billion. Skils advised CEZ on the acquisition.
According to A&O Shearman, GasNet is the Czech Republic’s largest gas distribution network. GasNet Sluzby is GasNet’s associated network maintenance and operations business.
“The regulated gas distribution network transports energy to 2.3 million connection points via 65,000 kilometers of pipelines that cover 80% of the country,” A&O Shearman reported.
The Allen & Overy team included Prague-based Partner Jan Skuhravy, Senior Associates Cathy Gilmartin, Jana Chwaszcz, and Ivana Halamova Dobiskova, and Associates Martin Vykopal and Denisa Jonasova, along with further team members in London and Luxembourg.
The Skils team included Managing Partner Karel Muzikar, Partners Roman Janecek, Jiri Kindl, and Pavel Grim, and Senior Associates Ivo Trojan and Martin Pastor.