Finance Minister Zbyněk Stanjura has identified the rigidity of the labor market as a significant impediment to the Czech economy’s growth. In an effort to address this challenge, Stanjura and his ministry have endorsed a proposal from the National Economic Council of the Government (NERV) to introduce a layoff notice period without requiring justification in labor law, thus eliminating the current requirement for employers to justify layoffs.

Speaking in an interview on Česká Televize, Stanjura emphasized the cumbersome bureaucratic processes associated with layoffs under the current system, which often entail formal organizational restructuring and the elimination of specific job positions. He underscored the need for discussion regarding the revision of severance pay, which currently ranges between one and three average monthly salaries.

However, Alena Schillerová, leader of the ANO movement parliamentary club, has expressed reservations about the proposed reform. She argues that such a change would not necessarily enhance labor market flexibility and could adversely impact vulnerable groups, such as mothers with sick children or older employees with higher salaries. Schillerová contends that the Czech Republic faces a labor shortage rather than a surplus, casting doubt on the efficacy of the proposed reform.

The amendment to the labor code necessitating these changes would be the purview of the Ministry of Labor and Social Affairs. While the specifics of the proposed amendment are yet to be officially disclosed, it is anticipated that it may be presented for consideration later this month.

In addition to advocating for labor market flexibility, Stanjura has called for expedited permit processes for construction projects and emphasized the importance of digitization initiatives. He has also proposed streamlining business inspections to reduce regulatory burdens on enterprises. While specific strategies for achieving these objectives remain unspecified, Stanjura’s agenda underscores a broader commitment to fostering a more agile and competitive economic environment in the Czech Republic.

Article by Prague Forum