Leased Labor Trap: Supreme Court Expands "Equal Pay" to Benefits

Using agency workers or temporarily assigning employees between group entities has long been a standard flexibility tool. However, a groundbreaking decision by the Supreme Court has significantly increased the price tag of this flexibility. The statutory requirement to provide "comparable conditions" now explicitly extends beyond basic salary to voluntary benefits, such as pension insurance contributions.

Current Practice

Under the Czech Labor Code, employees temporarily assigned to another employer (including agency workers) must enjoy wage and working conditions that are "not worse" than those of comparable core employees. Until now, market practice - supported by previous interpretations from inspection authorities -often excluded specific non-statutory benefits from this comparison.

New Approach

In its decision, the Supreme Court reviewed the case of an employee temporarily assigned to a sister company within a holding group. The employee discovered that while he performed the same work as the host company’s core staff, he received a lower hourly wage and a significantly lower pension contribution.

While lower courts agreed to equalize the hourly wage, they rejected the claim regarding the pension contribution, arguing that such voluntary benefits do not constitute "wage conditions" under the Labor Code.

The Supreme Court overturned this restrictive view. It established that the principle of equal treatment applies broadly. It is irrelevant whether a payment stems from a statutory obligation or a voluntary internal policy (such as a collective bargaining agreement or a benefits handbook).

The Court found that if a comparable core employee is entitled to a benefit - such as a contribution to supplementary pension insurance - the assigned employee must receive it as well. Denying such benefits solely based on the "assigned" status constitutes prohibited discrimination.

Implications for Employers and Investors

This decision has immediate practical and financial consequences for two major groups:

Intra-Group Assignments: Holding companies often move staff between entities. If the "host" entity has a more generous benefits package than the "home" entity, the assigned employee must be topped up to match the host’s level.

Agency Employment: Although the specific case concerned intra-group assignment, the legal logic is identical to agency employment regulations. Companies using agency labor must now ensure that agencies are fully informed of all benefits provided to core staff - including cafeteria points, insurance contributions, or bonuses - and that these are reflected in the agency workers' pay.

Employers should be aware that this interpretation applies retroactively. Employees may claim the difference in benefits for up to three years back (the statute of limitations).

By Mgr. Ing. Jan Valíček

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