Alien’s Position in the Administrative Proceedings Permitting Working in the Czech Republic

JUDr. Martin Štefko, Ph.D.

Abbreviations

Administrative Code - statute No. 500/2004 Coll., Administrative Code [in Czech “správní řád”] as amended by Act No. 413/2004 Coll.

Employment Act - statute No. 435/2004 Coll., on Employment [in Czech “zákon o zaměstnanosti”] as amended by Acts No. 202/2005 Coll., No. 168/2005 Coll., No. 253/2005 Coll., No. 428/2005 Coll., No. 350/2005 Coll., No. 444/2005 Coll., No. 495/2005 Coll., No. 382/2005 Coll., No. 413/2005 Coll., No. 161/2006 Coll., No. 109/2006 Coll., No. 115/2006 Coll., No. 214/2006 Coll., No. 165/2006 Coll., No. 109/2006 Coll.

Employment Act of 1991 - statute No. 1/1991 Coll., on Employment [in Czech “zákon o zaměstnanosti”] as amended by Acts No. 305/1991 Coll., No. 578/1991 Coll., No. 231/1992 Coll., No. 307/1993 Coll., No. 39/1994 Coll., No. 118/1995 Coll., No. 160/1995 Coll., No. 289/1997 Coll., No. 167/1999 Coll., No. 118/2000 Coll., No. 369/2000 Coll., No. 155/2000 Coll., No. 474/2001 Coll., No. 2/2002 Coll., No. 220/2002 Coll., No. 151/2002 Coll., No. 198/2002 Coll., No. 311/2002 Coll., No. 220/2002 Coll.

Immigration Act - statute No. 326/1999 Coll., on the Residence of Foreign Nationals in the Czech Republic [in Czech “Zákon o pobytu cizinců na území České republiky a o změně některých zákonů”] as amended by Acts No. 140/2001 Coll., No. 140/2001 Coll., No. 151/2002 Coll., No. 217/2002 Coll., No. 222/2003 Coll., No. 217/2002 Coll., No. 436/2004 Coll., No. 539/2004 Coll., No. 559/2004 Coll., No. 428/2005 Coll., No. 501/2004 Coll., No. 161/2006 Coll., No. 230/2006 Coll., No. 161/2006 Coll., No. 136/2006 Coll., No. 165/2006 Coll., No. 112/2006 Coll.

I. Introduction

While working abroad may be attractive, it is obvious that not everybody can manage it.[1] Labour pool is generally limited and immigration is subject to state’s impacts, executed in the frame of employment policy, which aims primarily at avoiding competition with the domestic labour force. Most widely used tools thereby are administrative barriers in the form of permission. Access to the Czech labour market is complicated by three barriers which employers and foreign employees have to overcome before an alien may start to work. The first one is the “Permit for Recruitment of Employees from Abroad” which must be obtained by a future alien’s employer. The subject of the remaining permits is the alien himself. These administrative acts are the employment permit and the residence permit.

Firstly, everyone who wants to hire an alien or to be employed by an employer settled in the territory of the Czech Republic has to face mere shortage of literature in English dealing with employing foreign workers. Hence this is the issue we want to address. However, as already stated in the title of the article, our topic is more specified and sophisticated. Thus, Czech employment regulation will be introduced to the reader only in so far to enable one uncover some issues vested in administrative proceedings dealing with recruiting and employing an alien from abroad[2].  These are three: firstly, the definition of an alien as a party in proceedings allowing recruiting and employing a person from abroad, secondly “employment” as the object of these proceedings and finally the controversial question whether an alien fulfilling all the necessary requirements has the right to obtain an employment permit.

Below we will focus on employing non EU-citizens or their family members, because since 1^st May 2004 these people have the right to move and reside freely in the Czech Republic. The performance of their work is not conditioned by an employment or a residence permit.

II. Overview of Legislation in Force

The basic substantive law regulating the access and employment at the Czech labour market is the Act No. 435/2004 Coll., on Employment. An employer planning to take on an alien must first announce a vacancy to the competent Labour Office within 10 days from the day, when this place was created or eased.[3] Afterwards, the employer is obliged to file an application for the permit to recruit employees from abroad. The permit is issued only for those vacancies which could not be occupied by job seekers registered with the local Labour Office ( the so-called “test of labour market”).[4]  For filing an application one has to pay a filing fee of CZK 2000.[5]

Foreign nationals (and persons without citizenship) may be employed, provided they possess an employment permit and a residence permit. The employment permit scheme is controlled and administered by the Ministry of Labour and Social Affairs (hereinafter “Ministry”) whereas the questions of stay and the need for any visa falls into the competence of the Home Office. In operating the scheme the Ministry is exercising an immigration function but an application for an employment permit is not an application for leave, and the Ministry is not an agent for the Home Office in relation to any leave.

A foreign national may apply for the issuance of an employment permit either in person or through a proxy authorised under a written power of attorney, or through his/her employer for whom the foreign national will work, or to whom he/she will be assigned to work by his/her foreign employer, based on a written power of attorney. The application should be filed before the alien’s arrival in the Czech Republic. The employment permit is required both if the foreign national is to work for his/her employer on a full-time basis or on a part-time basis. For docketing costs arising from the proceeding concerning the issuance of employment permit the local Labour Office collects a filing fee of CZK 500.

After the submission of an application, the competent body, the local Labour Office, will hold an administrative proceeding whose subject is the same as in the case of the permit for the recruitment of employees from abroad. The administrative act shall be issued to an alien if there are registered job-seekers meeting the requirements requested by the employer for giving the place to the employee, and if this is in accordance with the labour market situation in the Czech Republic.

The Labour Office has to investigate if the vacancy cannot be filled by any registered job-seeker in the Czech Republic. The emptiness of one and the same job is so examined twice at first during the proceeding concerning employer’s request for the permit to recruit employees from abroad and the second time within the administrative procedure of decision-taking about the employment permit. The difference between both proceedings consists only in the character of an applicant.[6]

An alien is allowed to work on base of an employment permit only for a definite period of time coinciding with the duration of the contract of employment, but not exceeding one year. The alien's employment permit may be renewable for a similar period several times. The permit is non-transferable, it is valid only for the employment and the employer stipulated in the Labour Office’s decision. This also applies to the type of employment and the place of employment.

The performance of the work without an employment permit is considered as illegal work and constitutes a criminal offence.[7] Despite the former Employment Act of 1991 which made it possible to punish only an employee as an offender, the Labour Office has the right to impose a fine upon the employer up to CZK 2.000.000 under the valid Employment Act.

The conditions of living of foreign nationals are set out in the Act No. 326/1999 Coll., on the Residence of Foreign Nationals in the Czech Republic which regulates the entry to, the stay in and the departure from the Czech territory. An alien must obtain an entry clearance called “residence permit” which is the third and usually the last requirement for working abroad. The permit has to be granted before an arrival in the Czech Republic.[8]

Apart from the principle that every employer needs a permit for the recruitment of employees from abroad and every alien an employment and residence permit mentioned above, a confusing range of exceptions for each permit separately is laid down. The most interesting exception links to senior manager staffs whose employment relationships are established by an appointment or an election.[9]

The special features of an alien’s employment, if such relation is governed by Czech law, are defined in the Labour Code and they are linked especially to the establishing[10] and dismissing[11] of employment relationship. Deviations from this general regulation can be found in some special laws, e.g. the Act No. 61/2000 Coll., on maritime navigation modifies the employment’s conditions for the crew working on a ship. Regarding the topic of this article, the main difference consists in immigration clearance for the crew from the employment permit and the residence permit.

Administrative proceedings allowing the recruiting and employing of an alien from abroad are governed primarily by the Employment Act and the Immigration Act. Due to their character as particular laws, the Administrative Code shall be applied as far as the provisions of special laws are not sufficient (subsidiary application).

III. The Concept of a Party in Administrative Proceedings Concerning Working in the Czech Republic

The general definition affecting all administrative proceedings which have no particular regulation is laid down in s. 27 of the Administrative Code. Pursuant to the mentioned section, the party in all three proceedings allowing the recruiting and employing of an alien from abroad is an applicant. In the proceeding dealing with the employment and the resident permit this is an alien, in the third remaining procedure an employer.

III.1 Who is an alien?

The legal concept of an alien is specified in several Czech laws, although it has to be stated that the definitions are not the same. The Employment Act defines an alien as a person who is neither a citizen of the Czech Republic or European Union nor family member thereof. According to the Immigration Act every person who is neither a citizen of the Czech Republic, nor a European national is an alien. Another stipulation can be found in the ninth section of appendix of the statute No. 634/2004 Coll., on administrative fees. An alien is described hereto as only such person who is obliged to obtain an employment permit for working in the Czech Republic.

Pursuant to s. 3 (1) of the Employment Act, an alien may function as a party in proceedings allowing the recruiting and employing of an alien from abroad only if he/she is capable of being employed in the Czech territory. Nothing more is stipulated. There is only a footnote, which is enclosed to the end of s. 3 (1), referring to s. 11 of the Czech Labour Code. However, according to decisions of the Constitutional Court the footnotes are not a directive part of the law but have only explanatory meaning[12] which enables us to take another provision of the Czech law into consideration. An alien constitutes the so-called “foreign element” [in Czech “mezinárodní prvek”]. Consequently, in legal relations there are more national laws in question capable to govern the relations. For example the capability of a Ukrainian worker applying for a job in the Czech territory could be evaluated, in the absence of any international treaty, according to Ukrainian or Czech law.

In the Czech Republic, the conflict of laws is regulated by statute No. 97/1963 Coll., on private international law and procedural law (hereinafter “CLA”)[13] the statute shall apply to (...) employment relations and other similar relationships with a foreign element unless there is an applicable international treaty. Pursuant to s. 3 (1) of the CLA the legal competence [in Czech “způsobilost k právům a právním úkonům”] is governed by the law of the state whose citizen the alien is. Provided an alien performs a legal act on the territory of the Czech Republic it is enough if he/she is competent of such act according to Czech law.[14]

A partial problem to think about is the fact that the process of enabling an alien to work lies within the area of public law where the application of a foreign rule to domestic relations is generally denied[15]. Nevertheless, we want to highlight that the Employment Act itself does not define legal competence. It leaves this regulation to another law which belongs to the area of Civil law. In addition, the Supreme Court decided that the recruitment and employment of an alien, including the issue of permits, shall be regulated by the CLA.[16]

Thus we have two contrary provisions regulating the legal competence of an employee. The first one is contained in the Labour Code and grants legal competence to every natural person who has attained the age of 15. The second provision, s. 3 (1) of the CLA, refers to an alien’s home law. This conflict of laws should be solved with the help of s. 11 (2) of the Labour Code. The prohibition of child labour for every natural person till he/she reach the year of 15 and passes compulsory school attendance is laid down here. Persons who don’t fulfil the requirements mentioned in the previous sentence are considered to be children and are allowed to perform only some activities in arts, sport and publicity (see s. 121 of the Employment Act).

The aim of s. 11 (2) of the Labour Code is definitely the protection of a party´s interests but it also constitutes a ground stone of society as a whole. If the freedom of contract in relations without a foreign element is limited by ordre public, which does not let room to the parties involved to determine the content of an employee’s legal competence, consequently the same principle must restrict the application of foreign law.[17] Another argument entrenching the use of foreign law is the fact that the child’s work within legal borders must be permitted by the local Labour Office (principle of territory). Therefore s. 11 (2) of the Labour Code is an imperative norm which can not be diverted from its scope of application even by the reference to s. 3 (1) of the CLA.

III.2 The Concept of a Party in Proceedings about the Recruitment of an Alien from Abroad

As a first step, an employer intending to hire an alien is obliged to obtain a permit for the recruitment of employees from abroad. This administrative act is issued by the local Labour Office after the usual administrative procedure. The Employment Act defined the employer as the only party involved in this procedure. However, we should consider that a negative decision taken by the Labour Office prohibits the alien the way towards obtaining two of three permits, which are generally requested for his/her employment (employment and residence permit). It is caused by the close connection between proceedings, the proceeding about the permit for recruitment of an alien from abroad and the proceeding about the employment permit, which lies in the same subject of both proceedings. The decision of the Labour Office concerning an issue or a refusal of the permit for recruiting an alien from abroad prevents the administrative body to adopt a different stance in the next litigation which is about the same question. This rule is expressed in s. 2 (4) of the Administrative Code.

The fact that there are two proceedings in the Czech Republic dealing with the same thing let arise a large number of procedural problems like the scope of application, the estoppel “res judicata” in these proceedings (see chapter IV.). Nevertheless, the alien’s performance of work without his/her employer would have obtained a permit for the recruitment of an alien does not form an offence under the Employment Act.

Another proof of the connection between the proceeding dealing with the permit for recruitment an alien from abroad and a legal position of a particular alien is the way how exceptions therefrom are constructed. They are linked either to the alien’s occupation or to the character of the working place which should be occupied. For details see footnote No. 11.

To sum up, an alien intending to be employed by an employer in the Czech Republic is a person for whom it is important what decision is made in the proceeding for the recruitment of an alien from abroad, even though the permission or the refusal of a permit issue is not directed, in a proper sense, against him/her. Although the Employment Act does not list an alien as a party of this proceeding, the Czech Administrative Code whose provision shall be used as a subsidiary means, knows a concept of so called “interested party” [in Czech “dotčená osoba”]. An interested party is, firstly, every person who compulsory shares his/her rights or duties with an applicant or, secondly, everyone whose legal situation can be directly affected by the ruling.

According to the Czech legal theory, the relation between an employer who is going to hire an alien and this alien is not close enough to be called a mandatory partnership in the meaning of the previous sentence. The duty to obtain a permit for the recruitment of an alien lies solely upon an employer.

Therefore, let’s concentrate on the second category. A decisive criterion hereto is the degree of an alien’s legal interest in the result of an administrative proceeding. Of course, this varies from case to case. However, due to the conception of two separate proceedings dealing with the same test of labour market, (as has been already stated above), an alien must be attracted to strengthen the position of his/her future employer (e.g. present his/her special traits or knowledge concerning some relevant facts).

If the Labour Office assessed an alien’s participation in the proceeding as unsubstantiated, it is obliged to give an official decision on the admissibility of alien’s presence. An alien may appeal against it although the appeal has no suspensory effect on the continuation in the proceeding without the alien. Provided the appeal were satisfied and owing to the fact of his/her exclusion from the proceeding an alien missed the opportunity to undertake some action meanwhile, which he/she would have otherwise done, an alien is entitled by law to commit such an action within the time limit of 15 days from the day when he/she gets to know the decision of the appeal’s body.

III.3 The Concept of Employment

The performance of employment [in Czech “zaměstnání”] is subject to the requirements of obtaining the permits described above. The legal definition of employment stated in the Employment Act encompasses three distinct types of working in the Czech territory -“regular employment” (1), fulfilment of ordinary tasks (2) and the seconding of employees (3).

Ad 1) As well as in foreign regulations, e.g. German or Austrian, the need for a permission relates primarily to the performance of the so called “dependent employment”. Its conception has been defined by several court decisions and is now laid down in the new Labour Code (the statute No. 262/2006 Coll.) using these words: “the work performed by an employee in the relation of superiority to an employer when an employee works personally, respecting the employer’s instructions, in the employer’s name, for emolument, in working hours or in another stipulated day-time, at work place or somewhere else agreed, at the employer’s expense and responsibility.

Ad 2) Under s. 89 the Act on Employment legitimated by the intention to face an enormous violation of law[18], that by law the term “employment” is deemed to include the fulfilment of ordinary tasks procured by a partner, statutory body or a member of a corporate body or a member of a company (and other offices - see Section). The term “ordinary tasks” is legally defined in s. 13 (2) of the Employment Act for the purpose of the ban of illegal work. However, s. 89 itself refers to the application of this provision. The tasks resulting from a business’s object of a person or a corporation which are strictly linked to the maintenance and administration of production or services and similarly an activity according to special regulations are named under the term in question. These tasks must be carried out in employer’s name, at his/her responsibility and on the premises determined for the exertion of such an activity or at the places usually used for their performance.[19]

Courts lay great stress on the scope of a business’s object which is often recorded in some type of public register. Only in the case of a farther connection between the registered object and the examined activity it is upon an employer to decide how he will administer performance of such activity.[20]

Ad 3) The employment permit is also required if the foreign national is to work in the Czech Republic for a foreign employer having assigned the foreign national to work in the Czech Republic under a commercial or another agreement concluded with a Czech legal or natural person.

Other forms of economic activity performed in the Czech territory than the above-mentioned ones, e.g. charity actions, work on base of diverse commercial contracts etc., are not regulated by the Employment Act, but it does not mean that they are prohibited.

IV. Is the Employment Permit granted ipso facto?

Pursuant to s. 92 of the Employment Act, an alien satisfying requirements laid down in this statute “may” be granted an employment permit. However, the conception of two proceedings dealing with the so called test of labour market let arise a legitimate question in how far the issue of the permit for the recruitment of an alien is binding for the same Labour Office which is going to rule on the issue of an employment permit, after the permit has reached the status of res judicata.

Some impulse for our contemplation is the lack of a similar provision in the Employment Act as it is set up in s. 51 (2) of the Immigration Act. There it is explicitly stipulated that there is no claim for an alien to request a residence permit what have been supported by the judgment of the Supreme Court from 16^th October 2002, 2 As 29/2003, published in Sbírce rozhodnutí Nejvyššího správního soudu, 2004, issue No. 5, p. 522. This issue has not been decided by court yet, as well.

The Employment Act of 1991 defined in its s. 1 that every citizen of the Czech Republic has the right to be employed. This is guaranteed by the state. The (valid) Employment Act marks every natural person as an entitled subject, though it is not only a citizen, who fulfils three requirements - he/she is able and willing to work and seeks the job truly. The scale thereof is restricted by the condition to obtain an employment permit. Nevertheless, this regulation shapes a requirement which cannot deny the right in itself. In addition it can overlap with the above-mentioned s. 2 (4) of the Administrative Code. Provided the Labour Office approved a shortage of a needed alien within the test of labour market in the proceeding about permit for the recruitment of an alien and the situation has not changed meanwhile there is no reason to refuse the issuance of an employment permit.

V. Conclusion

This article deals with several problems arising from the fact that foreign nationals who are not European Union nationals or members of their families do not have the right of abode and an unrestricted right to work in the Czech Republic and are therefore not free to live and work here without immigration clearance.

The basic statute regulating the access to Czech labour market is the Act No. 435/2004 Coll., on Employment. The conditions for the living of foreign nationals are set out in the Act No. 326/1999 Coll., on the Residence of Foreign Nationals in the Czech Republic. Foreign nationals (and persons without a citizenship) may be employed in the Czech Republic, provided their future employer has been granted the “Permit for Recruitment of Employees from Abroad” and consequently they themselves have obtained an employment permit and a residence permit.

The first elaborated issue is the requirement laid down by s. 3 of the Act on Employment. Pursuant to this provision, the alien can become an employee only if he possesses the legal competence to enter into a contract of employment. However, the question of capability is not resolved by the act on its own. The act merely refers using a foot-note to s. 15 of the Czech Labour Code. Owing to decisions of the Czech Constitutional Court, footnotes are not part of a generally binding legal act, but have only explanatory function. Therefore we ask, keeping in mind that the alien is a foreign element in legal relations, whether the alien’s home law, to which the Czech Conflict law is referring, should not be applied instead of the Czech Labour Code. Nevertheless, since the Czech norms in question are binding, and implement the prohibition of child work, we come to the conclusion that an application of foreign law which would be contrary to the Czech conception of alien’s capability is excluded.

In the procedure for the acquisition of a "Permit for Recruitment of employees from abroad" as well as in the procedure concerning the employment permit, the essence is the solution of the same factual question. Still the Labour Office approaches it from two different starting points. In the first case, the Labour Office has to find out whether the employer actually has a free working place which cannot be filled by an applicant from the country in which the vacancy appears. In the second case the Labour Office investigates whether the alien actually does apply for a job that cannot be filled otherwise due to the required qualification or insufficiency of free labour force. The author of this article believes that apart from a higher income from fees (an administrative fee is imposed on every single procedure), only the possibility to impose different rules on different categories of labour or aliens in the case of an acquisition of a labour permit or in the case of an acquisition of the "Permit for Recruitment of Employees from Abroad," can be regarded as an argument for the maintenance of this regulation. On the other hand, the Czech labour market or different schemes of its protection could certainly be carried out only within the range of a graded obligation to gain a labour permit. Even within the current legal regulation, there’s no kind of work that could be exerted only on the base of the “Permit for Recruitment of an Alien from Abroad”. Even in such cases the alien has to acquire a labour permit.

Last but not least, we should ask a controversial question - has the alien fulfilling all the regulated requirements the right to obtain the employment permit or not?

The legal regulations for the employment of an alien form a dynamically developing range of legal rules, the importance of which has been constantly growing throughout the last years. But does the headlong development of this functional range of legal rules correspond to the changes in the society and economy of the Czech Republic?