The "carrot and stick" policy of the labour inspection

At the beginning of January, attention typically turns to the set of legislation coming into effect in the new year. Among those are this year's amendments to Act No. 251/2005 Coll., on Labour Inspection, and Act No. 435/2004 Coll., on Employment, which puts under the scrutiny of state authorities especially clandestine employment mediation and other forms of illegal employment.

Clandestine employment mediation is defined as an activity by which an entity circumvents the legal regulation of mediation by employment agencies or, in other words, "disguises" its activity as an employment agency by means of a different legal relationship. In this way, the subject acts in fact as an employment agency, although it is not one and does not have the necessary authorization to do so. Although it is de facto a so-called labour hire, which can only be carried out in the form of an employment agency and on the basis of a permit issued by the Ministry of Labour and Social Affairs, it operates de iure on the basis of a contract for work and services. The subject of the contract is "on paper" only the work or particular service performed by the designated employees. If the legal relationship is declared in such a way, it does not imply an obligation for the "clandestine" agencies to comply with the conditions imposed on existing employment agencies.

According to the 2024 summary report of the State Labour Inspection Office (SLIO), this is one of the most dangerous fields of control with regard to its social impact: "Entities that do not comply with the relevant legislation in this area, do not fulfil their tax obligations in particular, generally do not provide employees with comparable working conditions compared to the user's regular employees, thereby significantly undermining competition and creating unequal market conditions."

In 2024 alone, the SLIO carried out nearly 20,000 inspections with a success rate of more than 60% in terms of finding violations of the law. Specifically, in the area of occupational health and safety in 78%, in the area of labour relations in 66.1% and in illegal employment (hence clandestine mediation) in 42% of inspections. SLIO statistics show that directly clandestine employment mediation was detected in 309 out of 410 inspected entities in 2023.

The current efforts of the SLIO and the Ministry of Labour and Social Affairs are focused on more targeted and effective workplace inspections. Taking into account the current situation and the presence of foreign nationals on the labour market, a large part of the inspections is devoted to combating illegal work and "unmasking" - exposing the practice of clandestine employment. Amendment No. 470/2024 Coll., which places enhanced powers in the hands of the inspection authorities, serves as an effective tool for this purpose.