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The case of concurrence is a repeatedly discussed topic not only among experts. This is a situation, when a member of a statutory body also enters into a labour contract with the company, according to which he performs the work of a high-ranking executive, for example general manager, sales manager etc. The original case-law (for example 3 Ads 119/2010 – 58) banned such concurrence, using the argument that the activities of a high-ranking executive and a member of a statutory body overlap to some extent and it is not possible to enter into two contracts for the same type of activity; until a commercial code amendment from the year 2011. The amendment has enabled the statutory body to entrust the performance of business management to a third party or to one of its members, and the entrusted member could be an employee of the company at the same time. The act on business corporations, which replaced the commercial code in the year 2014, did not take over the respective stipulation, though. The absence of explicit legal regulation has thus again created open space for discussion. For this reason, the ministry of justice issued an interpretation in July 2014, stating that the concurrence of posts, the activities of which overlap, is not admissible from January 1, 2014. The conclusions of subsequent judicial decisions continued to differ, however. At the end of this September, the Constitutional Court issued a finding with reference no. I. ÚS 190/15, which stirred up the discussions again. Although it is dealing with a case according to legal regulation valid until the year 2013, the arguments of the Constitutional Court are applicable according to the current legal regulation as well.
The Constitutional Court dealt with a dispute between a former chairperson of the board of directors of a joint-stock company, who was appointed to the post of general manager at the same time, based on a managerial/ labour contract, and the joint-stock company. The object of dispute was the right to employee wages for the notice period after dismissal from the post of member of the statutory body. The company used the argument of invalidity of the labour contract. The court of first instance as well as the court of appeal upheld the action of the employee and granted him a right to the wages. The Supreme Court subsequently cancelled both decisions, stating that the labour contract is invalid, because the scope of activities of a general manager and a member of the statutory body overlapped. This view thus reflected the attitude of most previous decisions of the Supreme Court.
In its new finding, the Constitutional Court challenges the arguments of the Supreme Court, based on which the conclusion of invalidity of the labour contract was made. First, it pointed out the principle of private law, according to which everyone can do what is not banned by law and no one must be forced to do what the law does not require, as well as the fact that because concurrence was never explicitly banned by laws, ordinary courts should have convincing arguments available for deciding on invalidity of labour contracts.
The Constitutional Court emphasised that a ban on < -em data-mce-fragment="1">“so-called concurrence of the post of a member of a statutory body and a labour relation has never been explicitly established by Czech laws and this ban was only additionally formed by the case-law of ordinary courts. If ordinary courts want to infer a ban on private action, which is not explicitly established by laws, they must present very convincing arguments for such a conclusion.” Such arguments have never been presented, according to the opinion of the Constitutional Court. The ban stated by the Supreme Court on a member of a statutory body performing an activity based on a concurrent labour contract is, according to the Supreme Court, based on two reasons:
The Constitutional Court subjected both reasons to examination. When re-examining the argument of the Supreme Court, according to which only dependent work, which the performance of a post of a statutory body is not, can be subject to the system of the labour code, the Constitutional Court inferred that from the perspective of the labour law, there is no reason why, based on free will of the parties, other legal relations could not be subject to the labour code system as well and why a member of the statutory body could not perform his activity or its part based on a labour contract. In what system a contract will be made should be assessed according to the will of the contracting parties. The Constitutional Court does not agree with the argumentation of the Supreme Court in the sense that the labour code cannot cause invalidity of legal action, which it does not itself have impact on. The Constitutional Court further considers the general reference of the Supreme Court to the nature of business corporations completely insufficient and demands proper justification including specific convincing arguments.
The Constitutional Court thus does not see the concurrence of a post of a statutory body member and a high-ranking executive as quite admissible, but considers the arguments of the Supreme Court insufficient. This opens space for a due justification as to if and why concurrence between labour contracts should not occur. It will certainly be interesting to follow further development of judicial acts from this area, and especially to watch how ordinary courts of justice will take this finding over into their practice.
