Definition of Terms

Definition of Basic Terms

Employment
Employment is a form of thedependent relationship of an employee on an employer, where the employee pursues activity according to employer’s instructions at the time and in the place determined for that purpose by the employer for the remuneration agreed upon in advance.

Domestic employer
Domestic employer means a legal or natural entity that employs people in employment relationships. To that effect, it is irrelevant whether the employer is, for example, a Czech firm, a Czech firmwith a foreign equity, or a foreign employer’s branch.

A precondition of the pursuit of such activity is the entry into the Commercial Register or into other register laid down by law, into the relevant list or the keepingof that entity in specified records maintained by a relevant authority of the Czech Republic. The entry into the Commercial Register of a foreign legal or natural entity that does business in the Czech Republic is required.

The obligation of entry into the Commercial Register does not apply to a natural entity who is a national of a Member State of the European Union (hereinafter the “EU”) or of another State that constitutes the European Economic Area (hereinafter the “EEA”) or of the Swiss Confederation, or who is a family member of such a person, with the right to reside in the Czech Republic. Furthermore, the obligation of entry into the Commercial Register does not apply to a natural entity who is a national of a third country who has obtained a long-term resident status in a Member State of the EU and to his or her family member who has obtained a long-term residence permit in the Czech Republic. Likewise, the obligation of entry into the Commercial Register does not apply to those who acquire the right to do business under a trade licence.

A labour agency that employs foreigners for temporary assignments to work with the user is also regarded as an employer.

Domestic employer also means a natural entity that does not do business but, for the entity’s personal needs, the entity employs another natural entity.

Foreign employer
Pursuant to employment regulations, foreign employermeans a legal or natural entity with its registered office outside the territory of the Czech Republic,with no permanent business presence in the Czech Republic, where such entity posts its employees to the Czech Republic to implement a commercial or other contract entered into with a domestic legal or natural entity. The posted employees are in an employment relationship with this foreign employer and, after they complete the job for which they have been posted by that employer to the Czech Republic, they return to the employer’s registered office. Compliance with the requirements associated with the posting of employees is the responsibility of the legal or natural entity to which the foreigner will be posted by the foreign employer.

Foreigner
Under the Employment Act, foreigner means a natural entity who is neither a national of the Czech Republic, a citizen of the EU/EEA and Switzerland, nor a family member of such a person. Foreigner also means a person without nationality.

Foreigners permanently residing in the territory of the Czech Republic have the same legal status,in terms of employment, as citizens of the Czech Republic, i.e. they are not limited in choosing a job except for certain occupations where the legislation applicable to the territory of the Czech Republic requires the pursuit of such occupations by nationals. The same applies to foreigners who enjoy subsidiaryortemporaryprotectionunder specific law, as well as to other foreigners mentioned in Section 98 and 98a of the Employment Act.

Territorial jurisdiction of a regional office of the Public Employment Service
The locally competent authority that decides on a foreigner’s Employment Permit is the regional office of the Public Employment Service of the Czech Republic (hereinafter the “regional office of the Public Employment Service”)within the territorial jurisdiction of which the person will be employed.