New legislation on restriction of business hours in the Czech Republic
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Czech Republic – October 2016
New Legislation on restriction of business hours for retail and wholesale trade during specified national holidays
New legislation came into force on 1 October 2016 which prohibits or limits retail and wholesale trade on specified national holidays. The restrictions became enforceable from 28 October 2016.
What are the specified national holidays when retail and wholesale trade is prohibited?
The specified national holidays are Easter Monday, 8 May, 28 September, 28 October, 25 and 26 December and 1 January. There are limited business hours on Christmas Eve.
What businesses will be affected?
Businesses that operate in wholesale or retail trade, whether or not they hold a licence to do so (point 48 of Annex No. 4 to the Trade Licensing Act (Act. No. 455/1991 Coll., as amended).
When will exemptions to these restrictions apply?
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Where a businesses has a sales area of 200 m2 or less(only areas where the goods are located and which are accessible to the public are considered sales areas, storage or shop facilities are not regarded as sales areas);
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Where the type of business is specifically referred to in the legislation (regardless of the size of the sales area). For example, petrol stations, pharmacies, certain shops in busy areas of airports, train stations and bus terminals, shops in healthcare facilities; and
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At times specified by the legislation. For example, where a state of emergency is declared, there is a threat to the security of the state or a state of war is declared in accordance with applicable law.
It should be noted that there are certain businesses that may never be excluded from the legislation, irrespective of their physical size (sales area). These are pawnshops, shops trading in used goods and recycled materials buy-out facilities.
What happens if a business fails to comply?
Compliance is monitored by the Czech Trade Inspection Authority which can impose fines of up to CZK 1 million, or up to CZK 5 million in cases of repeated breaches.
PRK’s opinion
The purpose of the legislation is to improve workers’ rights to spend time with their families during national holiday periods. However, it seems at odds with this that not all national holidays are covered by the legislation. Further, by providing an exception for shops with sales areas not exceeding 200m2 the smaller shops have been given a competitive edge over the larger shops which are prohibited from trading.
By restricting the legislation to retail and wholesale trade, shopping centres have escaped the impact on business hours (as the operators’ business activity is the lease of real estate, apartments and commercial premises, which is not a trade). However, within the shopping centre, the individual retail or wholesale trade shops e.g. clothing, furniture, book stores will need to close. Whereas, individual service shops within the shopping centre e.g. cinemas, cafes, restaurants (which do not constitute retail or wholesale trade) or shops within the exemptions (e.g. pharmacies) may stay open. Therefore, the shopping centres will have the option to decide whether or not to stay open by taking into account factors such as the business viability, brand image and reputation.
Further information
For further information, please contact Tereza Erenyi (tereza.erenyi@prkpartners.com) on +420 221 430 111.
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