Amendment Proposal vs Proposal for Annulment of the Act that Prohibits Sales on Public Holidays in the Czech Republic

By Martin Spicka, Martina Kopcova,

11-2018

The main aim of the Act No. 223/2016 Coll., on Retail and Wholesale Opening Hours, as amended ("Act on Opening Hours" or "Act") that came into effect on 1 October 2016 is to regulate retail and wholesale opening hours so as to prescribe a general prohibition on sales on certain (but not all) public holidays and to restrict sales on Christmas Eve in the Czech Republic. However, the restriction, or prohibition respectively, of opening hours does not apply to shops the sale space of which does not exceed 200 m2, petrol stations with fuels and lubricants, pharmacies, shops in places of increased concentration of passengers at airports, railway stations and bus stations, shops in health care facilities and retailers and wholesalers at times when the state of danger, state of emergency or state of war is declared.

At present, there are two contradictory proposals in the Chamber of Deputies of the Czech Republic, one of which (submitted on 12 June 2018) seeks to amend the Act so as to exclude wholesalers from the scope of the existing legislation ("Amendment"), while the second one (submitted on 12 September 2018) seeks to repeal the Act ("Proposal for Annulment").

Background of the legislation

The Act on Opening Hours has prompted controversial reactions right from the outset of its legislative process. The reason for adopting the Act on Opening Hours was (i) to regulate an area of relations that had not yet been regulated by legislation, and, at the same time (ii) to take into account the values of the European Union which place particular emphasis on the reconciliation of work and family life. Employees working on public holidays cannot fully devote themselves to their families because they work at the time when their children are free. During holidays, families should be together and devoted to, among other things, family affairs.

In the course of discussing the Act, the government pointed out some of its points of contention, such as a proposal to exempt shops the sales space of which would not exceed 200 m2 from the scope of the Act. In the government's view, this exclusion creates unequal conditions between undertakings and thus, is contrary to the freedom of establishment within the meaning of Article 49 TFEU. At the same time, the government pointed out that it was not clear pursuant to which criteria the particular holidays were selected for the sales prohibition, nor was there a comprehensive impact assessment of the Act, particularly in relation to a possible reduction of employees' wages. Despite the criticism mentioned above, the Act was adopted.

Uncertain legal terms

Due to the fact that the term "sales space" is not explicitly defined by Czech legislation, the Czech Trade Inspection Authority uses, for the purposes of its control activities, the definition contained in Annex I of the Commission Regulation (EC) No. 250/2009 of 11 March 2009 implementing Regulation (EC) No 295/2008 of the European Parliament and of the Council, in which the term sales space is defined as "the estimated surface area (in m2) of that part of the premises of the enterprise devoted to selling and display, i.e.:

  • the total space to which customers have access, including fitting rooms;
  • counter space and window space;
  • the space behind counters used by shop assistants.

Sales space does not include offices, storage and preparation rooms, workshops, staircases, cloakrooms and other amenity rooms."

The prohibition on opening hours indirectly affected internet shops as well, as the interpretation of the term "sale" was understood as to include not only ordering of goods by a customer but also their handover. Therefore, the restriction of opening hours ought to affect the shops (or more precisely the physical premises where the goods are handed over to the customer) of internet shops the sales space of which exceeds 200 m2.

Constitutional complaint

On 14 December 2016, a group of senators filed a constitutional complaint, in which the senators demanded commencing proceedings for annulment of the Act. Their arguments, as expressed in the constitutional complaint, were that the Act is inconsistent with the equality of people in their rights, with the right to privacy and the principle of autonomy of will, with the right of freedom of undertakings, with the right to acquire livelihood through own means and with the principle of minimizing interference with fundamental rights. The constitutional complaint has not yet been decided.

Amendment proposal

The Amendment seeks to exempt wholesalers from the scope of the Act, the reason being that wholesalers constitute an intermediary link between production and retailers, as they buy goods from the manufacturer and sell them to retailers. By including wholesalers in the scope of the Act, a risk arises to supplying retailers with fresh-food or perishable products, which in turn cause problems to gastronomic establishments that are open but cannot purchase fresh goods from wholesalers as well as to establishments with continuous services (health institutions, hotels, hostels, accommodation facilities, social institutions, orphanages).

Proposal for Annulment of the Act

The Act was threatened by a proposal for annulment already in 2017, but that proposal was rejected. The current proposal for annulment of the Act uses, like the previous one, arguments such as a non-systemic intervention by the legislator in human lives which consists in setting a prohibition on selling only in selected shops, randomness of selecting only certain public holidays, and creating inequalities between different groups of undertakings and employees without a rational reason. The government commented on the proposal for annulment of the Act, stating that it is appropriate to await the Constitutional Court's decision.

 

Authors

Kopcova_Martina_WEB

Martina Kopcová

Associate
Czech Republic & Slovakia

Call me on: +420 226 030 500

Martin Špička

Counsel, Prague
Czech Republic & Slovakia

Call me on: +420 226 030 500