By: Petr Berdych
October 29, 2025 6 min read
The Employment Act (“EA”) allows only persons with the relevant employment agency permit to provide employment.[1]
Employment mediation includes, among other things, the employment of individuals for the purpose of performing work for users. The user is a third party who assigns the work to the employee and supervises its performance.
Disguised mediation is the activity of a person (“provider”) consisting in the leasing[2] of labour to other persons without complying with the conditions for mediation of employment pursuant to Section 14(1)(b) of the AA (in particular without a permit).[3]
It is irrelevant whether the provider has an employment contract with the workforce provided, what matters is only the actual fulfilment of the characteristics of disguised employment mediation (“the provider’s workforce”).[4]
Even the provision of skilled services (not just purely ancillary services) does not exclude the possibility of disguised job placement.[5]
Legal entities can be fined up to CZK 10 million for disguised employment mediation, or even a ban on activity for up to 2 years.[6]
These sanctions apply to both contracting parties, i.e.:
According to the case law of the SAC[7], the characteristics of leasing labour are:
The Supreme Administrative Court (“SAC”) found that even quite common forms of cooperation, including framework cooperation agreements[8] or contracts for work[9], were disguised as employment mediation.
The decisive factor is not whether all the facts at first glance correspond to the hiring of labor, but what the actual nature of the activity provided is in the overall context of the matter.[10]
Disguised employment mediation poses a significant risk to both the entity that mediates the performance of the work and to the entity where the work is performed, and which therefore facilitates the mediation.
The decisive factor in assessing concealed employment mediation is the actual nature of the activity, not the formal designation of the contract. The designation of the contract between the user and the provider as a “works contract,” “framework contract” etc. does not exclude the risks of disguised employment.
We recommend extra caution if your current or future cooperation meets any of the characteristics of leasing labour.
Do you have any doubts about whether your cooperation with third parties could also be a form of disguised employment? Contact our experts.
[1] Section 14(3)(b) of Act No. 435/2004 Coll., on Employment, as amended.
[2] Thus, mediated employment is not, among other things, a temporary assignment pursuant to Section 43 of Act No. 262/2006 Coll., the Labour Code, as amended. Temporary assignment can only be provided at the expense of the assigning employer for the employee’s salary and travel expenses.
[3] Section 5(g) of the EA
[4] Judgment of the Supreme Administrative Court, Case No. 1 Ads 240/2023, dated 5 March 2024
[5] Judgment of the Supreme Administrative Court, Case No. 4 Ads 173/2014, of 30 June 2015
[6] Section 140(1)(f) of the EA
[7] Among others, the judgment of the SAC, Case No. 4 Ads 173/2014, of 30 June 2015; the judgment of the SAC, Case No. 1 Ads 240/2023, of 5 March 2024
[8] Judgment of the Supreme Administrative Court, Case No. 10 Ads 114/2025, dated 13 August 2025
[9] Judgment of the Supreme Administrative Court, Case No. 7 Ads 244/2024, dated 27 August 2025; Judgment of the Supreme Administrative Court, Case No. 1 Ads 240/2023, dated 5 March 2024
[10] Point 17 of the judgment of the Supreme Administrative Court, file no. 7 Ads 244/2024, dated 27 August 2025.
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