Statutory Body v Employee

It is a common practice in the Czech Republic that the statutory body or member of the statutory body (executive in a limited liability company and board member in a joint stock company)¹ is at the same time employed as a director. However, since 1992 the Supreme Court (SC) has steadily decided that this arrangement is not permissible, as the employment cannot overlap with the performance of the position of the statutory body, which must be performed in a commercial law relationship.

The main difference compared to employment is that the liability of the statutory body is stricter, with no limitations and no employment protection (eg, statutory vacation, notice period, severance payment, etc.). Further, statutory bodies are partly subject to different tax, social security and health insurance (SSHI) treatment.²