Švarcsystém – transport dispatcher, head of transport department

The Labour Inspectorate and the Supreme Administrative Court have once again confirmed that the so-called Švarcsystém does not only apply to blue-collar professions, but can also occur in highly skilled positions. In its decision, the cooperation between a dispatcher and a transport department manager, who performed their activities on the basis of commercial contracts, was recognised as illegal work, even though it was in fact an employee-employer relationship. 

In the case in question, the inspectorate found that self-employed persons were being employed in a situation where one employee performed the work of a transport dispatcher for the inspected person on the basis of a contract for the provision of transport services and one employee performed the work of a transport department manager for the inspected person on the basis of a contract of mandate. During the inspection, the inspectorate found that the work activities of both individuals concerned cumulatively fulfilled all the characteristics of dependent work within the meaning of the meaning of Section 2(1) of the Labour Code and assessed the concluded commercial contracts as simulated legal acts whose true purpose was to conceal the actual state of affairs corresponding to the employer-employee relationship. In this case, a fine of CZK 445,000 was imposed. 

According to the administrative discretion of the inspectorate, the decisive aspect in the legal qualification of the case was the degree of integration of both employees into the organisational structure of the "employer". In the case of the employee who performed the work of a transport dispatcher, she cooperated on a completely standard and daily basis with other departments of the employer, whose transport requirements she handled. The employee acting as head of the transport department organised, managed and supervised the work of his subordinates, even though he was not formally an employee himself, as his position was only respected de facto within the company. The above information shows that illegal work in the form of the Švarc system can also be found in positions that require considerable qualifications. 

For example, the Supreme Administrative Court agreed with the regional court that the administrative authorities found several circumstances which, taken together, convincingly indicate the existence of a relationship of subordination and subordination between the complainant and both persons.  It is also essential for the conclusion of dependent work that she performed most of her work on the complainant's premises, where she had an office with standard equipment at her disposal. She also had business cards indicating her job title at the complainant's transport department with an e-mail address with the complainant's domain. According to the Supreme Administrative Court, these facts prove that the person concerned was integrated into the complainant's business, which is another indicator for assessing the actual nature of the contractual relationship. 

The Supreme Administrative Court agrees with the regional court also with regard to the assessment of the nature of the work. The relationship of superiority and subordination was already given by economic dependence on the complainant. For the person concerned, this was the only source of income in the relevant period. However, the person concerned was also integrated into the complainant's organisational structure. The complainant's employees perceived him as their superior. 

Taking into account the other arguments of the Supreme Administrative Court, the company's cassation complaint was dismissed and the fine imposed by the inspection was upheld.