CZECH REPUBLIC Law and Practice Contributed by: Petr Janů, Vladislav Klimeš and Leoš Vavřík, BADOKH
and acquisitions in the following situations: agree - ments, practices and decisions restricting competi - tion, abuse of a dominant position and anti-compet - itive behaviour. The purchaser may be obliged to notify the Czech Antitrust Office of certain mergers and acquisitions that meet certain thresholds. The Czech Antitrust Office reviews these transactions to determine wheth - er they would significantly impede competition in the Czech market. For transactions that meet the criteria set out in the EU Merger Regulation (EUMR), the European Commis - sion is responsible for reviewing mergers and acquisi - tions that affect competition within the EU, including the Czech Republic. Transactions falling under the EUMR may bypass national competition authorities such as the Czech Antitrust Office. It is important for companies involved in business com - binations in the Czech Republic to carefully assess the applicability of the antitrust rules and ensure com - pliance with merger control requirements. Failure to comply with antitrust requirements may result in sig - nificant fines or penalties, as well as potential chal - lenges to the settlement of the transaction. 2.5 Labour Law Regulations In general, acquirers ought to take note of the fact that Czech labour law is relatively strict on employ - ers. Employees enjoy fairly strong rights and benefits. The most important labour law regulations that should draw the attention of acquirers include the following. • Transfer of Employees – acquirers are to ensure a smooth transition for employees by facilitating the automatic transfer of their employment contracts to the acquiring entity, preserving their existing rights, benefits and seniority. This may involve amending contracts and informing employees of any changes resulting from the transfer. • Informing the Trade Union – before the effective date of the transfer of rights and obligations aris - ing from the employment relationship to another employer, the parties are obliged to inform the trade union and the works council at least 30 days
before the transfer of rights and obligations to another employer, and to discuss with them, with a view to reaching an agreement, the fixed or pro - posed date of the transfer, the reason for the trans - fer, the legal, economic and social consequences of the transfer for the employees and the measures envisaged in relation to the employees. • Non-Discrimination and Equal Treatment – acquir - ers must comply with the laws on non-discrim - ination and equal treatment in the workplace to prevent any discriminatory practices based on protected characteristics such as gender, age, dis - ability or ethnicity. 2.6 National Security Review In the case of foreign investments that may jeopardise national security or internal or public order (eg, arms and military equipment or critical infrastructure), the Ministry of Industry and Trade may initiate (ex officio) proceedings to review the particular foreign invest - ment. In response to the war in Ukraine, the EU has been tak - ing additional measures to restrict Russian investment in its member states, including the Czech Republic. These measures include a ban on financing Russian state-owned companies, restrictions on financial transactions with Russian banks and the Central Bank of Russia, and a ban on the re-listing of shares of Rus - sian state-owned companies on EU stock exchanges. These measures reflect the specificities of the Russian economic and financial sector and aim at restricting financial flows and investments from Russia to the EU. 3. Recent Legal Developments 3.1 Significant Court Decisions or Legal Developments Pinpointing the most significant court decisions or legal developments related to M&A in the Czech Republic over the past three years will vary depending on specific perspectives and industry sectors. Gen - erally speaking, public M&A deals are very rare, and the majority of deals are private. Accordingly, the dis - putes arising from takeovers are infrequently subject to public scrutiny before courts. However, there is one
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