Work Volume Reduction

Definition and legal basis

Work volume reduction is governed by Art. 328, para. 1, item 3 of the Labour Code. It represents a lasting and genuine decrease in the volume of activity — a decline in production, reduction in the number of clients, contraction of services provided, or decrease in turnover.

Unlike staff redundancy, with work volume reduction the staffing table is not changed. The positions are retained, but due to the objectively decreased volume of work, the need to maintain the same number of employees ceases.

When does work volume reduction exist?

Work volume reduction exists when there is:

• Production decline — reduced orders, production volume, capacity
• Reduced turnover — lasting decline in revenue from sales or services
• Loss of clients — significant reduction of the client base
• Cessation or limitation of activities — closing a division, discontinuing a product line
• Seasonal factors — for lasting (not short-term) changes in volume

Distinction from staff redundancy

Correctly distinguishing between the two grounds is essential, as the evidentiary requirements differ:

• Staff redundancy (Art. 328, para. 1, item 2) — elimination of a specific position or reduction of staff positions. Proven by a new staffing table.
• Work volume reduction (Art. 328, para. 1, item 3) — positions are retained, but the volume of work has objectively decreased. Proven by financial and production data.

Citing the wrong legal basis in the dismissal order is an independent ground for declaring the dismissal unlawful. The employer cannot rely on one ground while proving another.

Proving the reduction

The burden of proof falls entirely on the employer. In a court dispute, the employer must prove that the reduction is genuine, lasting, and justified. Courts conduct a thorough review of the evidence presented.

Comparison period

Case law requires the reduction to be established through comparison with the previous year or an analogous prior period. A short-term decrease of 1-2 months is insufficient — the decline must be sustained and significant.

Required evidence

• Financial statements — annual and interim financial statements showing a decline in revenue
• Accounting reports — trial balances, income and expense reports, sales reports
• Production data — production volumes, number of orders, capacity utilisation
• Client contracts — terminated or reduced-volume contracts
• Market analyses — in case of general industry decline
• Witness testimony — from accountants, managers, clients

Principle of proportionality

A key principle in dismissal due to work volume reduction is the proportionality between the degree of reduction and the number of dismissed employees.

Case law categorically holds that with a 40% decline in work volume, the employer cannot dismiss all or most employees. The number of dismissed employees must be proportionate to the reduction. For example:

• With a 40% decline in volume, dismissal of approximately 40% of employees in the relevant position is justified
• Dismissal of 80% of staff with a 30% decline is disproportionate and may be declared unlawful
• Whether the remaining employees can realistically handle the workload must also be considered

Mandatory selection

As with staff redundancy, the employer is obliged to carry out selection under Art. 329 LC among employees performing identical or similar functions. The selection is carried out using the same two criteria — professional qualification and level of work performance.

Preliminary protection

Protection under Art. 333 LC is fully applicable. The employer is obliged to obtain prior authorisation from the Labour Inspectorate for the dismissal of protected categories of employees (pregnant women, mothers with children under 3, reassigned employees, those suffering from certain diseases, trade union members).

Frequently asked questions