Logo L&E Global
Poland | Sobczyk & Partners

07. Termination of Employment Contracts

Employment Law Overview Poland
Cross-Border Remote Work FAQs Poland
Employees vs Independent Contractors Poland
Opening a Business in Poland
Poland

07. Termination of Employment Contracts

Grounds for Termination

An employment contract can be terminated only in one of the ways listed in the Labour Code. This means that both the parties to a collective labour agreement and the parties to the contract cannot establish other grounds for terminating the employment contract. They cannot combine or modify individual grounds, either. The employment contract is therefore terminated:

  • under a settlement agreement between the parties thereto;
  • by a unilateral statement of either party to the employment agreement while preserving the notice period (termination on a notice);
  • by a unilateral statement of either party to the employment agreement without keeping the notice period (termination without notice);
  • upon the end of the term for which the employment agreement was concluded.

As follows from the provisions of the Labour Code, settlement agreements and terminating the employment relation with or without notice pertain to all three types of employment contracts.

The Labour Code specifies the reasons that are considered to be acceptable in order to terminate an employment contract without notice. Each party is obliged to provide cause for terminating the employment contract without notice. In the case of giving notice to an employment contract, the Labour Code only indicates that the employer’s statement of giving notice to a fixed-term or  unlimited time employment contract should include a reason justifying the notice. Both terminating an employment contract without notice and giving notice thereto should be made in writing.

Collective Dismissals

Collective dismissals are those, which are made in the event where the employer who employs at least 20 employees needs to terminate multiple employment relations where the employees are not at fault. The collective dismissal must take place within 30 days and pertain to at least: a) 10 employees when the employer employs less than 100 employees; b) 10% of employees when the employer employs at least 100 employees, however not more than 300 employees; or c) 30 employees when the employer employs 300 or more employees.

The employer is obligated to consult with the company’s trade organisations or with employee representatives prior to a collective dismissal. The consultations lead to concluding a settlement agreement defining the principles of actions in the matters concerning employees under the intended collective dismissal.

Individual Dismissals

Terminating an employment contract with notice is a unilateral statement of will made by one party to the other party, in an employment relationship. An employment contract will terminate on the day that the period of notice expires. The employer’s statement of giving notice to an employment contract concluded for an unlimited time or fixed-term employment contract should include a reason justifying the notice.

Terminating an employment contract without notice is a unilateral statement of will made by one party to the employment relations to the other party which causes an immediate termination of the employment relation. The Labour Code lists three reasons for immediate termination due to employee misconduct (this list is exhaustive). The employer does not have to exercise the option should he decide that the employee’s faulty behaviour makes it possible to continue employing such an employee. The reasons are: 1) gross violation of the employee’s basic employee duties; 2) the employee’s committing of a crime during the employment relation which makes it impossible to continue the employment relation; 3) the employee, through his/her fault, has lost his/her authorisations which are necessary for him/her to perform the work at a given position. Additionally, the employer can terminate an employment contract with an employee effective immediately, where the employee is not at fault, in the case of a prolonged unexcused absence of the employee at work.

Is Severance Pay Required?

In connection with terminating employment relations within a collective dismissal and individual dismissals for reasons which do not concern the employee (if the employer employs at least 20 employees), the employee is entitled to a severance payment.

The amount of the severance payment may not, however, exceed the amount of 15 times of a minimum remuneration for work as set forth in the provisions of the Act on minimum wage (i.e. the maximum amount of severance is approx. 12.000 EUR gross). This limit may, however, be exceeded by agreement of the parties.

There are also special categories of employees whose dismissal requires the employer to pay  a specified amount of severance payment.

Such employees are government agency representatives, teachers and persons who perform home-based work, among others. The right to severance payments can also result from normative agreements.

However, these regulations cannot be less advantageous for the employee than general sources of labour law. The Labour Code also provides for severance payment to an employee in connection with his/her retirement or disability, and the payment of a death benefit.

Separation Agreements

A separation agreement is not a concept recognised either in practice or by the labour laws of Poland.

Remedies for Employee Seeking to Challenge Wrongful Termination

An employee seeking to challenge wrongful termination can file an appeal with a labour court. Most types of employment notices can be appealed against and the appeal should be filed with a competent labour court within 21 days from the delivery of the employment notice. In such a case, the employee can demand a ruling on the ineffectiveness of the termination of employment, or to be reinstated at work on previous terms, or a payment of damages.

The labour court may reject the employee’s demand to declare the notice of termination ineffective, or to reinstate the employee in a job, if it determines that the demand is impossible or pointless; in such a case the labour court awards compensation.

In the event of terminating an employment contract, effective immediately and in violation of  law, the employee is entitled to file a claim for damages or to be reinstated at work. The claim should be filed with a labour court within 21 days from the receipt of the notification on terminating the employment contract without notice, or from the day of expiration of the employment contract.

Ineffective Termination of Employment Relation: It is permissible under Polish law to terminate an employment contract by way of a unilateral statement of will, due to an ineffective contract; a court proceeding is therefore required in order for the court to rule on the ineffectiveness of such a statement or whether the employee should be reinstated at work. Under the Labour Code, only the employee is allowed to appeal against a defective employment notice. If the employee fails to appeal against the received statement, the statement has the effect of terminating the employment contract (even if it is defective).

Whistleblower Laws

Work on the Act on Transparency in Public Life, which includes regulations on protection of whistle-blowers, is currently in progress.

Any questions

Ask our member firm Sobczyk & Partners in Poland