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The Warsaw Voice » Law » September 2, 2011
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Termination of Employment Contract Under Polish Law
September 2, 2011   
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The employment relationship may be terminated individually or within the collective redundancy process.

The Act on Specific Conditions for Terminating Employees’ employment for Reasons not attributable to Employees of 13 March 2003 set out the criteria to distinguish between both situations and to provide additional, when compared to the Labor Code, obligations of the employer and rights of the redundant employee.

Employment contracts may be terminated for various reasons concerning the employee or the way he executes his salary obligations, or for reasons independent of the employee.

Termination of an individual employment relationship

The employment relationship may cease as a result of the expiry of the employment contract (e.g. upon the employee’s death or in other defined circumstances) or the termination of the employment contract.

The Labor Code sets out the following methods for terminating an employment contract:
- mutual agreement of the parties
- a statement by one of the parties, observing a notice period—‘termination with notice’
- a statement by one of the parties, without observing a notice period—‘termination without notice’
- the expiry of the period for which it was concluded
- the completion of the task for which it was concluded.
Where an employment contract is terminated by mutual consent, the parties will settle all issues connected with termination between themselves, in particular the termination date and financial conditions of the employee’s departure, though they cannot deprive the employee of the rights provided by legal binding provisions. The employment contract may be terminated by mutual consent at any time, even during the notice period given by one of the parties.

The termination of the employment contract with notice is a common method of termination. The notice period depends on the type of agreement and the employee’s length of service. The employer must justify the termination of the employment contract for an unlimited period. The grounds presented by the employer must be real and precise. The employee may appeal to a court against the dismissal and claim its illegal character and unreal, imprecise or intangible character. The employee does not have to justify the termination of the contract with notice.

Employment contracts may be terminated without notice (a) due to the fault of the employee, e.g. where the employee substantially fails to perform his basic duties, or where the employee, through his own fault, loses the qualifications required to perform the work, and (b) in certain cases defined by the Labor Code, where the employee is not at fault, e.g. due to a long-term absence caused by the illness of the employee or when the employer is at fault.

It should be emphasized that an employee whose employment contract is terminated, with or without notice, has the right of appeal to the Labor Court. If the court determines that the termination of the agreement was unjustified or unlawful, then the employee may claim either re-instatement at work or compensation.

Collective dismissals

The rules for making collective dismissals are outlined in the Act on Specific Conditions for Terminating Employees’ Employment for Reasons not Attributable to Employees of 13 March 2003, which applies to employers employing at least 20 employees.

A collective dismissal takes place where, within a period of 30 days and for reasons not attributable to the employees, the employment relationship is terminated with at least:
- 10 employees, where the employer employs fewer than 100 employees
- 10 percent of employees, where the employer employs between 100 and 300 employees
- 30 employees, where the employer employs 300 or more employees.

An employer making collective dismissals must follow the procedure provided by the act, part of which involves negotiations with trade unions, or consultations with employee representatives where trade unions are not present in the workplace. The aim of these is to define rules for making redundancies.

On the termination of the employment relationship as part of a collective dismissal, employees are entitled to a severance pay of one, two or three months’ gross remuneration, depending on their length of service with the employer. The guaranteed minimum severance pay is the lower of the severance pay by length of service, as set out above, and 15 times the minimum wage. Employers may not pay less than the guaranteed minimum, but can pay more at their discretion.

The same severance pay is due to an employee made redundant for reasons not attributable to the employee dismissed individually.

Monika Sojda-Gerwatowska
legal advisor at Gide Loyrette Nouel law firm

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Fringe benefits, a driving force of development: employee share ownership, employee incentives Gide Loyrette Nouel, Mazars and Gras Savoye discussion panel at 21st Krynica Economic Forum • September 7, 2011
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