Employment Termination / Dismissal / Collective Redundancy in Poland

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Michał Dudkowiak
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Termination of employment / Poland – key facts

Employment relationship / labour contract under Polish law may be ended:

  1. by mutual agreement of the parties
  2. by termination with notice period (regular termination)
  3. by termination without notice period (disciplinary termination)
  4. upon expiration of the duration period

Termination of employment – summary table

Modes of employment termination
  • By mutual agreement
  • Regular termination with notice
  • Disciplinary termination without notice
  • upon expiry of employment period
Notice periods
  • 2 weeks notice – seniority of less than 6 months
  • 1 month notice – seniority of more than 6 months
  • 3 months notice – seniority of more than 3 years
Severance pay
  • 1-month salary – seniority of less than 2 years
  • 2-months salary – seniority of 2 – 8 years
  • 3-months salary – seniority of more than 8 years
Reasons for termination
  • Must be provided for termination without notice or termination of permanent (unfixed) contact
  • The reasons may be attributable to the employee or not attributable to the employee
  • The reason must be real and specific, so the employee can easily understand it
Right to challenge the termination
  • Available within judicial review process
Remedies against termination
  • Compensation of maximum 3 months salary, or
  • Reinstatement to work
State authorities approval required
  • Not required
Trade unions approval required
  • Required only dismiss with notice a permanent employee who is a trade union member, or whose rights and interests the trade union has agreed to protect
Collective dismissal procedure
  • Collective dismissal procedure applies when termination level within the period of 30 days exceeds:
    • 10 employees (employers below 100 employees)
    • 10 percent (employer: 100 – 300 employees)
    • 30 employees (employer above 300 employees)

Termination by mutual agreement

The parties to the employment relationship are free to decide on the terms and conditions of termination of employment contract irrespective of its type. Mutual termination agreement shall be concluded in writing (with wet signatures). The agreement made in oral form will not be considered null and void but may be problematic to prove in case of court dispute.

Mutual termination of employment in Poland is permissible also during periods of special protection against termination. The protection rules work only against unilateral termination with notice. In consequence, there are no restrictions as to concluding mutual termination agreement e.g. during holiday, pregnancy, maternity, in pre-retirement age etc.

When concluding mutual termination of employment contract parties usually decide on:

Mutual termination of employment contact in Poland

  • whether the employment relationship will expire immediately upon execution or after certain period of time (future date)
  • whether the employee will be obliged to work or will be released from work during last days / weeks of work
  • using outstanding holiday leave or payment of equivalent for unpaid leave
  • payment of bonuses and other benefits
  • other payments incl. compensations and employee severance pay
  • obligation of confidentiality and non-compete.

In practice mutual termination agreement is often offered by the employers as an alternative for termination with or without notice. Employers tend to offer additional benefits to convince the employee to select an amicable form of ending of an employment in order to eliminate risk of potential dispute.

Termination with the notice period (regular termination)

Employment contracts may be terminated by each party (employer and employee) in regular mode, i.e. with the notice period. What is specific for Polish law, is that every employment contact incl. a fixed term contract (definite period contract) may be terminated subject to the statutory notice periods. Therefore, even if an employee has a 12 months fixed term contract it can be terminated with implied, statutory notice periods.

Characteristic feature of regular termination is that the contract expires with lapse of the statutory period of notice.

Termination letter

Employment agreement termination letter shall conform with certain criteria which are listed below:

Legal form
  • Termination letter shall be made in writing (hard copy with wet signature), or
  • electronic form signed with qualified electronic signature).
Delivery
  • As a rule the termination letter shall be delivered to the other party in person
  • Exceptionally, the termination letter may be delivered in another form: registered address, email.
Justification
  • Certain notices of termination shall include real, specific and understandable justification (this relates in particular to termination indefinite employment contract or disciplinary termination of any type of contact)
Instruction notice
  • Notice of employment agreement termination shall include information about the employee’s right to appeal against the termination to a competent labor court.

Consultation of termination with trade unions

In case employees protected by a trade union organization and termination occurs for reasons other than the employer’s bankruptcy or liquidation, an employer must inform the union of its intention to terminate a contract concluded for an indefinite period.

Notice periods

Employment agreement termination notice periods in Poland are defined by the Labor Code, and shall not be charged by contractual stipulations of the parties (save the exceptions provided below). Notice period applicable to particular employee depends on his/her seniority (total employment period at certain employer) and amounts to:

2 weeks notice period
  • for employees with seniority of less than 6 months (with given employer)
1 month notice period
  • for employees with seniority of more than 6 months (with given employer)
3 months notice period
  • for employees with seniority of more than 3 years (with given employer)

Probation employment contracts (trial period contract) may be terminated with shorter notice periods:

  • 3 working days – when the trial period is no longer than 2 weeks,
  • 1 week – when the trial period is longer than 2 weeks
  • 2 weeks – when the trial period is of 3 months

How to count termination notice periods?

Notice period given in months – start to run on 1st day of the month following the day of termination and shall end on the last day of the calendar month, after the laps of the notice period

Example: If the termination letter is delivered on Wednesday July 13th 2022, 3-months termination period will start to run on August 1st 2022 and end on October 31st 2022

Notice period given in weeks – shall end on Saturday after the laps of the termination period.

Example: If the termination letter is handled on Wednesday July 13th 2022, 2-weeks termination period will end on Saturday July 30th

Work / holiday during notice period

During the termination notice period employer may order the employee:

  • to use the outstanding holiday leave in order to avoid paying of a cash equivalent,
  • release the employee from the obligation of work.

The above may be instructed by the employer at its own discretion, no consent of the employee is required.

Extension and shortening of the notice periods in employment contracts

As a rule, length of a notice period may not be shortened below the statutory minimum. The period of notice may only be extended contractual by the parties for the benefit of the employee.

Job search leave

In the case of employment termination by the employer, the employee is entitled to a paid leave for the purpose of looking for a job. The scope of job-seeker leave depends on the length of the notice period and amounts to:

  • 2 working days of leave – in case of 2 weeks or 1 month notice period
  • 3 working day of leave – in case of 3 months notice period

Redundancy pay / severance payment

Severance (redundancy pay) in Poland may be due to the employee if:

  • the employee is dismissed under the group redundancy procedure (collective dismissals), or
  • dismissal is individual but made exclusively for reasons other than the employee’s conduct and performance, provided the employer employs at least 20 employees.

Severance pay

Severance of 1-month salary
  • for employees with seniority of less than 2 years (with given employer)
Severance of 2-months salary
  • for employees with seniority of 2 – 8 years (with given employer)
Severance of 3-months salary
  • for employees with seniority of more than 8 years (with given employer)

Maximum severance payment

Severance amount in Poland is limited with a 15 x statutory minimum salary (minimum remuneration).

Collective dismissal (collective redundancy procedure)

Collective dismissal procedure applies when termination level within the period of 30 days exceeds:

  • 10 employees, if the employer employs less than 100 employees,
  • 10 percent of employees, when the employer employs 100 – 300 employees,
  • 30 employees, if the employer employs at least 300.

Collective dismissal procedure involves inter alia:

  • obligation to pay severance to employees,
  • consult intention of termination with company trade unions or employee representatives, and
  • report of intention to terminate contracts to the local Labour Office.

Disciplinary termination

Disciplinary termination may only take place if there is a valid reason, i.e. when the employee:

  • seriously violates the basic duties,
  • commits an offense during employment, which makes further employment impossible in his / her post, if the offense is obvious or has been established by a final and valid court judgment,
  • loses his/ her license required to perform his/her duties connected with a post.

Under Polish employment law (Labour Code), there is no legal definition of “valid” or “justifiable” reason. In case of dispute the reason will be evaluated by the labour court. Nonetheless the reasons must be specific, understandable for the employee and real (not of a general nature).

Characteristic feature of disciplinary termination is that the labor contract expires immediately, i.e. without any period of notice.

Disciplinary termination letter

Disciplinary termination letter shall conform with certain criteria which are listed below:

Time limit
  • Disciplinary termination cannot not take place after 1 month from the date when an employer learned the reasons justifying termination of the contract
Justification

(valid reason)

  • Disciplinary termination has to be justified by severe reasons (e.g.. serious violation of basic duties)
  • labour law requires that the justification is real, specific and understandable
Legal form
  • Termination letter shall be made in writing (hard copy with wet signature), or
  • electronic form signed with qualified electronic signature).
Delivery
  • As a rule the termination letter shall be delivered to the other party in person
  • Exceptionally, the termination letter may be delivered in another form: registered address, email.
Instruction notice
  • Notice of employment termination shall include information about the employee’s right to appeal against the termination to a competent labor court.

Disciplinary termination / severance pay and holiday equivalent

Disciplinary termination does not trigger an obligation to pay severance to the employee. On the other hand, due to the fact that disciplinary termination has immediate effect with regards to contract expiration, it usually triggers an obligation to pay equivalent for unused holiday (i.e. if the at the day of termination the employee has accrued unused holiday, s/he will not be able to used it in nature prior to contract expiry, in consequence – an equivalent shall be paid). As a result, in case of disciplinary termination, the holiday leave is not forfeited but it converts into monetary claim (equivalent for unused holiday).

Immediate termination due to absence or incapacity to work

The labor contract may be terminated by the employer with immediate effect due to employee’s incapacity or absence from work if:

  • the illness lasts longer than 3 months (if the employee has seniority less than 6 months); or
  • the illness lasts longer than the joint period of receiving sick pay from the employer, statutory sickness benefit and rehabilitation benefit for the first 3 months:
    • if the employee has seniority of at least 6 months; and/or
    • if he/she becomes unfit to work through an accident at work or occupational disease.
  • absence is justified by other reasons than those provided above and it lasts longer than 1 month.

Immediate termination by the employee (without notice)

Under Polish law the employee is also allowed to terminate the employment agreement in disciplinary mode, i.e. with immediate effect, if an employer has substantially neglected its obligations (e.g. neglected his duty to pay remuneration). In such a case, an employee is entitled to compensation equal to the remuneration for the period of notice and in case of a fixed term contract – for the period till the end of the contract, but no longer than the length of the notice period.

Employee’s declaration on termination of the contract shall be made in writing and shall indicate the reason of termination. Termination may not take place after 1 month from the date on which an employee learned the reasons justifying termination of the contract.

An employee may also terminate the employment contract without notice, if the medical certificate is issued and it confirms the harmful effect of the work on the health of the employee, and the employer fails to transfer an employee to another position (appropriate for the employee’s health and professional qualifications) within the period specified in the certificate.

In case an employer finds termination of the contract unjustified, he may seek compensation. The compensation shall be adjudicated by the labor court and due in the amount equal to the remuneration of an employee for the period of notice, and if a labor contract has been made for fixed term, for the period till which the contract has been concluded, but no longer than the length of the notice period.

Employee’s right to challenge termination of a labor contract

Legal grounds for challenging termination

Each termination may be challenged in the court of law if it was:

  • unlawful (e.g. made without providing any reason or made without providing mandatory, written instruction on the right to appeal against the termination, etc.), or
  • unjustified (e.g. made with unjustified reason or made for other reasons than stated in the termination letter, etc.)

In case of the dispute before the labor court, the burden of proof that the termination was lawful and justified is entirely on the defendant – employer.

Deadline to appeal against termination of employment relationship

An appeal against termination shall be submitted to the labour court within 21 days from the date of placing the termination letter.

Remedies against termination of employee’s employment contract

Polish labour law provides two types of remedies (claims) against termination that may be pursued by the employee before the court of law:

  • compensation, or
  • reinstatement to work.

The choice of the remedy is entirely to an employee, nonetheless the decision as to whether the employee will be reinstated or awarded compensation is at the discretion of the labour court.

Compensation
  • Compensation amount depends on the type of the contract and mode of termination
  • In any case the compensation cannot be higher than the amount of 3 months’ salary
Reinstatement to work

(order to return to work)

  • Available to employees on indefinite period contact
  • Not available if reinstatement is impossible or pointless
  • If the court orders reinstatement to work, the employer will be obliged to hire the employee in the same position and on the same terms and conditions as prior to the termination.
  • If reinstatement to work is awarded the employee will be additionally entitled to compensation for lost remuneration for the period of unemployment but not more than:
    • 1 – 2 months – regular employees,
    • whole period – employees under special protection against termination.

Trade unions involvement

Trade Unions involvement in termination of labor relationships in Poland

If an employee employed under a contract for an indefinite period is a trade union member (or is a person whose rights the trade union has agreed to protect) and is dismissed for reasons other than an employer’s bankruptcy or liquidation or is to be dismissed without the notice period, an employer must inform the company trade union in writing about the intention of terminating the employment agreement with this employee and the grounds of the termination.

If a company trade union decides that dismissal shall be considered as unjustified, it may present an employer with substantiated objections, in writing, within 5 days of receiving the information above (3 days in the case of termination of employment contact without notice).

An employer shall make a decision, having considered the opinion of the company trade union or in the absence of such an opinion received in due time. However, an employer does not need the consent of the trade union and is entitled to launch the termination against the trade union’s opinion.

Special protection against termination of employment contact

Under Polish labour code all employees are protected against termination during leaves and employee’s justified absence. In addition to that, certain categories of employees are protected against termination if they meet certain criteria (e.g. pregnancy, pre-retirement age etc.). Regular termination placed against an employee who is protected will be null and void. However, it shall be clarified that protection rules do not work against disciplinary termination for severe breach of key duties.

Following categories of employees are protected against termination:

Employees protected against termination in Poland

  • employee in pre-retirement protection period, i.e. 4 years prior to reaching retirement age
  • female employee during pregnancy or maternity leave (this principle shall not apply to an employee during her trial period not longer than 1 month) nor to the male employee during his paternity leave,
  • member of the company’s trade union organizations and trade union officer or an other persons designated by the trade union as being protected against termination; trade union officers and other persons appointed by the trade unions as protected against termination are protected during the term specified in the resolution of the management of the respective trade union organization and after the expiry of this term, for a maximum period of one year.

Any employees cannot be terminated during any leave, including holiday leave, as well as during any justified absence from work.

FAQ – termination of employment contract in Poland

What is the notice period in Poland?

Notice periods in Poland are regulated in the Labour Code and shall not be shortened by the employments contracts. Notice periods amount to: 2 weeks – for employees of less than 6 months seniority; 1 month – for employees of more than 6 months seniority; and 3 months – for employees of seniority greater than 3 years

What are the three types of termination of employment?

Employment contact may be dissolved in Poland by mutual agreement, or unilateral termination. Unilateral termination may be regular or disciplinary.

How do I resign from employment in Poland?

There is no resignation option in labour law in Poland, the employment contact must be terminated in one of the modes (mutual agreement, disciplinary or regular termination with notice period)

How does notice period work in Poland?

Notice period most usually start to run at the end of the month and not form the day when the termination was placed (unless it was placed in the last day of the month). 2 weeks notice period  runs little bit differently – it shall end on Saturday after the laps of the termination period.

What is a collective redundancy?

Collective redundancy requires application of special procedure and payment of severance pay.

Is severance pay taxable in Poland?

The severance pay is subject to income tax in Poland, but is exempt from social security contributions (ZUS).

Can you terminate an employee in Poland for poor performance?

Yes – you can terminate employment for underperformance – that shall be considered as valid reason for regular termination (with notice period) 

Can I terminate the employee in Poland during holiday?

No, employees are protected against termination during justified absence and holiday. However this rules does not relate to disciplinary termination.

What with unused holiday after termination of employment contact?

Holiday leave many and shall be used during notice period. If it is not used in full the employee shall be entitled for equivalent for unused holiday.

Is remuneration or holiday equivalent forfeitured in case of disciplinary termination?

No, disciplinary termination does not forfeiture right to remuneration and holiday equivalent.

How do I dismiss managing director in Poland?

Dismissal of managing director in Poland depends on how the person is engaged. If under employment contact – labour law termination rules shall apply. If under civil law contact – individual agreement shall apply. If under corporate resolution – corporate regulations shall apply.

Expert team leader DKP Legal Michał Dudkowiak
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Write an inquiry: [email protected]
check full info of team member: Michał Dudkowiak
Expert team leader DKP Legal Alicja Myśluk-Landowska
Contact our expert
Write an inquiry: [email protected]
check full info of team member: Michał Dudkowiak