A major change in Polish labor law is imminent. In essence, Parliament is seeking to eliminate some differences in protection enjoyed by employees on indefinite term contracts and those working on fixed term contracts.
The impetus to create the new law arose after the European Commission pursued a legal action against Poland for failing to comply properly with its obligations under EU law—namely due to the inconsistencies of the Polish Labour Code with the provisions of Council Directive 1999/70/EC of 28 June 1999 concerning the framework agreement on fixed-term work concluded by the European Trade Union Conference (ETUC), Union of Industrial and Employers' Confederations of Europe (UNICE) and the European Centre of Employers and Enterprises providing Public Services (CEEP). Another important factor was the jurisprudence of the European Court of Justice (ECJ) and, in particular, the ruling of March 13, 2014 in the case Nierodzik (the question of the District Court in Białystok), C-38/13, in which the ECJ stated that the rules of the Polish Labour Code concerning termination of fixed term employment contracts are as a rule discrepant with Directive 1999/70/EC. The amendment is supposed to take effect at the beginning of 2016.
Currently, employers in Poland prefer fixed term to indefinite term contracts. According to statistics, more than 25 percent of the Polish workforce worked on this basis in 2014. The attractiveness of fixed-term contracts lies in the lack of direct regulation concerning permitted length, the short statutory termination notice period—only two weeks—and the ability to terminate without cause.
This has led to abuses where employees are engaged on fixed term employment contracts lasting up to 10 years with termination notice of only two weeks. In contrast, an employee on an indefinite term contract has a three-month notice period after three years of employment and termination must be amply justified, failing which, the employee may take the employer to court for reinstatement or compensation.
Currently the Labour Code provides for the “third contract rule”, where a third consecutive fixed term employment contract with the same employer automatically transforms into an indefinite term contract. Since there is no time limit for a fixed term contract, some employees wait years before any third contract materializes.
Under new rules an employer will be able to keep staff on fixed term employment contracts for a maximum period of 33 months, during which time it can sign up to three fixed term contracts. A fourth fixed term contract, or overstepping the 33 month mark, will be treated as employment under an indefinite term employment contract.
Notably, notice periods applicable to the fixed term contracts will be longer and will depend on the length of service at the given employer. Employees will therefore enjoy the same notice periods, irrespective of whether they are on fixed term or indefinite term contracts.
Under the new law the notice periods will be:
- Two weeks—for employment lasting less than six months.
- One month—for employment lasting 6-36 months.
- Three months—for employment lasting over 36 months.
Provisions on trial period contracts will be tightened up. New provisions of the labor code explicitly define the aim of employment under this type of contract by indicating that it serves to check the skills and qualifications of the employee and the possibility of employment for a specific type of work. As a rule, the employer will be able to engage an employee for a trial period only once.
The amendment also resolves a controversy by regulating the employer’s right to release a dismissed employee from the obligation to perform work, irrespective of its character, during all or part of the notice period.
This the draft legislation is scheduled to take effect in January 2016 and importantly, it will generally apply to most fixed term employment contracts that will be in force at that time in Poland.