Notices of alteration
Collective redundancies under the labour law
Applying collective redundancy procedure to notices of alteration
In its ruling of May 17 2007 (Case III BP 5/07) the Supreme Court stated that the collective redundancy procedure also applies in cases where the employer has issued an appropriate number of notices of alteration of terms of employment. However, not all commentators agree with the court's reasoning.
A Polish notice of alteration of terms of employment is constructed differently from those issued under the labour laws of many other European countries. In Poland, such notice is directly opposite in its construction to a definitive notice of termination. A notice of alteration of terms of employment is composed of two declarations of will:
- a notice of alteration of the existing terms of work and pay; and
- a proposal of new terms.
However, there is no declaration of termination of the employment contract.
A notice of alteration of terms of employment may result in a termination of the employment contract, but only in cases where the employee expressly refuses to accept the new terms. If the employee has not refused to accept the new terms by the halfway point of the notice period, it is assumed that he or she has accepted them.
Pursuant to the Labour Code, the provisions on a definitive notice of termination also accordingly apply to a notice of alteration of terms of employment. However, the respective application of provisions on termination does not mean application of all provisions on termination; the specific nature of the notice of alteration of terms of employment must be taken into account
Collective redundancies under the labour law
The implementation of collective redundancies is regulated by the act of March 13 2003 on the special rules for terminating employment relationships for reasons not related to the employees. The act's provisions implement the EU Collective Redundancies Directive (98/59/EC).
The act is applied in cases where it is necessary to terminate employment relationships for reasons that are not related to the employees. In other words, it is applied only in cases of a necessity to terminate the employment relationships.
Thus, a question arises as to the legitimacy of applying the act and, consequently, of conducting the redundancy procedure provided therein in cases where the employer intends merely to change the employees' terms of employment (ie, in cases where the need to make redundancies does not arise).
Applying collective redundancy procedure to notices of alteration
The Supreme Court ruling which ordered the application of the collective redundancy procedure to notices of alteration of terms of employment was justified by the adjudicating panel by way of a pertinent application of the provisions on a definitive notice of termination. However, it may be argued that this justification is inaccurate.
This is because the court failed to take into account the fact that the provisions on termination should be applied accordingly and the specific nature of the issuance of the notice of alteration of terms of employment must be taken into account. It is precisely the specific nature of the notice of alteration of terms of employment that the Supreme Court did not take into account.
In cases of the issuance of notices of alteration of terms of employment there is no necessity to terminate the employment contracts. However, such necessity is an indispensable prerequisite for applying the Act on Collective Redundancies. The purpose of issuing notices of alteration of terms of employment is to avoid redundancies and continue the employment on altered terms.
Of course, in practice, it may occur that an employer will attempt to circumvent the procedure for collective redundancies by offering employees worse employment terms in order to force the employees not to accept them and consequently to terminate the contracts. However, in that situation, employee protection is served by different legal constructions.
The interpretation presented here is compliant with the EU Collective Redundancies Directive. The directive states that collective redundancies cover redundancies and other forms of employment contract expiry on the employer's initiative. The Supreme Court mistakenly accepted that in the case of a notice of alteration of terms of employment, as constructed under Polish law, the employer initiates a termination of the employment relationship. However, in such a situation the employer initiates only a change to the terms of employment; the initiative to terminate the employment relationship is taken by the employee if he or she decides not to work under the changed terms and submits a representation on refusal to accept them. Pursuant to Polish law, an employee's employment contract is terminated only where he or she takes steps in the form of a refusal to accept new terms of employment. In the absence of a reaction on the employee's part, the contract will continue on the changed terms.
Thus, it is hoped that the interpretation adopted by the Supreme Court will be corrected in the future.
For further information on this topic please contact Sławomir Paruch at Soltysiński Kawecki & Szlęzak by telephone (+48 22 608 7000), fax (+48 22 608 7070) or email ([email protected]).