Key amendments to local employment law
Amendments to fixed term employment contracts
On March 13, 2014, the European Court of Justice (ECJ) determined that Polish regulations on fixed-term employment contracts are inconsistent with EU law. This may herald major amendments to Polish law in the near term. The market expects severe restrictions on the use of fixed-term contracts and additional formalities for employers wishing to terminate them early.
Essence of the problem
The government is considering amendments to labor law to make fixed term contracts equal in certain aspects with indefinite term contracts, so that employees doing the same work are not discriminated against. Current regulations provide significantly weaker protection for employees on fixed term contracts, even if their work is performed on the same conditions as employees on indefinite term contracts.
Scale of the problem
Fixed-term contracts account for approximately 27 percent of all employment contracts in the Polish market, making Poland the EU leader in terms of the total number of fixed-term employment contracts. Amendments will certainly bring about some privileges for employees and, in consequence, new additional obligations for employers.
The amendments may concern the following issues:
- Making the length of the notice period dependent on the length of employment or term of the employment contract, with the proviso that notice periods applicable to fixed-term contracts may be made equal to those applicable to indefinite term contracts, or a completely new notice period may be introduced. Currently, for an employment contract valid for more than six months, the notice period is two weeks, if the possibility of termination was stipulated in the contract; while for an indefinite term employment contract, the notice period is two weeks, one month or three months depending on the length of employment.
- An obligation to consult termination of a fixed-term contract with trade unions.
- An obligation to give cause for terminating a fixed-term contract.
- An obligation to specify the purpose of entering into a fixed-term contract.
- Statutory limitation of the maximum total duration of fixed term employment contracts to approximately two-to-three years.
Although amendments to the current regulations are still at a very early review stage, employers already face related threats. Using the judgment of the ECJ, employees in disputes with employers may already rely on the inconsistency of Polish law with EU law when bringing claims. Therefore, some labor law experts argue that in certain situations employers should already, among other things, apply in fixed-term contracts the notice periods applicable to indefinite term contracts.