Important and/or distinctive aspects of rights on termination in Poland.
Contractual post-termination restrictions
The provisions governing post-termination restrictions are contained in the Polish Labour Code. A full understanding of all legal aspects and enforceability of these restrictions requires knowledge of the most important judgments of the Polish Supreme Court.
The most important and distinctive aspects of post-termination restrictions in Poland are:
- They can only be signed by an employee who has access to particularly important/sensitive information, the disclosure of which could expose the employer to damage. However, in practice, the employer is free to decide which information is important or sensitive. It cannot be publicly known information.
- They must be in written form.
- They must be for a specific period of time. The length of the restrictions should reflect the level of importance of the confidential information known by the employee.
- The employer is obliged to pay financial compensation.
- The Labour Code requires that the restrictions should be a “separate agreement”. It is recommended to sign a separate non-compete contract for the post-termination period. It is also acceptable to include a separate clause in the employment agreement or to sign it as an attachment to the employment contract.
- Restrictive covenants are usually enforced by contractual penalties. A high potential penalty is usually sufficient to force a former employee to comply with the covenant. A contractual penalty clause should include a provision entitling the employer to claim additional damages if the penalty payable by the former employee does not cover the whole damage caused by misconduct. From a practical point of view, it is much easier to prove only the fact that there has been a breach in the restrictive covenants (as is the case in a claim for a contractually agreed penalty) than to prove a breach and its cause and the consequential damage suffered (as is the case in a claim for actual damage suffered).
Statutory protection against unfair competition of ex-employees
In addition to any contractual provisions, the Polish Suppression of Unfair Competition Act 1993 provides several provisions securing the rights of the former employer including sanctions for solicitation. Unfair competition includes inducing someone working for an entrepreneur not to perform an employee’s duties or other contractual obligations in order to obtain a benefit either for himself or for a third party or to the detriment of the entrepreneur.
Another example of unfair competition is to induce customers of an entrepreneur or other persons to dissolve a contract with them or not to perform the contract in order to obtain a benefit either for himself or for a third party or to the detriment of the entrepreneur.
A former employee must keep the affairs of his ex-employer confidential for three years after expiry of the employment contract. If the employer wishes to keep certain information confidential for a longer period, this should be included in a restrictive covenants agreement.