Pursuant to Article 30 § 4 of the Labour Code, when terminating a contract of employment concluded for an indefinite term, the employer is required to provide in the termination notice the grounds for termination of the employment relationship. The grounds for termination must be specific and true, they should provide precise indication of the circumstances justifying termination of the employment relationship. In the event of a dispute before the court the identification of adequate grounds for termination of a contract concluded for an indefinite term is often decisive for the outcome of the case.

The guidance as to the expediency of termination is offered by the Supreme Court case-law, among others by the resolution of the Supreme Court of 27 June 1985 (III PZP 10/85). According to its most crucial points, the assessment as to whether or not a termination of the employment contract is expedient should take into account the valid interests of the employing establishment and the attributes of the employee inherent in the employment relationship. Other circumstances of the employee, unrelated to the employment relationship, (e.g. involving his or her family, financial situation, health, or age) can in exceptional cases provide the grounds for finding, pursuant to Article 8 of the Labour Code, termination to be contrary to public policy. The Supreme Court has also consistently held that a scheduled reduction of employment at the company (downsizing) can provide legitimate grounds for termination of the employment relationship.If a termination of the employment relationship is for reasons of downsizing, the labour court is not competent to examine if the employer’s decision to reduce employment is expedient and justified (resolution of the Supreme Court sitting as a full court of 27 June 1985 (III PZP 10/85), argument IX and SC judgements of 16 October 1992 (I PRN 40/92) and of 3 November 2010 (I PK 93/10)). It may only check if the reduction of the headcount has actually taken place. The court is entitled to assess the validity of the criteria for selecting the employees to be made redundant, however, the need to make comparisons between different employees arises mainly when one or more from among a larger number of identical positions are being eliminated and the employees to be terminated need to be identified.

If the downsizing results from elimination of a position, it is sufficient for the decision to be at such an advanced stage that no doubt arises as to it actually happening. This has been stated by the Supreme Court in its judgement of 13 October 1999 (I PKN 290/99). The Supreme Court held that an employment contract termination on the grounds of e.g. organisational streamlining, reduction of employment, elimination of a position, etc. does not have to coincide in time with their actual occurrence. The existence of a position on the date of termination notice does not amount to the absence of the actual grounds for termination, providing that within the notice period or a short time afterwards the position is indeed eliminated due to these changes.

Further, according to SC judgements of 16 December 2008 (I PK 86/08) and 8 January 2007 (I PK 187/06), when terminating an employment contract, the employer is required to specify why downsizing justifies making the relevant employee redundant. The employer can list several reasons for termination, none of which individually provides grounds for such decision but which in aggregate warrant the termination. The termination has grounds if at least one of the reasons listed by the employer is justified (SC judgement of 5 October 2005, I PK 61/05).