An extract from The Employment Law Review, 11th Edition

Discontinuing employment

i Dismissal

There are three general methods by which employment agreements may be terminated in accordance with the Labour Code: by mutual agreement, with notice and without notice.

Each type of employment agreement may be terminated at any time by mutual consent of the employee and the employer. In general, these terminations are not subject to the requirement to specify the cause for the termination or to consult with a trade union regarding the termination.

Statutory notice periods are the same for the employee and the employer. Payments in lieu of notice are not allowed (except in certain specific instances, when the notice period may be shortened). It is admissible to release an employee unilaterally from the obligation to perform work with the right to remuneration retained, but only during the notice period.

Termination of an employment agreement for an unspecified period with notice from the employer requires just cause, which is defined by the courts as a reason that is true, real, specific and important enough to discontinue the employment relationship.

The reasons for termination may occur because of the employee (e.g., underperformance) or the employer (e.g., liquidation or restructuring). The employer has no duty to specify a reason when terminating fixed-term agreements.

If there is a trade union operating at the place of work, an employer must seek the trade union's opinion regarding the intention to terminate an employment agreement for an unspecified period for an employee represented by that union. Regardless of the trade union's opinion, however, the employer is free to make the final decision to terminate the employment agreement.

The employee who has been dismissed has the right to appeal to a labour court. If the labour court finds the appeal well grounded it may, in principle, reinstate the employee in his or her former job (which also involves payment of some compensation) or award the employee damages in an amount not exceeding three months' remuneration for that employee.

Polish labour law provides for the special protection of employment for a variety of groups of employees. In practice, the most important of them are trade union activists, employees in their pre-retirement period, pregnant women, employees on parental or childcare leave, and employees on sick leave.

In cases of termination of employment for reasons not relating to the employee, an employer employing at least 20 employees is obliged to pay statutory severance pay on the same terms and conditions as in a collective redundancy (see below).

The Labour Code allows employers to terminate employment agreements immediately without notice in specifically defined situations, such as a serious violation of basic employee duties.

Apart from social security registration issues, individual dismissals are not subject to notification to any government authorities. In respect of individual dismissals, there are no rehire rights. Obligatory offers of suitable alternative employment are only applicable to selected groups of employees. Social plans are not required.

ii Redundancies

Polish law provides for specific rules applicable to termination of employment for reasons not concerning employees, in particular collective redundancies. The provisions of Polish labour law regarding collective redundancy apply if an employer of at least 20 employees intends to terminate – for reasons not attributable to employees – within a period of 30 consecutive days, employment relationships with:

  1. at least 10 employees, if it has fewer than 100 employees;
  2. at least 10 per cent of employees, if it has at least 100 but fewer than 300 employees; or
  3. at least 30 employees, if it has at least 300 employees.

If the above limits are not met, redundancies should take the form of individual dismissals.

In the course of collective redundancies, trade unions should be notified in writing of the contemplated dismissals. Further, a company is obliged to consult unions regarding any intended collective redundancies. The consultation should be carried out with a view to reaching an agreement. The agreement should be concluded within 20 days and should set out the rules of handling the matters concerning the employees to be laid off (including severance and outplacement packages). If no agreement has been reached, the company should issue a regulation dealing with the matters that were to be regulated in the agreement (the collective redundancies regulation).

If no trade unions operate within an employer's business, the information should be delivered to, and the consultations should be carried out with, employee representatives elected for this purpose.

A contemplated redundancy is subject to an information and consultation procedure with works councils. The relevant regulations do not impose any formal requirements for this procedure.

A company is also obliged to provide two notifications to the local employment office on any contemplated collective dismissal measures. The first is to be made simultaneously with the notification to trade unions or employee representatives. The second notification should be made after the consultation process has been completed.

If a company intends to terminate employment relationships with at least 50 employees within a period of three months, it is obliged to agree with the local employment office on the scope and forms of assistance (outplacement) to employees who are to be made redundant.

In addition, in the case of collective redundancies, the termination of employment needs to be effected individually with respect to each employee – either a notice must be provided or a termination agreement signed with the employee. Payments in lieu of notice are required if the notice is served and the employer shortens the notice period (applicable in cases where the employee is entitled to a three-month notice period, which may be shortened to no less than one month). In the case of signing a termination agreement, payments in lieu of notice are allowed (understood as the amount equal to the salary an employee does not earn because of agreeing an immediate or a short-term employment expiry date). The employer is obliged to provide statutory severance pay to all employees affected by collective redundancies. The amount of statutory severance is fixed in relation to a given employee's aggregate employment record with the employer and ranges from one to three months' remuneration for the employee. The maximum amount of the severance pay is capped – in 2020, the cap is 39,000 zlotys gross.

Although it is not required under the provisions of the law, employers often grant additional compensation to employees whose employment is terminated. The categories of protected employees are slightly narrower than in the case of individual dismissals. In respect of collective redundancies, there are certain limited rehire rights. Obligatory offers of suitable alternative employment are only applicable to selected groups of employees.