The Employment Law Review: Poland

Introduction

Polish employment law is primarily regulated by the Labour Code of 26 June 1974, which has been substantially amended. There are also numerous laws and regulations that address employment law.

Polish law states that certain internal acts issued by a particular employer constitute sources of labour law. This includes collective bargaining agreements and other collective arrangements, regulations and policies. The provisions of these internal policies may not be less favourable to employees than the provisions of the Labour Code or other statutory laws.

Labour courts are included in the framework of the common courts in Poland, constituting specialised divisions of those courts.

The State Labour Inspectorate (SLI) is the competent authority to enforce employment law. The primary tasks of the SLI include: supervision and inspection of compliance with labour law; taking legal action in cases relating to the establishment of labour relations (reclassification); and prosecuting infringements of employees' rights and other infringements relating to the performance of work and the legality of employment.

Year in review

i Regulations concerning covid-19

Legislative work during the past few months has been focused mainly on covid-19. Poland launched its Anti-Crisis Shield legislation, the aim of which was to support employers, maintain employment, and mitigate the negative effects of the covid-19 pandemic. The Anti-Crisis Shield has been amended several times and it is still subject to further changes. For the duration of the state of epidemic emergency and the state of epidemic, its provisions have regulated in particular:

  1. the special possibility of reducing working time if an employer's turnover drops by at least 15 per cent;
  2. subsidising the remuneration of employees;
  3. relaxation of the rules for establishing a system of or the distribution of working time and daily and weekly rest periods for certain employers;
  4. an exemption from the obligation to pay social security contributions for certain employees for a maximum of three months;
  5. during the state of epidemic emergency or the state of epidemic, granting overdue vacation leave of up to 30 days that does not require the employee's consent and is granted regardless of the vacation leave schedule;
  6. limit severance pay, compensation or other cash benefits payable by the employer to the employee on termination of an employment agreement to 10 times the minimum wage;
  7. the right to terminate non-compete agreements after the termination of employment with seven days' notice;
  8. the possibility to suspend the obligation to allocate funds to or operate the Company Social Benefits Fund, make basic contributions, and effect payments from the Company Social Benefits Fund; and
  9. the suspension or extension of the validity of periodic medical check-ups.

The Anti-Crisis Shield regulates remote working during the pandemic and allows employees to work remotely during a period of quarantine and isolation (under certain conditions). Other anti-covid-19 ad hoc regulations oblige the employer to provide:

  1. a distance of 1.5 metres between workstations, unless it is impossible because of the nature of the performed tasks (social distancing at the workplace) and the employer provides personal protection equipment that is suitable for fighting an epidemic; and
  2. personal protective measures, such as disposable gloves and hand sanitisers.

ii Amendment to Labour Code

An amendment concerning an employer's material liability for offences against employee rights entered into force on 1 December 2020. It relates to employees:

  1. against whom the enforcement of maintenance payments is pending and the enforcement of state budget receivables arising from benefits paid in the event of the ineffectiveness of the enforcement of maintenance payments; and
  2. who are in arrears with the fulfilment of these benefits for a period of more than three months.

The new regulations provide for the imposition of a fine of between 1,500 and 45,000 zlotys on any employer that does not confirm in writing the employment contract concluded with such an employee before allowing the employee to work, or pays such an employee a remuneration higher than that resulting from the concluded employment contract, without making any deductions to satisfy maintenance payments. In light of the new regulations, an employer who undertakes such activities is jointly responsible with the employee for avoiding the payment of maintenance obligations.

iii Amendments to the act on posting employees

Poland has transposed into national legislation Directive (EU) 2018/957 of 28 June 2018 concerning the posting of workers in the framework of the provision of services. Based on the Directive, the Polish act on posting employees was amended. The amendments specified the rules of posting of workers; moreover, the scope of the State Labour Inspectorate's competences has been extended with new powers, including new controls.

Significant cases

By virtue of a resolution adopted by the Supreme Court on 24 September 2020,2 a labour inspector has no right to bring an action on behalf of a citizen that covers a demand to determine the content of the employment relationship or the manner of termination of the employment relationship. According to the Supreme Court, existing law provisions clearly show that the labour inspector has the right to bring an action independently on behalf of citizens only to establish the existence of an employment relationship. In the opinion of the Supreme Court, the word 'existence' is of key importance. It decides that the right of the labour inspector does not include the demand to determine the content of the employment relationship and the manner of its termination. The Supreme Court pointed out that the labour inspector has the right to bring an action on his or her own only in cases 'to establish the existence of an employment relationship', and can only join previously instituted cases with the consent of the employee, while in other categories of labour law cases (and therefore, also for a different determination), the labour inspector may only be the employee's representative.

Basics of entering into an employment relationship

i Employment relationship

An employment relationship is, in principle, established on the basis of an employment agreement. There are additional bases for the establishment of an employment relationship, in particular appointment or nomination, but they are relatively insignificant.

Polish law defines the employment relationship as an obligation of the employee to perform a certain type of work under the supervision of the employer at a location and time defined by the employer for remuneration paid by the employer. Regardless of the type of contract the parties have executed, performance of work according to the aforementioned terms and conditions is always considered employment; in particular, a civil law contract may not be concluded instead of an employment agreement.

The Labour Code defines two major types of employment agreements:

  1. for an unspecified period (open-ended); and
  2. for a specified period (fixed-term).

Open-ended agreements are offered to employees with whom the employer wishes to have a long-term relationship and are strongly preferred by employees.

A fixed-term employment agreement is also commonly used and provides for a specific duration and termination date (upon which it terminates automatically).

Employment agreements should contain provisions on:

  1. conditions of employment and remuneration, such as type of work, place of performance of work and remuneration;
  2. working time (full-time or part-time); and
  3. date of commencement of work.

It is advisable that additional issues be regulated in the agreement, such as intellectual property and confidentiality. A written employment contract must be executed and signed by both parties.

The terms and conditions of employment may be changed by the parties by mutual agreement or by unilateral notice on the alteration of terms and conditions of employment served by the employer. If the employee is not willing to accept the alteration notice, he or she may appeal to the courts or decide to terminate the employment.

ii Probationary periods

Polish law provides for the possibility to execute a separate probationary period agreement, which may precede both open-ended and fixed-term employment agreements. The maximum permissible probationary period is three months. The employer has no obligation to continue the employment after the probationary period has elapsed.

An employment agreement may be terminated by either party with notice before the probationary period expires. The notice period will depend on the duration of the probationary period and ranges from three days to two weeks.

iii Establishing a presence

A foreign company may employ workers without being registered to carry on business in Poland. It may also use temporary workers provided by an agency or engage individual contractors.

Most of the double tax treaties (DTTs) to which Poland is a signatory are based on the Organisation for Economic Co-operation and Development's Model Tax Convention and set forth regulations allowing a contractor to be considered a permanent establishment (PE) of the company. A contractor is considered a PE when it acts on behalf of the company and habitually exercises, in a given country, the authority to conclude contracts in the name of the company. In such cases, the company is deemed to have a PE in that country in respect of any activities of the contractor, unless they are limited to those listed in the DTT that, if exercised through a fixed place of business, would not make the contractor a PE unless it acts merely as an 'independent agent' under the DTT.

The commencement of activity by the foreign company in the form of a PE is treated as the start of business activity in Poland. Therefore, the company would be subject to corporate income tax (in relation to profits derived from activities performed in Poland) and any business activity by the company performed through a PE would be subject to value added tax in Poland. However, in principle, Polish law requires a foreign entrepreneur conducting business activity in Poland to establish either a branch or a representative office in Poland.

A Polish branch or a representative office of a foreign company becoming an employer is obliged to deduct and pay to the tax authorities income tax advances for each employee who is a Polish tax resident. In principle, it is also necessary to deduct social security dues from the gross amount of the employee's remuneration. Anyone who is employed directly by a foreign company is responsible themselves for payment of the income tax advances during the year. In certain instances (in particular when someone is employed by a company based in an EU Member State), deduction of social security dues remains the responsibility of the foreign employer. An EU-based foreign employer and an employee may execute an agreement regarding payment of social security dues on the basis of which the employee undertakes to pay his or her social security dues.

Restrictive covenants

An employer may conclude non-compete agreements with its employees. If the non-compete restriction covers the period of employment, compensation does not have to be provided to an employee.

When a given employee has access to particularly important information, the disclosure of which may expose the employer to damage, the employer may execute a non-compete agreement for the period following termination of employment with that employee (the length of that period being as agreed by the parties, but should be reasonable). A non-compete restriction for a period following termination of employment should include compensation for the employee of at least 25 per cent of his or her previous earnings during the corresponding period immediately preceding the termination of employment.

Wages

i Working time

The basic working time system allows for a maximum of eight hours' work per day and an average of 40 hours per week based on a reference period, which cannot exceed four months, although extensions of up to 12 months are permitted in certain circumstances. Weekly working time (including overtime) cannot exceed an average of 48 hours per week (balanced over the entire period of reference). The minimum daily rest period is 11 hours and the minimum weekly rest period is 35 hours.

According to Polish law, night work encompasses eight hours of work (chosen by the employer) between 9pm and 7am. An employee whose schedule of working time includes at least three hours of night work every day, or if at least a quarter of the working time in the reference period is during night-time, is deemed a night worker. The working time of a night worker may not exceed eight hours if the employee performs particularly dangerous work or work requiring a lot of physical or mental effort.

ii Overtime

For every hour of overtime, an employee is entitled to an additional 50 per cent of the employee's standard remuneration (made up of the permanent components of the employee's remuneration). This is increased to 100 per cent in certain instances, such as if overtime work is performed during night-time, at weekends or on a public holiday that is not a usual working day for the employee. Persons in managerial positions are entitled to overtime benefits to a limited extent.

Following a written request, the employer may grant an employee a release from work for a period corresponding to the duration of overtime worked (instead of the aforementioned overtime compensation). The employer may also grant the employee time off without the employee's request; however, this is at the ratio of 1.5 hours of time off for each hour of overtime worked. The statutory overtime limit is 150 hours in a calendar year. It is possible to increase this within certain limits.

Foreign workers

Employers are not subject to a legal obligation to keep a special register of foreign workers, although, for practical reasons, this information should be easily accessible (e.g., in the event of an SLI inspection). There is no legal limit on the number of foreign workers a company can employ.

A foreign national may perform work in Poland if, inter alia, he or she:

  1. has a work permit and relevant residence title in the territory of Poland (e.g., a visa) or a (joint) residence and work permit;
  2. has been granted refugee status, temporary protection, subsidiary protection, a permanent residence permit, a residence permit on humanitarian grounds, a permit for tolerated stay or a long-term EU residency permit;
  3. is a citizen of (1) an EU Member State, (2) a Member State of the European Economic Area (EEA), (3) a state that is not a member of the EEA, but who may enjoy freedom of movement on the basis of a treaty executed between that state and the European Union and its Member States, or is a family member of a foreigner in one of the categories listed here (subject to additional criteria); or
  4. has a residence permit granted for a specified period to practise a profession requiring high qualifications.

In principle, a work permit may be issued for a period not exceeding three years, although it may be extended. In certain specific situations, a work permit may be issued for five years. Following receipt of a work permit, the foreigner is obliged to apply for an employment visa or a residence permit. Instead of applying for two documents referring separately to work and residence legalisation, an application may be made for a joint residence and work permit. The period for which such a permit may be issued may not exceed three years. The permit may be subsequently renewed.

A foreigner employed in Poland is covered by the minimum requirements of Polish labour law, in particular those relating to working time and overtime payments, minimum remuneration, length of leave entitlement, health and safety at work, non-discrimination and the rights relating to parenthood. The employer is obliged to pay taxes and social security dues for the foreign worker, subject to DTTs and any similar international treaties relating to social security and to the provisions of the pertinent EU regulations.

Global policies

Global policies are enforceable only to the extent to which they are compliant with Polish law and only if they are properly introduced. It is legally required that these policies are in Polish. Depending on the content of a policy, it may be recommended to obtain the employees' consent (familiarisation forms).

Disciplinary procedures are provided for by Polish law and are very formalised in relation to:

  1. types of disciplinary offences (breach of order at work, health and safety regulations, fire prevention regulations or the method of confirming presence at work and excusing absence from work);
  2. procedural requirements (which are very formal and include the right to appeal to court); and
  3. penalties.

All disciplinary procedures should be addressed in the employment regulations (a specific document, as described below) and not in global policies or employment contracts.

In principle, once an employer has 50 employees, it is obliged to introduce internal labour regulations, namely employment regulations and remuneration regulations (unless there is a collective bargaining agreement in force). The employer is also obliged to establish a social fund and issue social fund regulations, unless it has been agreed with the employees' representatives or trade unions that no fund is to be established. The employer is obliged to ensure that every individual employee is acquainted with the regulations and policies. The regulations and policies may be made available to the employees in the manner customary to a given employer, including posting on an intranet site.

The employer is obliged to agree on the employment regulations and remuneration regulations with trade unions active at the employer's business (if any). Furthermore, some specific provisions of the employment regulations and remuneration regulations need to be agreed with the trade unions or the employees' representatives for them to be valid (e.g., an extension of the reference period up to 12 months). In other cases, these regulations are not subject to the consent of employees, unless they result in the terms and conditions of employment being less favourable.

Polish law prohibits discrimination, sexual harassment and corruption. These matters can be more specifically regulated in company policies. Neither global policies nor internal regulations issued by Polish companies have to be filed with or approved by any government authority; however, it is required that a copy of the agreement on the extension of reference periods to 12 months is submitted to a labour inspector and the inspector is notified of specific working-time systems if they are introduced at the employer's business.

Parental leave

Polish law provides for several forms of parental leave: maternity, parental, paternity and childcare.

A female employee is entitled to maternity leave of between 20 and 37 weeks, depending on the number of children born at one birth. After completing her maternity leave, the employee is entitled to 32 weeks of parental leave (or 34 weeks in the case of a multiple birth). A father-employee or other close family member is entitled to a part of the maternity leave or paternal leave under special circumstances.

A male employee raising his child has the right to two weeks of paternity leave, which must be taken before the child reaches the age of 24 months (or up to 24 months from the moment the adoption of a child becomes final), and in any case before the child is seven years old, or if there has been a decision to postpone the child's schooling, before the child is 10 years old.

A maternity allowance is due during maternity leave, leave granted on the terms of maternity leave, parental leave and paternity leave. The allowance during maternity leave amounts to 100 per cent of the average remuneration paid during the full 12 months preceding maternity leave (this is the 'basis' of the remuneration). Maternity allowance for paternity leave and leave on the terms of maternity leave is calculated in the same way. In the case of parental leave, the maternity allowance amounts either to 100 per cent on the aforementioned basis or 60 per cent or 80 per cent thereof, depending on the particular case, as provided by law. All leave taken that relates to parenthood is financed by the state from the Social Insurance Fund.

An employee who has been employed for at least six months is entitled to take childcare leave to provide personal care for a child. The length of childcare leave cannot exceed 36 months and is granted for a period not longer than until the end of a calendar year in which the child reaches the age of six. Childcare leave is unpaid.

Generally, an employer is not entitled to dismiss an employee who is on maternity leave, parental leave, paternity leave or childcare leave. However, Polish law provides exceptions to this rule, for example, in the case of insolvency of the employer.

Translation

Employment documents must have a Polish version if the following conditions are jointly met: the employee is a Polish resident when concluding the employment agreement and the work is to be performed in Poland.

Certified translation or notarisation is not required; however, with respect to agreements, regulations, among others, the Polish versions need to be the official versions in the sense that they are executed (signed). Unofficial translations of documents executed in a foreign language are not sufficient.

A parallel foreign language version is admissible, but the Polish version prevails if the employee is a Polish citizen.

However, as an exception from the foregoing rule, if an employee is not a Polish citizen, has been instructed on his or her right to receive an employment agreement or other employment-related document in Polish and requests that the document is prepared in another language (with which he or she is familiar), then the Polish version is not required.

The Polish language requirement is applicable to all employment documents and in particular to employment contracts, confidentiality agreements, restrictive covenant agreements, proprietary information and assignment agreements, internal regulations, bonus or other incentive compensation plans, employee handbooks or other policies, among others.

Documents without the required Polish versions are, in principle, still enforceable (as long as the employee comprehends the foreign language version), but the person responsible for their implementation is subject to a fine.

Employee representation

The two basic forms of employee representation are works council and trade union, which are governed by different rules. A works council and a trade union organisation may exist at one employer independently from others. In this case, certain issues would need to be separately discussed with the unions and the council (e.g., collective redundancies). Polish law also provides for various ad hoc employee representatives elected for specific purposes in the absence of trade unions.

i Works council

A works council is a body representing the employees of a given employer that has at least 50 employees. The number of employees is established based on the average headcount during the six preceding months. The employer is obliged to inform the works council of:

  1. the activities and economic situation of the employer and contemplated developments in this regard;
  2. the situation, structure and contemplated development of employment, as well as actions aimed at retaining the level of employment; and
  3. actions that are likely to lead to substantial changes in the work organisation or in contractual relations.

Under certain circumstances, the employer may refuse to make some information available to the works council.

The matters specified in points (b) and (c) above should also be subject to consultation with the works council. The council does not have any approval or co-determination rights.

The procedure for information and consultation should be agreed between the works council and the employer. There are no formal rules as to the frequency of works council meetings; however, the employer is bound to inform the works council in the case of any contemplated actions that are statutorily covered by the information procedure, of which the employer has agreed to inform the works council and at the written request of the works council. Any action subject to information or consultation should only be taken following the completion of the process.

The members of a works council are elected by the employees. Should the average headcount reach 50 employees (calculated in a specific way), a group of at least 10 per cent of the employees may ask the employer, in writing, to organise the election of a works council. The election procedure is established by the employer but should be fair and democratic.

The term of office of works council members is four years from the day of the election.

The number of members of a works council depends on the number of employees:

  1. between 50 and 250 employees: three members;
  2. between 251 and 500 employees: five members; and
  3. more than 500 employees: seven members.

There are certain advantages for employees connected who are members of a works council; in particular, an employer is not allowed to unilaterally terminate an employment agreement while an employee is a member of a works council without the council's consent.

ii Trade union

A trade union is established by virtue of a resolution adopted by eligible persons – employees as well as non-employees (the law amendments of 2019 granted non-employees, including civil contractors, the right to establish and to join a trade union). A trade union acquires legal standing upon registration by the court. Usually, the organisers of a company trade union join an existing nationwide union, which allows them to save on time and formalities, and take advantage of the expertise of experienced union activists. Trade unions have powers that are much broader than those of works councils. Generally, as well as the right to be informed and consulted, trade unions have co-determination rights in certain areas.

The fundamental obligations of an employer towards a trade union include:

  1. to agree certain internal regulations with the trade union;
  2. to consult the trade union regarding any collective redundancies;
  3. to inform and, in some cases, to consult the trade union regarding the issues relating to a transfer of undertaking;
  4. to obtain the consent of the trade union to termination of the employment agreement with that trade union's officers (as a primary rule, their exact number is dependent on the number of members of the trade union organisation), or to a change of the terms of their employment;
  5. to obtain the consent of the trade union for termination without notice of employment agreements of employees enjoying special protection (e.g., pregnant employees and employees on maternity leave); and
  6. to consult the trade union before terminating an employment agreement for an unspecified period or changing the terms of employment of employees employed for an unspecified period (no union approval is needed).

In individual matters, a company trade union organisation has the right and obligation to represent individual employees who are members of the organisation or non-members who give their consent to being represented by the organisation. When taking a position regarding the employer in matters concerning collective rights and interests, the company trade union organisation represents all entitled persons regardless of their trade union affiliation.

Data protection

The basic rules concerning processing of personal data are set forth in Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (the General Data Protection Regulation (GDPR)) and in the Act on Personal Data Protection of 10 May 2018, which transposes some provisions of the GDPR to the Polish legal system. There are also specific regulations on processing the personal data of employees and candidates in the Labour Code of 26 June 1974. The Labour Code was amended in 2019 to ensure compliance with the GDPR. Amendments concerned, among other things, the scope of personal data that the employer may gather from a candidate or an employee (for example, an employer may no longer demand from a person seeking to be employed any data concerning his or her parents' names and place of residence).

i Requirements for processing personal data

An employee's consent for an employer to process personal data is not necessary if the personal data is processed in relation to the employment agreement (with regard to personal data as indicated in Article 22¹ of the Labour Code).

The processing of employees' personal data can be based on other legal grounds, such as a necessity for the performance of employment contracts (Article 6.1.b, GDPR), necessity for compliance with a legal obligation to which the employer is subject (Article 6.1.c, GDPR) or legitimate interests of the employer (Article 6.1.f, GDPR), compliance with laws relating to employment and social security that require the processing of sensitive data (Article 9.2.b, GDPR) or the establishment, exercise or defence of legal claims (Article 9.2.f, GDPR). The employer is required to notify employees about the processing of their personal data and to provide them with the information required under Article 13 of the GDPR (relating to, for example, the purposes and legal grounds for the data processing, data recipients and employee rights under the GDPR).

Under the GDPR, employers are obliged to maintain records of data processing activities, to implement appropriate technical and organisational measures to ensure a level of security of personal data appropriate to the risk, and to ensure that an individual who has access to employees' personal data (acting under the authority of the employer) processes it according to instructions from the employer. However, employers are not obliged to register the processing of employees' personal data with the data protection authority (DPA). If the employers' core activities consist of processing operations requiring the regular and systematic monitoring of data subjects on a large scale or of the processing on a large scale of sensitive data or data relating to criminal convictions and offences, employers are obliged to appoint a data protection officer (Article 37, GDPR).

ii Cross-border data transfers

With respect to cross-border transfers of employees' personal data, registration of the transfers with the DPA is not required. However, it is necessary to obtain the DPA's consent for the transfer of personal data if the destination country does not ensure an adequate level of protection of personal data in its territory and if any of the conditions allowing for transfers to such countries, as indicated in the GDPR, is not met (e.g., explicit consent of the data subject, the necessity to perform a contract between the data subject and the controller, or the implementation of pre-contractual measures to be taken at the data subject's request). The consent of the DPA is not required for transfers of personal data to third countries based on EU Model Clauses. Transfers of personal data can also take place on the basis of the Binding Corporate Rules approved pursuant to procedures established in the GDPR.

As stated above, the consent of the employee may potentially be one of the instances in which a transfer may be effected without the DPA's consent; however, as it may be questioned whether consent was freely given by an employee based on the nature of the employment relationship, obtaining the DPA's consent to a transfer of an employee's personal data or the implementation of EU Model Clauses and Binding Corporate Rules is considered a safe approach.

iii Special categories of personal data

The processing of special categories of personal data is allowed only in cases explicitly indicated in the GDPR. Employers are allowed, and indeed obliged, to process particular health information that relates to occupational health or data voluntarily supplied by the employee, based on the data subject's explicit consent. The GDPR introduces the definition of special categories of personal data, which covers data revealing racial or ethnic origins, political opinions, religious or philosophical beliefs, trade union membership, genetic data, biometric data processed for the purpose of uniquely identifying a natural person, data concerning health or data concerning a natural person's sex life or sexual orientation. Under the GDPR, the processing of these special categories of personal data is generally prohibited and allowed only in certain circumstances, for instance if it is necessary for the purposes of carrying out the obligations and exercising specific rights of the data controller or of the data subject in the field of employment and social security, and social protection law insofar as it is authorised by EU or Member State law or a collective agreement pursuant to Member State law providing for appropriate safeguards for the fundamental rights and the interests of the data subject.

Processing of personal data relating to criminal convictions and offences or related security measures can be carried out only under the control of an official authority or when the processing is authorised by EU or Member State law that provides for appropriate safeguards for the rights and freedom of data subjects. Processing of data on criminal records relating to employees is allowed only if it is explicitly required by law.

iv Background checks

In principle, unless specific types of jobs are involved, Polish law does not allow background checks on employees, including criminal records and credit checks. The Labour Code specifically lists information that an employer may request from a candidate or an employee. Additionally, based on the DPA's guidelines, even checks relating to data provided in résumés or otherwise in the recruitment process cannot be checked with, for example, previous employers or universities, without the data subject's consent.

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 reason for termination may relate to either 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.

An 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 these 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 with 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 if the employee is entitled to a three-month notice period, which may be shortened to no less than one month). If a termination agreement is signed, 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. The maximum amount of the severance pay is capped (42,000 złotys gross in 2021). Regulations introduced in response to the covid-19 pandemic limit this amount in certain cases to 10 times the minimal remuneration (28,000 złotys gross in 2021).

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.

Transfer of business

Poland has implemented Council Directive 2001/23/EC.3 Under Polish law, the relevant ramifications pertain, in particular, to the sale of an enterprise, a part thereof or selected assets as well as to the lease of an enterprise or premises. The case law of the Polish Supreme Court has specifically confirmed that the transfer of a business may also take place even when no assets are transferred, provided that the business is labour-intensive rather than capital-intensive. This might have a material effect on outsourcing projects, since the transfer of an undertaking could also occur in the event of hiring and changing an external provider or the insourcing of previously outsourced tasks.

If a transfer covers an entire business (all employees of a given employer), the transferee becomes liable with regard to the employees for all employment-related obligations that arose before the transfer and the transferor is no longer liable for those obligations. If the transfer pertains only to some of the employees, both the transferee and the transferor are jointly and severally liable in relation to the transferred employees for the obligations that arose prior to the transfer. Obviously, both employers can and often do agree between themselves on indemnity regulations; however, this does not affect the principles of third-party liability (with regard to the employees).

If there are trade unions operating at the transferor or transferee, they should be notified in writing at least 30 days before the anticipated date of transfer of:

  1. the contemplated date of the transfer;
  2. the reasons for the transfer;
  3. the legal, economic and social implications of the transfer for the employees; and
  4. any measures envisaged in relation to the terms and conditions of employment, including working conditions, remuneration and retraining.

If there are no trade unions operating at either of the undertakings, a notification of these details should be made in writing to each individual employee of both employers.

Trade union consultation is required if there are any measures envisaged in relation to changing the terms and conditions of employment. If a works council is established at either the transferor or transferee company, it should also be consulted about a contemplated transfer (prior to any binding decision being made in this respect).

Within two months of the transfer, transferred employees may terminate their employment with seven days' notice. For the employee, termination of employment in accordance with this procedure shall have the same consequences as those envisaged under labour law for termination of an employment relationship upon notice by the employer.

Outlook

The minimum wage per hour for persons rendering work or services to entrepreneurs under mandate or service agreements has been increased from 17 to 18.30 złotys gross. The minimum monthly wage for persons rendering work under employment contracts has been increased from 2,600 to 2,800 zlotys gross. Both increases are effective as of 1 January 2021.

Without a doubt, the covid-19 pandemic has changed the world of business and forced employers to adapt to new conditions. Labour law has been changing significantly and has also been trying to adapt to the new situation. Remote working has become crucial for many businesses and, in consequence, it has become a permanent part of professional life. Further, employers have had to face new challenges in respect of ensuring the safety of employees, maintaining employment and reorganising workplaces.

Rapid legislative changes have forced employers to be constantly vigilant and react immediately because acts and regulations often enter info force within a few hours of being announced. Depending on the ever-changing situation forced upon us because of the pandemic, this trend is likely to continue in 2021.

Footnotes

1 Agnieszka Fedor is a partner at Sołtysiński Kawecki & Szlęzak. A wider team of Sołtysiński Kawecki & Szlęzak's associates have contributed to this chapter both in its initial redaction and the subsequent updates. The author wishes to thank all those contributors and specifically Aneta Brzózka.

2 III PZP 1/20.

3 Council Directive 2001/23/EC of 12 March 2001 on the approximation of the laws of the Member States relating to the safeguarding of employees' rights in the event of transfers of undertakings, businesses or parts of undertakings or businesses [2001] OJ L 082/16.

Get unlimited access to all The Law Reviews content