Employee Contract Termination

Termination of an employment contract in Poland is a process governed by specific legal regulations outlined in the Polish Labor Code. Whether the termination is initiated by the employee, the employer, or happens due to the expiration of the contract, each situation must adhere to well-defined procedures. These rules are designed to protect both parties, ensuring that employees are treated fairly while also providing employers with the necessary frameworks to manage workforce changes efficiently.

In this article, we will explore the various types of employment contract terminations in Poland, ranging from voluntary resignation and termination by mutual agreement to dismissals initiated by the employer. We will also discuss the legal protections offered to employees, the notice periods required, and circumstances under which severance packages must be provided. Understanding these different forms of termination is essential for both employers and employees to ensure compliance with Polish labor laws and to avoid potential disputes.

In Poland, voluntary termination occurs when an employee decides to resign from their position of their own will. This type of termination typically requires the employee to provide their employer with a formal notice of resignation. The length of the notice period is determined by the employment contract and, in most cases, is governed by the Polish Labor Code. For employees under permanent employment contracts, the notice period ranges from two weeks to three months, depending on their length of service with the company.

Employees may resign for various reasons, such as seeking new career opportunities, relocation, or personal circumstances. When voluntarily terminating their contract, employees must submit a resignation letter, and the employer must respect the agreed-upon notice period, during which time the employee is expected to continue fulfilling their work obligations. The employer cannot alter the terms of this notice period unless mutually agreed upon.

Voluntary termination can also occur by mutual agreement between the employee and the employer, whereby both parties agree to end the employment contract before the official notice period ends. This method offers flexibility and allows for a smoother transition, often beneficial when both sides wish to expedite the process.

Termination by mutual agreement is a widely used practice in Poland, allowing both the employer and the employee to agree to end the employment relationship under mutually accepted terms. This method is considered one of the most flexible and amicable forms of contract termination, as it does not require a formal notice period and can be executed at any time.

In a termination by mutual agreement, the terms of the separation are usually discussed and agreed upon by both parties. These terms often include the effective date of termination, any severance payment or compensation, and other conditions like the continuation of benefits or the return of company property. Since this type of termination does not involve strict legal requirements like those found in unilateral terminations, it gives both sides more control over the process.

It is essential for both parties to document the agreement in writing to ensure clarity and prevent future disputes. The agreement should outline all the conditions of the termination, including any financial settlements, which must comply with Polish labor law, especially when it involves benefits or compensation. This type of termination is often seen as a win-win, as it enables the employer to avoid the complexities of a formal dismissal while allowing the employee to leave on mutually agreed terms.

Termination by contract expiration occurs when an employment contract, typically a fixed-term contract, naturally concludes at the end of its agreed-upon duration. In Poland, fixed-term contracts (umowa na czas określony) are commonly used for temporary employment or project-based work, and they automatically terminate when the contract’s specified end date is reached. No notice period is required in these cases, as the contract’s expiration is predetermined.

Polish labor law allows employers to renew fixed-term contracts; however, these contracts can only be renewed twice. After the third renewal or after 33 months of continuous employment under fixed-term contracts, the law requires the contract to be converted into a permanent employment contract (umowa na czas nieokreślony). This rule is in place to prevent employers from indefinitely keeping employees on temporary contracts and to ensure job security.

Upon contract expiration, the employer is not obligated to provide severance pay, as the employment naturally ends at the conclusion of the agreed term. However, both the employer and the employee must ensure that all final payments, such as salary for the last working period and any accrued leave, are settled in accordance with Polish labor regulations. This form of termination is often straightforward and clear-cut, as both parties are aware of the termination date from the outset of the employment relationship.

Unilateral termination by the employer, also known as dismissal, is a more formal and regulated process in Poland. It occurs when the employer decides to end the employment relationship without the employee’s consent. This type of termination must adhere strictly to the provisions of the Polish Labor Code, especially when dealing with permanent contracts (umowa na czas nieokreślony), where the employer is required to provide a justified reason for dismissal.

The most common reasons for unilateral termination include employee misconduct, unsatisfactory performance, redundancy due to restructuring, or the employer’s financial difficulties. In such cases, the employer must provide written notice of termination, outlining the reason for dismissal. This notice must also comply with the required notice periods, which range from two weeks to three months, depending on the length of the employee’s service.

Polish labor law also includes protections against unfair dismissal. If an employee believes their termination was unjustified or discriminatory, they have the right to challenge the dismissal in a labor court. Employers must, therefore, ensure that they have clear, documented evidence to support the reason for termination. Additionally, in cases of organizational restructuring, the employer may be required to offer severance pay, especially when the dismissal is due to company downsizing or liquidation.

Failure to follow proper termination procedures can result in legal disputes, compensation claims, or reinstatement of the employee. Therefore, employers must navigate this process carefully, ensuring compliance with both procedural and substantive labor laws to avoid potential litigation.

Disciplinary termination is one of the most severe forms of contract termination in Poland, allowing an employer to dismiss an employee immediately without a notice period due to serious misconduct. This type of termination, governed by the Polish Labor Code, is used in situations where the employee’s behavior or actions have violated fundamental work obligations or ethical standards.

Common grounds for disciplinary termination include gross misconduct, theft, breach of trust, alcohol or drug use during work hours, or repeated violations of workplace rules despite previous warnings. The employer must have clear, documented evidence of the employee’s wrongdoing and follow a strict legal process to ensure the dismissal is justified.

Before proceeding with a disciplinary termination, the employer is obligated to notify the employee in writing of the reasons for dismissal. This notice must be delivered within one month of the employer becoming aware of the misconduct. The document should clearly state the violations that led to the decision, ensuring that the reasons are specific and legally sound.

Since disciplinary termination does not involve a notice period, the employment ends immediately upon delivery of the dismissal notice. However, this form of termination is highly regulated, and any procedural missteps can be challenged by the employee in a labor court. If the court finds that the disciplinary dismissal was unjustified or did not follow proper legal procedures, the employee could be reinstated or awarded compensation.

Employers must exercise caution when using disciplinary termination, ensuring that the misconduct is severe enough to warrant such an action and that all legal requirements are met to avoid legal disputes.

In Poland, the notice period is a crucial aspect of employment termination, providing both the employer and the employee with a defined timeframe for concluding their working relationship. The length of the notice period is determined by the type of contract and the employee’s length of service. It applies to both unilateral terminations initiated by the employer and resignations initiated by the employee, ensuring that the departure is managed in an orderly manner.

For permanent employment contracts (umowa na czas nieokreślony) and fixed-term contracts (umowa na czas określony), the notice period is based on the employee’s duration of service with the company:

• two weeks – for employees with less than six months of service.
• one month – for employees with six months to three years of service.
• three months – for employees with more than three years of service.

During the notice period, employees are generally expected to continue fulfilling their work duties unless mutually agreed otherwise. Employers are required to respect the terms of the notice period, and in some cases, they may offer payment in lieu of notice if they prefer the employee to leave immediately. Additionally, employers may grant employees time off during the notice period to search for new job opportunities, a legal obligation if the employer initiates the termination.

In cases of probationary contracts, the notice period is shorter and varies according to the length of the probation:

• three days –  for probation periods of up to two weeks.
• one week – for probation periods exceeding two weeks but less than three months.
• two weeks – for probation periods of three months.

Severance packages in Poland are regulated by the Polish Labor Code and apply in specific circumstances where the employer initiates the termination of an employee’s contract. The primary instance where severance is required is in cases of collective dismissals or when the termination is due to the employer’s financial difficulties, such as company downsizing or liquidation. Severance payments provide financial assistance to employees who lose their jobs through no fault of their own.

The amount of severance pay is typically determined by the employee’s length of service with the company and is calculated as follows:

• one month’s salary – for employees with less than two years of service.
• two months’ salary – for employees with between two and eight years of service.
• three months’ salary – for employees with more than eight years of service.

However, Polish law sets a cap on severance payments, which cannot exceed 15 times the national minimum wage, regardless of the employee’s length of service or salary. The specific severance amount is based on the employee’s average monthly salary from the three months preceding termination.

In cases of individual dismissals not related to the employer’s financial situation or restructuring, severance pay is generally not required, unless otherwise specified in the employee’s contract or company policies. Additionally, employees who are dismissed for disciplinary reasons are not entitled to severance packages.

Severance payments, when applicable, must be made in full at the time of termination or shortly thereafter, ensuring that the employee is compensated as they transition out of the company. Severance packages can play a critical role in supporting employees during periods of unemployment and reflect the company’s responsibility to those affected by restructuring or downsizing.

Polish labor law provides robust protections for employees against unfair or unjustified dismissal. These legal safeguards ensure that employers cannot arbitrarily terminate an employee without valid reasons and must adhere to proper procedures when doing so. Employee termination protection is particularly strong for employees under permanent contracts (umowa na czas nieokreślony), where any termination by the employer must be substantiated with a legitimate cause and documented in writing.

Some of the key protections include:

• justification of termination – for employees on permanent contracts, the employer must provide a clear and lawful reason for the dismissal. Valid reasons may include poor performance, misconduct, or organizational restructuring. Without a justified cause, the employee can challenge the dismissal in a labor court.
• protected groups – certain categories of employees benefit from additional termination protection under Polish law. These include pregnant women, employees on parental leave, and workers who are nearing retirement (four years or less until the statutory retirement age). Employers cannot terminate these employees unless under extraordinary circumstances, such as company liquidation.
• consultation with Trade Unions –  if an employee is a member of a trade union, the employer is obligated to consult with the union before proceeding with the termination. The union may express its opinion on the dismissal, although the final decision rests with the employer. This process adds an extra layer of protection, ensuring that the employee’s rights are fully considered.
• anti-discrimination protections – employers are prohibited from dismissing employees based on discriminatory factors such as gender, race, religion, age, disability, or political beliefs. Termination for discriminatory reasons is unlawful, and affected employees can seek redress through labor courts.
• reinstatement or compensation – if an employee believes their dismissal was unjust or discriminatory, they can challenge the termination in a labor court. If the court rules in favor of the employee, the employer may be ordered to reinstate the worker to their previous position or provide compensation. Compensation can amount to several months’ worth of the employee’s salary, depending on the circumstances.

The termination of an employment contract in Poland is a process strictly regulated by the Polish Labor Code, designed to protect both employees and employers. Whether the termination is initiated by the employee, the employer, or occurs naturally due to contract expiration, each form of termination must comply with specific legal procedures. These rules encompass appropriate notice periods, documentation requirements, and, in some cases, the obligation to provide severance pay.

Understanding and adhering to the regulations governing contract termination in Poland is crucial to ensure a fair process and to avoid potential legal disputes. For employees, it guarantees the protection of their rights, while for employers, it provides legal security and compliance with regulations.