Polish Labour Law

Law firm in Warsaw with consultations on Polish Labour Law.

Main provisions of the Polish labour law contain the Polish Labour Code with its relevant implementing regulations. Especially medium-sized companies continue to discover Poland as a place to do business.

And so, companies acting in Poland cannot avoid familiarizing with Polish labour law. This article will therefore give you an overview of key provisions of the Polish Labour Code.

 

1. Polish Labour law and possibilities of cooperation with an employee in Poland

a. Employment basing on a labour contract

When entering into an employment relationship, the employee commits to perform certain work services personally in favour of the employer and under his direction, at the location and within a time period specified by the employer; the employer in turn commits to employ the employee against payment.

b. Civil contract design

The performance of certain work can be also subject to civil employment. In such case it is above all necessary to differentiate the labour contract from the personal service contract. The distinction between these two forms of employment is particularly important in determining the rights that arise from the respective contract for the liable party. So for example, only an employee who is employed basing on a labour contract is entitled to leave, maternity leave or dismissal protection.

In addition, the employer has the possibility to conclude a cooperation agreement with the employee. Here is to note that such employee is a self-employed worker and his activity must be entered both in the Commercial Register, as well as the tax office and the social security institution ZUS.

– Tips from practical experience –

When it comes to the arrangement of the contract, special importance must be attached to the fact that the Tax Office recognises the services provided on the basis of this contract by the employee as an economic activity within the meaning of the tax legislation. This is not the case, when the employer is liable towards third parties for the fulfilment of the contract, the contractual activities are performed under the direction, at the place and at the time as determined by the employer, and the employee bears no economic risk associated with the exercise of the self-employment activity, but also the employer. These are essential elements of a labour contract, which therefore should not be considered when drawing up a civil cooperation contract.

2. Polish Labour Law and different labour contract types

a. Labour contract on probation

The probation period may not exceed 3 months. Both the extension as renewal of the labour contract on probation is prohibited. Provisions contained in labour contracts stipulating a longer probation period as to the extent permitted by law are automatically void and shall be replaced by corresponding legal regulations.

The labour contract on probation may be terminated within the following terms: for a probation period of less than 2 weeks – 3 working days, for a trial period of at least 2 weeks – 1 week. If a probation period of 3 months had been agreed, a notice period of 2 weeks shall apply.

b. Temporary contract on employment

The Polish Labour Code does not contain explicit legislator’s determination of the time frames, for which a temporary contract on employment may be concluded. The Supreme Court ruling states however that the term of a temporary contract on employment may not be arbitrarily chosen. The opinion presented commonly in practice after which a temporary contract on employment could be concluded without problems for a period of two years, has no foundations in the above-mentioned jurisdiction.

– Tips from practical experience –

If there is an objective reason – such as the work in projects of certain duration known in advance – it is possible to conclude a temporary contract on employment for a longer period of time. However, if a time horizon cannot be estimated and in absence of an objective reason it is recommended to conclude this type of temporary contract only for a period of one year.

The Polish Labour Code allows for the possibility to terminate the temporary contract on employment concluded for a period of more than 6 months, with a notice period of 2 weeks. The contract must however contain a provision expressly stipulating such agreement. Whereas a temporary contract on employment concluded for a period of exactly 6 months or less, cannot be dissolved on the way of an ordinary termination.

– Tip of the advisor –

Since the labour contract on probation must not exceed three months it is useful to conclude with the new employee right from the beginning a temporary contract on employment for one year. In compliance with the above requirements, each Contracting Party has – same as in case of the labour contract on probation concluded for three months – the opportunity to terminate the contract under a two-week notice period.

Only two consecutive temporary contracts on employment are allowed. The third subsequent temporary contract on employment is converted by law into a permanent labour contract, provided that the period between the termination and renewal of the contract did not exceed one month.

c. Permanent employment contract

Permanent employment contracts have no date of termination specified. The Labour Code contains specific provisions of dismissal with regard to this type of employment contract, protecting the employees.

With regard to permanent employment contracts, the notice period is of 2 weeks for a length of employment less than 6 months, while for a length of employment exceeding 6 months it is 1 month. If the employee worked at least 3 years with the concerned employer, a notice period of 3 months applies.

3. Polish Labour Law and the non-competition clause

A distinction must be made between agreements on the non-competition clause applicable during the employment period and appropriate restrictions after termination of the employment contract.

a. Non-competition clause applicable during the employment contract

The contracting parties may agree in an additional contract that during the employment period the employee must refrain from any activity within a precisely known range, representing a competitive area to the activity exercised by the employer. If despite the clause the employee is leading a competitive activity, which is contractually prohibited and the employer suffers damage thereby, he is granted a claim for damages towards the employee, pursuant to the principles of material liability of employees contained in the Labour Code.

b. Non-competition clause applicable after termination of the employment contract

Basically, after termination of the employment contract, the worker is not bound by any non-competition clause. An exception represents the additional agreement between the employer and the employee, who has access to important information, the disclosure of which could cause damage to the employer. Such contract shall specify the validity period of the clause, as well as the amount of compensation paid by the employer in favour of the employee. This compensation shall however be not less than 25% of employee’s remuneration received during the employment period, which corresponds to the period of validity of the non-competition clause.

– Tips from practical experience –

The agreement of a contractual penalty in case of violation of the non-competition clause has usually a disciplining effect. When setting the height of the contractual penalty it shall be however noted that the amount must be limited pursuant to the principles of Labour law and may not take astronomical ranges. In 2006, a court of appeal in Poznań already dealing with this issue has decided that the penalty may not exceed 10 times the value of employee’s monthly remuneration (in return for adhering to the agreed non-competition clause).

4. Polish labour law and the possibility to control official E-Mail-Accounts

The provisions of the Polish Labour code contain no specific provisions regarding the possibility of controlling employee’s official E-Mail addresses by the employer. In this situation, the General provisions of the Labour Code are to be applied, which address the issue of respecting employee’s privacy. Pursuant to the above, the employer is obliged to protect the employee’s dignity and other personal rights. The personal rights include also among others the confidentiality of correspondence.

The legislator has not defined, what should be understood exactly under this term. Since neither Polish legal literature, nor the current legislation relate to the interpretation of this term, there is only one reference to a judgment of the Supreme Court issued in 1972 (!), which however concerns personal control of the employee, and might therefore be used only at a basic level analogous to the control of E-Mails, which did not exist by then. The basic statement of the above-mentioned judgment is the necessity to inform the employee in advance about the possibility of such a control.

– Tips from practical experience –

The employer should inform its employees about the possibility to control their official E-Mail addresses in advance. At the same time, it is advisable to prohibit private use of official E-Mail addresses. Otherwise it could happen that private emails, being subject to confidentiality of correspondence, could be found in the employee’s official E-Mail account.

5. Polish Labour Law and changes in substance of the labour contract

a. Agreements between parties

By concluding an agreement between parties, certain contractual provisions can be modified by mutual agreement.

b. Termination due to the change of contract (notice of dismissal)

Whereas by means of a termination due to the change of contract, the employer has the possibility to introduce unilaterally new work or remuneration conditions for the employee, insofar as the employee does not object.

– Tips from practical experience –

The use of notice of dismissal is permitted only in case of labour contracts which may be ordinarily terminated by the employer.

Subject of the termination due to the change of contract

While any reduction of remuneration requires a notice of amendment, in case of other assignments of a labour contract must be distinguished between essential and non-essential conditions. Only the intended amendment of essential contract provisions (apart from remuneration, this concerns the type of work, place of work, as well as the extent of working time) requires the notice of dismissal.

– Tips from practical experience –

The working conditions subject to such method of amendment however do not include the type of contract conclusion. So for example a permanent labour contract cannot be converted into a temporary contract on employment using the provision of termination due to contract changes. Furthermore, when using the provision of termination due to contract changes in a permanent labour contract, the employer must justify the reasons, for which the working conditions should be changed.

6. Polish Labour Law and termination of cooperation with an employee in Poland

a. Termination agreement

The termination agreement is the easiest form of cancelling the contract. Contrary to the cancellation, the labour contract is terminated by mutual agreement. The advantage of a termination agreement is that the employer must not expect any labour court disputes.

b. Ordinary termination of a labour contract by the employer

Effectiveness

A cancellation is a unilateral declaration on intent which has to be received and takes effect with its receipt. The receiver must at least have the opportunity to take note of the content of notice under normal circumstances.

– Tips from practical experience –

For the termination to be effective, it is not sufficient to deposit the letter of dismissal at the mail. Important is the time of receipt of the dismissal letter to determine the precise commencement of the period of notice.

Formal requirement

The letter of dismissal must have written form and in case of termination of a permanent labour contract by the employer, must indicate in the reason for termination. Furthermore, each letter of dismissal must specify the remedies available to the employee with regard to the dismissal. The notice of dismissal should also contain an indication of the period of notice.

Period of notice

The term period of notice is understood to mean the time between the given notice of termination and the subsequent termination of the labour contract. The length of the period of notice to be observed depends on the type of contract and has already been described in the course of this article.

– Tips from practical experience –

Basically, an extension of the period of notice is possible. However, the principle of employee privilege (principle of favourability) currently applied in Labour law must be observed. Pursuant to those, the provisions in labour contracts must be at least as favourable to the employees as the corresponding provisions of the Labour law. In the event of termination by the employer, an extension of the statutory period of notice is possible and is more favourable for the employee than the application of the (shorter) statutory period of notice. So for example, during the agreed extended period of notice, the employee is still entitled to receive remuneration. Hence, an extension of the period of notice in case of termination by the employee is not always beneficial for the employee. It is principally the matter of circumstances in individual cases. In case if an extended period of notice applies to the employee, it impacts for example the question of when the employee could accept a new job or how the non-competition clause should be applied during the extended period of notice.

Termination date

The term termination date is to be understood as the last day of the period of notice. The period of notice, which is measured in weeks or months ends on Saturday or respectively on the last day of the month.

– Tips from practical experience –

A notice of termination delivered not on Saturday, but another day (e.g. on the following Tuesday) with an assumed termination period of one week comes into effect only after next Saturday.

Justification of the termination

The Labour code itself contains no statement about the requirements of sufficient reasons for termination. It follows however from the law that such reasons are to be specified precisely and actual. Sweeping statements indicating that the employee does not dully fulfil the assigned tasks, is not sufficient as the sole reason.

In case law of the Supreme Court, following statements were acknowledged as being sufficient reasons for ordinary termination of contracts: reduction of employment through restructuring the company, under certain conditions also inaction as well as absence of competence, reaching pensionable age and simultaneously being entitled to receive the retirement pay, dismissal of employee in managing position, if the labour contract was related to the exercise of this function only. To note is, that the circumstances of individual cases play always a key role.

– Tips from practical experience –

The employer is subject to the obligation to indicate the reasons of termination only in case if a permanent labour contract should be resolved by ordinary termination. The ordinary termination of the labour contract on probation, as well as the temporary contract on employment requires no justification.

Rights of the employee in case of a causeless dismissal

The employee has the possibility to submit the termination declared by the employer to the competent Labour Court for verification.

Should the court conclude that the termination of a permanent labour contract is causeless, than – pursuant to an appropriate application of an employee – it might pronounce the ineffectiveness of the termination or – after the dissolution of the labour contract – request the reinstatement of the employee on the same terms. The Court has however also the possibility to impose the payment of a compensation amounting to a maximum of 3 monthly salaries for the benefit of the employee instead of the measures presented above.

c. Extraordinary notice of termination by the employer

Contrary to the ordinary termination, in case of an extraordinary termination, the employment relationship is terminated with immediate effect. The employer may part with his employee by extraordinary notice of termination if any of the reasons listed in the Labour Code apply for the employee concerned. These can be both reasons caused by the employee (including violation of basic employee’s duties to a wide extend) and involuntary (e.g. prolonged illness).

– Tips from practical experience –

Since the extraordinary termination is undertaken by the employer due to circumstances which are attributable to the employee, the notice period may be of one month only. This period begins with the date in which the employer obtains knowledge of the facts justifying the instant termination of the labour contract.

7. Polish Labour Law and working hours

Working hours are understood to mean hours in which employees are to be at disposal of the employer at the company or another place of work. The Polish Labour Code stipulates the so-called working time systems. These include, among others statutory provisions providing specific timeframes for specific types of work. Each employee is to assign one of the listed time systems.

Basically, the working time must not exceed 8 hours a day and an average 40 hours per week in an average five-day work week (so-called basic working time).

8. Polish Labour Law and the entitlement to leave

Entitlement to recreational leave

The duration of leave depends on the length of employment and amounts to 20 days, if the employee has been employed less than 10 years and 26 days if the employee has been employed at least 10 years.

Entitlement to leave on demand

The employer is obliged to grant the employee a maximum of four days of leave on demand per calendar year by the date as specified by the employee. In this case the employee must inform the employer no later than on the first day of such leave that he intends to make use of this type of short leave.

9. Polish Labour Law – conclusion

Even though the Polish Labour Law is in many areas similar to the corresponding German regulations, there are still provisions astonishing the German entrepreneur at first confrontation (see holidays on demand). The differences lie in the detail. Therefore, it is advisable to acquire professional assistance in the run-up to intended wide employment measures.

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