In our practice, we have frequently encountered situations where, despite the existence of legitimate grounds for terminating an employment contract with notice, employers refrained from taking any action due to fear that the employee might appeal the decision to the Labor Court.
Of course, we always recommend to our clients that, as a first step, the employment relationship be terminated by mutual agreement of the parties. A properly drafted agreement significantly minimizes the risk of mutual claims related to the termination of the employment relationship.
But what if the employee refuses to sign the agreement?
Here is our practical guide:
I. Analyze the Employee’s Situation
Labor law provisions define certain groups of employees whose employment relationship is subject to special protection. Special employment protection means that the employment contract cannot be terminated with notice, including for:
- pregnant women,
- employees on parental leave,
- employees who have less than four years left until reaching retirement age,
- employees who are absent from work for a justified reason, until the time limits entitling the employer to terminate the contract without notice have expired,
- employees working part-time on the basis of Article 186(7) of the Labor Code.
Keep in mind that only the employer’s bankruptcy or liquidation (not the elimination of a position) removes special employment protection.
II. Ensure That Consultation with the Workplace Trade Union Organization Is Not Required
The obligation to consult the intention to terminate an employment contract with the workplace trade union organization applies only to indefinite-term contracts and fixed-term contracts, but only if the employee whose contract is to be terminated is a member of the trade union or is represented by it, and only if the trade union is actually functioning within your company.
Other employee representative organizations that are not trade unions do not have the authority to consult on employment termination matters.
III. Ensure That the Grounds for Termination Are Specific and Understandable to the Employee
Polish labor law does not provide a closed list of possible reasons for terminating an employment contract. However, this does not mean that the employer has unlimited discretion in formulating the grounds for termination. The reason provided must be sufficiently significant to objectively determine that the continued employment of the employee is “too burdensome” for the employer.
Providing a false (fictitious) reason is equivalent to not stating a reason at all.
IV. Position Elimination as a Reason for Termination
For many years, the elimination of a position has been one of the most frequently cited reasons for terminating employment contracts. A position may be eliminated due to organizational restructuring (e.g., discontinuation of certain services or outsourcing) or due to workforce reductions resulting from the company’s deteriorating financial situation and the need to cut costs.
The legitimacy of such organizational changes is not subject to judicial review—the decision falls within the employer’s autonomous managerial authority. However, it is crucial that these changes are genuine and that there is a clear connection between the decision made and the termination of the employment contract.
We always recommend that decisions regarding organizational changes be documented at least in the form of a resolution or statement issued by the company’s authorized representatives.
The grounds cited in the notice of termination largely determine the course and outcome of any legal proceedings. Keep in mind that during legal proceedings, you cannot rely on reasons that were not initially provided in the termination notice.
V. Provide the Correct Notice Period
The notice period depends on the employee’s length of service with your company. Note that an employee’s total length of service includes previous employment with another entity if the company underwent a legal transfer of undertaking. Additionally, all employment periods based on employment contracts between your company and the employee count, regardless of the number of contracts or any gaps between them.
If the employee’s length of service is:
- no more than six months – the notice period is two weeks,
- more than six months but no longer than three years – the notice period is one month,
- more than three years – the notice period is three months.
VI. Check Whether Severance Pay Is Required
Severance pay is required if the employment contract is terminated for reasons unrelated to the employee (such as workforce reduction or position elimination) and the employer has at least 20 employees. The amount of severance pay depends on the employee’s length of service:
- Less than two years of service – one month’s salary,
- More than two years but no more than eight years – two months’ salary,
- More than eight years – three months’ salary.
Severance pay is calculated based on the same rules that apply to the monetary equivalent of unused annual leave.
The maximum severance pay cannot exceed 15 times the minimum wage applicable on the date of employment termination, as determined by separate regulations.
VII. Maintain Written Form and Inform the Employee About Their Right to Appeal to the Labor Court
The termination notice must be in writing and signed by an authorized person or bear a qualified electronic signature, which is especially relevant for employees working remotely.
We always recommend that our clients obtain the employee’s signature confirming that they have read the termination notice.
The notice should also inform the employee of their right to file an appeal with the labor court within 21 days of receiving the termination notice.
What Claims Can the Employee Pursue?
An employee may demand that the termination be declared invalid or, if the contract has already been terminated, request reinstatement under the previous conditions or—most commonly—seek compensation of up to three times their monthly salary.
During court proceedings, the court examines whether the termination was justified and whether labor law provisions were violated.
If the court finds that the employee’s claim for invalidation of the termination or reinstatement is unfounded or impossible, it may award compensation instead. The same applies if, before the court ruling, the fixed-term contract naturally expired, or if reinstatement would be impractical due to the short remaining duration of the contract.
Need Legal Support?
Contact us if you need legal assistance in terminating an employment contract and wish to minimize the risk of lengthy and costly litigation.
