Employment termination law and legislation in Poland

1. Dismissal of employees

1.1 Reasons for dismissal

The reasons for dismissal must be provided if a contract is terminated without notice or if a contract of unfixed duration is terminated with notice. The reason must be real and specific, so the employee can easily understand the grounds for dismissal. The reasons for termination with notice may be attributable to the employee (e.g. non-performance or improper performance of the employee’s duties), or not attributable to the employee (e.g. redundancy). The Polish Labour Code does not list such reasons.

Termination without notice (summary dismissal) may be justified for a number of reasons, but is only permitted when certain statutory conditions are met.

In the remaining case, involuntary termination does not require justification.

1.2 Form

Similar rules apply to both ordinary termination with notice and summary dismissal without notice.

The employee must be served with the original letter of dismissal, and not  an electronic file, e-mail, fax or photocopy. The letter of dismissal must be  in Polish and signed by a person authorised to act on behalf of the company. It is possible to request that the employee signs other language versions of the letter in addition to the Polish version. The letter of dismissal must include information about the employee’s right to appeal to a labour court. The deadline for an employee to appeal against enforced dismissal is 21 days.

1.3 Notice period

Statutory notice periods vary depending on the type of employment agreement and the length of service with a given employer.

For a contract of unfixed duration and a fixed-term contract, the notice period is:

  1. two weeks for an employee with less than six months’ service; or
  2. one month for an employee with at least six months’ but less than three years’ service; or
  3. three months if the employee has been employed for three years or more.

Probationary period employment contracts have shorter notice periods, of three working days to two weeks, depending on the agreed length of the probationary period. Polish law recognises probationary period contracts as a separate type of employment contract and not as an initial period of an indefinite term employment contract. After the probationary period, a new contract can be agreed.

Notice periods of a week or multiple weeks always end on a Saturday, and notice periods of a month or multiple months always end on the last day of the month.

The contractual or statutory notice period does not have to be observed for a summary dismissal.

1.4 Involvement of works council

A single dismissal for employee-related reasons (e.g. performance-related dismissal) is not subject to any collective notification or consultation requirement.

Only group dismissals or significant reductions of the workforce undertaken as a part of a restructuring trigger the notification and consultation requirement. The employer must notify / consult a works council about any matters relating to employment status and structure, any predicted or proposed changes in this respect, and actions taken to maintain the current level of employment. However, this will only be necessary when the anticipated changes are permanent or significant (in relation to the employer’s size).

Works council members may not be dismissed involuntarily (either with or without notice) during their term of office without the prior consent of the works council.

1.5 Involvement of a union

Notification is required if the employer wishes to dismiss with notice a permanent employee (employed under an employment contract for an unfixed duration) who is a trade union member, or whose rights and interests the trade union has agreed to defend.

The trade union must be informed in writing, including the reasons for termination, at least five days before the employee receives the letter of termination. If the trade union decides that the dismissal is unjustified, it may present the employer with its substantiated objections in writing. An employer may proceed to dismiss having considered the opinion of the trade union (although this opinion is not binding). If the submission of a trade union opinion is delayed or absent, the employer may proceed without any additional consideration.

Notification is also required if the employer wishes to dismiss an employee without notice. In such a case, the trade union has three days to express its opinion in writing.

Trade union officers, or other employees named in a special resolution   of the trade union’s board of management, are protected against involuntary dismissal and may not be dismissed without trade union consent. The number of employees protected under a special resolution depends on   the number of employees who are members of the trade union or the number of the company’s officers (a decision left up to the trade union’s board of management).

1.6 Approval of state authorities necessary

Not generally necessary.

However, employers have certain obligations to inform the Labour Offices of a group redundancy procedure, particularly for large-scale redundancies.

1.7 Collective redundancies

A group dismissal occurs when an employer employing at least 20 employees terminates the employment relationships of at least the following numbers of employees within 30 days, with notice, and for non-employee-related reasons:

  1. ten employees − if the employer employs fewer than 100 employees; or
  2. 10% of the total workforce − if an employer employs at least 100 but fewer than 300 employees; or
  3. 30 employees − if the employer employs at least 300 employees or more.

These thresholds include terminations on mutual agreement if at least five such terminations have been initiated by the employer.

Small companies (employing fewer than 20 employees) are not subject to the group dismissal procedure, and may proceed without any prior notification of / consultation with employee representatives or local authorities.

1.8 Summary dismissals

Dismissal without notice is only permitted in specified circumstances.

An employee may be summarily dismissed (disciplinary dismissal) if he:

  1. commits a serious breach of his basic employee’s duties; or
  2. commits a crime while employed (the offence must be obvious or confirmed by the judgment of a final court), provided that such crime makes his further employment impossible; or
  3. through his own fault loses a license necessary for the performance of duties connected with the post.

Summary dismissal may only be exercised within one month of the employer becoming aware of the reasons for dismissal.

It is also possible for the employer to summarily dismiss an employee without fault due to long-term absence from work, where:

  1. the employee is unable to work by reason of illness:
    1. for a period longer than three months, if the employee has less than six months’ service with a given employer; or
    2. for a period longer than the period the employee has been receiving sick pay and sick benefit (typically 182 days) and the first three months of rehabilitation benefit (additional 90 days); and
  2. the employee’s justified absence from work for other reasons lasts longer than one month.

1.9 Consequences if requirements are not met

If the termination of a contract without notice, or termination of a contract of unfixed duration with notice, is unlawful the employee may claim reinstatement or compensation.

Reinstatement cannot be claimed for an unlawful termination with notice during a fixed-term or probationary contract.

If the contract is of unfixed duration, compensation of between two weeks’ and three months’ salary (and not less than the employee’s salary during the notice period) may be awarded.

In an unlawful termination without notice, an employee may in general only claim compensation of up to three months’ salary. Further entitlement can be claimed on the basis of general civil law rules.

1.10 Severance pay

If an employer employs more than 20 employees, and dismisses an individual solely for non-employee-related reasons (e.g. due to a reduction in the workforce or redundancy of a work post), it must pay a severance payment equivalent to:

  1. one month’s salary − for employees with less than two years’ service with a given employer; or
  2. two months’ salary − for employees with between two and eight years’ service; or
  3. three months’ salary − for employees with more than eight years’ service.

However, severance pay is capped by statute at 15 times the national minimum monthly salary (capped at PLN 39,000 from January 2020, equivalent to approx. EUR 9138).

1.11 Non-competition clauses

Post-contractual non-competition clauses

Post-contractual non-competition restrictions are permitted when an employee has access to confidential information, the disclosure of which could damage the employer. In this case, the parties should in this case enter into a separate post-termination non-competition agreement. This should specify the restricted time period and compensation due to the employee (which must not be lower than 25% of the employee’s salary for the duration of the agreement). Compensation may be paid in monthly instalments.

1.12 Miscellaneous

Not applicable.

2. Dismissal of managing directors

2.1 Reasons for dismissal

A management board member may be dismissed from the corporate function without cause, unless the company deed or articles of association provide otherwise.

Apart from dismissal from the board, the contract under which the management board member received remuneration (if concluded) must be terminated separately. Polish law does not provide for a specific type of contract for board members.

In civil law relationships, if the contract (e.g. management contract) is terminated without significant reason, the company should cover any loss incurred by the management board member. Further entitlements may be provided for individual contracts.

A management board member may also be employed under an employment contract. If this is the case, the reasons for dismissal must be provided if a contract is terminated without notice or if a contract of unfixed duration is terminated with notice. The reason must be real and specific, so the managing director can easily understand the grounds for dismissal. The reasons for termination with notice may be attributable to the managing director (e.g. non-performance or improper performance of the managing director’s duties), or not attributable to the managing director (e.g. redundancy). The Polish Labour Code does not list such reasons.

Termination without notice (i.e. summary dismissal) may be justified for a number of reasons, but is only permitted when certain statutory conditions are met.

In the remaining case, involuntary termination does not require justification. Further entitlements may be granted in individual contracts.

2.2 Form

In the case of limited liability companies (‘spółka z ograniczoną odpowiedzialnością’), management board members may be dismissed from office by a resolution of shareholders unless the company deed states otherwise.

In case of joint-stock companies (‘spółka akcyjna’), a management board member can be dismissed by the supervisory board, unless the articles of association state otherwise. The shareholders can also dismiss a management board member at any time.

The management board member concerned and court register should then be notified of the decision regarding the dismissal, but the dismissal is valid from the date of the relevant resolution (unless the resolution itself states otherwise).

If a management board member has an additional civil contract (e.g. a management contract), this must be terminated separately as it does not automatically expire upon the management board member’s dismissal from the board.

In dealings with a company’s management board member, the company should be represented by the supervisory board (if any is present) or an attorney-in-fact appointed by a resolution of shareholders meeting. These rules do not apply to a former management board member deemed to be an ordinary worker from the time of his dismissal from the board. Any additional contracts with the former management board member may be terminated by the board.

2.3 Notice period

A management board member may be dismissed from the corporate function without any notice period. However, notice periods may be stipulated in civil contracts.

2.4 Involvement of works council

No involvement.

2.5 Involvement of a union

For management board members employed under employment contracts, notification is required if the employer wishes to dismiss with notice a permanent managing director (employed under an employment contract for an unfixed duration) who is a trade union member, or whose rights and interests the trade union has agreed to defend.

The trade union must be informed in writing of the reasons for termination at least five days before the employee receives the letter of termination. If the trade union decides that the dismissal is unjustified, it may present the employer with its substantiated objections in writing. Having considered the opinion of the trade union (which is not binding), an employer may still proceed to dismiss. If the submission of a trade union opinion is delayed or absent, the employer can proceed without any additional consideration.

Notification is also required for an employer to dismiss a managing director without notice. In such a case, the trade union has three days to express its opinion in writing.

Trade union officers, or other managing directors named in a special resolution of the trade union’s board of management, are protected against involuntary dismissal and may not be dismissed without trade-union consent. The number of employees protected under a special resolution depends on the number of employees who are members of the trade union or the number of company officers. (This decision is the responsibility of the trade union’s board of management).

2.6 Approval of state authorities necessary

Not required.

2.7 Collective redundancies

A group dismissal occurs when an employer of at least 20 employees terminates the employment relationship of at least the following numbers of employees within 30 days, with notice, and for reasons unrelated to work performance:

  1. ten employees − if the employer has fewer than 100 employees;
  2. 10% of the total workforce − if an employer has at least 100 but fewer than 300 employees; or
  3. 30 employees − if the employer has at least 300 employees or more.

These thresholds include termination based on mutual agreement if the employer has initiated at least five such terminations.

Small companies (employing fewer than 20 employees) are not subject to the group dismissal procedure, and may proceed without any prior notification or consultation with employee representatives and local authorities.

2.8 Summary dismissals

For management board members employed under an employment contract, dismissal without notice is only permitted in specified circumstances.

A managing director may be summarily dismissed (i.e. a disciplinary dismissal) if the individual:

  1. commits a serious breach of his basic duties;
  2. commits a crime while employed (the offence must be obvious or confirmed by the judgment of a final court), provided that such a crime makes his continued employment impossible; or
  3. through his own fault loses a license necessary for the performance of duties connected with the position.

Summary dismissal may only be exercised within one month of the employer becoming aware of the reasons for dismissal.

It is also possible for the employer to summarily dismiss a managing director without fault due to long-term absence from work, where:

  1. the managing director is unable to work due to illness:
    1. for a period longer than three months, if the managing director has less than six months of service with a given employer; or
    2. for a period longer than the period the managing director has been receiving sick pay and sick benefits (typically 182 days) and the first three months of a rehabilitation benefit (additional 90 days).
  2. the managing director’s justified absence from work for other reasons lasts longer than one month.

2.9 Consequences if requirements are not met

For management board members employed under an employment contract if the termination of contract without notice or termination of contract of unfixed duration with notice is unlawful, the managing director may claim reinstatement or compensation.

Reinstatement cannot be claimed for an unlawful termination with notice during a fixed-term or probationary contract.

If the contract is of unfixed duration, compensation of between two weeks’ and three months’ salary (and not less than the managing director’s salary during the notice period) may be awarded.

In an unlawful termination without notice, a managing director may in general only claim compensation of up to three months’ salary. Further entitlements can be claimed on the basis of general civil law rules.

2.10 Severance pay

For a management board member employed under an employment contract, if an employer of more than 20 employees dismisses an individual solely for non-employment-related reasons (e.g. due to a reduction in the workforce or redundancy of a work position), the employer must pay a severance payment equivalent to:

  1. one month’s salary − for employees with less than two years’ service with a given employer; 
  2. two months’ salary − for employees with between two and eight years’ service; or
  3. three months’ salary − for employees with more than eight years’ service.

However, severance pay is capped by law at 15 times the national minimum monthly salary. (From January 2020, the cap is PLN 39,000 or EUR 9,138).

Both civil law and employment contracts may include voluntary severance payments.

2.11 Non-competition clauses

For management board members employed under an employment contract, post-contractual non-competition restrictions are permitted when a managing director has access to confidential information, the disclosure of which could damage the employer. In this case, the parties should enter into a separate post-termination non-competition agreement. This should specify the restricted time period and compensation due to the managing director (which must not be lower than 25% of the managing director’s salary for the duration of the agreement). Compensation may be paid in monthly instalments.

Civil law contracts may provide for competition restrictions. Statutory provisions on minimum compensation do not apply to management board members employed under a civil law contract.

2.12 Miscellaneous

Not applicable.