Formal issues

The starting point for terminating an employment contract with notice or terminating it without notice should be the formalities. 

• Ensuring correct form – the statement terminating the employment contract with or without notice should be in writing or bear a qualified electronic signature within the meaning of the eIDAS Regulation.
• Proper representation of the employer – for employers who are organisational units (e.g. companies), the statement should be issued by persons authorised in accordance with the general rules of representation (e.g. by a member of the management board authorised to act independently) or by other persons duly authorised to terminate employment (e.g. a human resources employee authorised under an appropriate power of attorney).
• Information on the employee’s right to appeal to a labour court – the statement terminating the employment contract with or without notice should include information on the employee’s right to appeal to a labour court.
• Trade union consultation – if the employer has any trade union in place, one should remember to consult them on the termination of the employment contract, whether with or without notice.
• Protection against dismissal – when preparing the document terminating the employment contract with or without notice, it is important to bear in mind the restrictions that arise under special protection against dismissal (e.g. in connection with taking maternity leave, holding membership of the council of employees or pre-retirement protection against dismissal).

Termination for reasons unattributable to the employee

The employer’s statement terminating the definite or indefinite term employment contract should state the reasons for the termination. If the employment contract is being terminated for reasons unattributable to the employee, the most common reason for termination is the liquidation of the position or a reduction in jobs. The termination document should take these distinctions into account.

A position is liquidated when the employer eliminates a unique role from its organisational structure.

A reduction in jobs occurs when the number of jobs in a group of the same or similar jobs is reduced.

Significantly, in a reduction in jobs, the employer may not select an employee for dismissal completely arbitrarily. The employer must use objective criteria (e.g. work performance, qualifications) to assess all the employees in the group in which the job reduction is to take place. Only after such an assessment should the employer select an employee for dismissal. Case law states that if the termination of employment affects an employee selected by the employer from a larger number of employees working in the same or comparable positions, the reason for the termination should be not only organisational changes or a reduction in jobs, but also the given employee’s situation, as determined by the selection criteria.
If the employer has at least 20 employees, in terminating contracts for reasons unattributable to the employees, it must consider the provisions of the Act on Group Redundancies. If the number of such redundancies exceeds the limits specified in the regulations, a special procedure will be required, as specified in the above Act.

However, even if these limits are not exceeded (including in the case of individual redundancies), it is important to remember the need to disburse severance pay. This will apply to employers with at least 20 employees, if the reasons unattributable to the employee are the sole reason for the redundancy. Statutory severance pay is payable at the rate of 1 to 3 months’ remuneration, depending on the employee’s length of service with the employer (but not more than 15 times the minimum remuneration for work applicable on the date of the termination of employment).

Termination for reasons attributable to the employee

Also in a termination of a definite or indefinite term employment contract for reasons attributable to the employee, the notice of termination must state the reason, which must be true, real, specific, adequately justify the employer’s decision and current.

• The reasons for termination may vary greatly, such as poor performance, failure to meet deadlines or violation of internal operating rules. The notice of termination must mention the circumstances that have actually occurred, and which are the real reason for the termination of the employee’s employment. In the event of a dispute, a court will examine whether the reason given in the notice of termination is true and real.
• The reason for the termination must be specific. There are no guidelines as to the level of detail required for the reason for termination. However, in practice, when formulating the reason for termination, it is worth asking whether, without knowing the context of the case, including the allegations made against the employee’s conduct, a court could understand the exact infringement alleged by the employer.
• The reason for the termination must adequately justify the decision of the employer. It is well-established in case law that a notice to terminate an employment contract is a normal way of ending it, and the reasons for the termination do not have to be particularly serious or extraordinary. However, it should be remembered that the reason for dismissing an employee may not be trivial. If the breach itself is significant (e.g. a breach of a non-competition clause), it is not worth delaying the decision to terminate the contract. However, in minor breaches (e.g. occasional lateness), it is worth waiting with the decision and documenting any further irregularities on the part of the employee. Then, several minor breaches described in the notice of termination may better justify the employer’s decision and thus strengthen its position in the event of a dispute.
• On the other hand, the immediacy of the reason for termination is also important. The employer should not delay too much with the decision to part ways with the employee. According to the Supreme Court’s case law, the overall circumstances of the case determine how long after the employer has become aware of a misconduct it may still constitute a valid reason for termination. In this regard, the Supreme Court refers to the deadlines set out in provisions on disciplinary penalties.

Termination of an employment contract without notice due to a fault of the employe

An employer may terminate an employment contract without notice due to the employee’s fault in the event of:

• serious breach by the employee of basic obligations of the employment
• the employee committing a criminal offence during the employment contract which makes it impossible to continue employing that person in the position held, if the offence is obvious or has been established in a final judgment
• the employee’s fault in losing the qualifications necessary to perform the work in the position held.

Therefore, all methods of terminating an employment contract without notice due to the employee’s fault must have solid grounds.

In practice, the most common situation of such a termination of an employment contract is a serious breach of basic employee obligations (these cannot be any employee obligations, but only those of a fundamental nature). This does not mean, however, that the dismissal may be just due to allegations regarding the performance of the employee's official duties.

The list of basic employee obligations is broader – a point of reference here may be Article 100 of the Labour Code, which indicates the need, among other things, to observe working time, care for the good of the workplace, keep confidential any information which if disclosed could harm the employer, or observe the rules of good social coexistence in the workplace. An example, then, of a reason for termination without notice which is not strictly related to the performance of official duties could potentially be, say, insulting colleagues as it violates the rules of good social coexistence.

However, it is important to note that not every breach of basic employee obligations may be grounds for disciplinary dismissal – because it must be serious. In practice, this means a need to assess the extent to which the employee’s conduct was culpable (e.g. deliberate damage to equipment) and the extent to which it violated or threatened the employer’s interests (e.g. damage to reputation because of publishing false information about the employer). Albeit, it is not necessary for harm to have occurred.
A key issue that should also be taken into account when preparing a disciplinary dismissal is the deadline for serving it. This may not occur more than one month after the employer has become aware of the circumstances justifying the decision to terminate the contract in this way. For the deadline to start running, this information must have been received by:

• the employer himself/herself (e.g. in the case of sole traders)
• the person or corporate body managing the employer, e.g. the management board (in the case of organisational units, e.g. limited liability companies), whereby it is sufficient for the deadline to start running if one of the members of this body receives information about the employee’s conduct
• another person authorised to carry out acts under labour law (e.g. a representative), if the employer has appointed such a person – therefore, if a superior gains awareness but is not authorised to terminate the employment contract with the employee, this will not determine the start of the deadline.

In the context of the above deadline, it should also be borne in mind that it starts to run from the time when the employer obtains sufficiently reliable information about the employee’s reprehensible conduct. This does not mean, however, that the employer should make a hasty decision and, when there is insufficient information, refrain from, for example, a time-consuming investigation. This is because if an investigation is conducted in such a situation, the deadline will start its course only from the date of its completion.

Termination of an employment contract without notice for no fault of the employee

An employer may terminate an employment contract without notice if the employee’s justified absence from work exceeds the limit specified in the Labour Code. The limit depends on the length of service with the employer and the reason for the absence.

The employer may terminate the employment contract without notice if the employee's inability to work due to illness has lasted:

• longer than 3 months – if the employee's length of service with the employer is less than 6 months
• longer than the total duration of receiving remuneration and benefits for this (namely 182 days in most cases) and receiving rehabilitation benefit for the first 3 months – if the employee’s length of service with the employer is at least 6 months, or if the inability to work was caused by an accident at work or an occupational illness.

An employment contract may also be terminated without notice in the event of some other justified absence from work lasting longer than 1 month.

In practice, cases involving the termination of employment in the above way are most often brought before the courts due to doubts and errors associated with the duration of the period of protection, including the application for and receipt of rehabilitation benefit. Below are a few practical comments on this.

• It often happens that after the end of the period of benefits (usually 182 days), the employer fails to be informed of the employee having received a rehabilitation benefit. If the employer terminates the contract in such a situation in the above-mentioned way before the end of 3 months from the end of the period of benefits, and it turns out later that the employee’s application for rehabilitation benefit was approved, then such termination will be invalid.
• If the employer knows that the Social Insurance Institution (ZUS) has not granted rehabilitation benefit to the employee and terminates the contract in the above-mentioned way before the end of 3 months from the end of the period of benefits, and it turns out later that, as a result of an appeal against ZUS’s decision, the employee will be granted rehabilitation benefit, then such termination will be invalid.

It should be remembered that the above termination of contract may not take place in the employee’s absence due to childcare – while receiving the relevant benefit. It also may not occur while the employee is in isolation due to an infectious disease – during the period of receiving remuneration and benefits for it. The employee may not be dismissed in the above- described way also after the employee reports for work due to the cessation of the reason for the absence.

Documentation concerning contract termination

In many cases, it may turn out that proper documentation of a dismissal is just as important as its proper implementation.

In terms of formalities, the documentation should usually include, among other things, confirmation of consultations with the trade union or documents proving the employer’s representative’s authority to terminate the employment contract.

As for substantive issues, it should primarily be able to confirm the validity of the reason for termination or dismissal without notice. Depending on the procedure, this may include, for example, emails showing the employee’s misconduct in a disciplinary dismissal, or documents regarding the reorganisation, new structures and comparison of employees, if the termination is due to a reduction in the workforce.
Due to the burden of proof, this documentation will be crucial for the employer in any court dispute. It is therefore worth retaining it, as it may constitute important evidence in labour court proceedings.

Nina Bronisz, Joanna Dudek