Posted on Categories contract termination

How to avoid mistakes when terminating an employment contract during an employee’s illness?

Employees expecting to receive termination notice often take sick leave to protect themselves from dismissal (or at least to postpone it). During the coronavirus pandemic, the risk of losing a job is increasing, whilst digitally obtaining a medical certificate is easier than ever. When dismissals have to take place in unusual circumstances, e.g. during a period of remote work, it is important to be familiar with the rules concerning termination of employment in the event of an employee’s illness. Contrary to popular belief, it is not the illness itself that guarantees protection against termination, but the absence from work justified by an appropriate medical certificate.

When and from what does a sick note protect an employee?

Pursuant to Article 41 of the Labour Code, an employer cannot terminate an employment contract during the employee’s leave, as well as during the other employee’s justified absence from work, if the period allowing employment termination without notice has not yet expired. The most common type of “other justified absence from work” is the employee’s illness documented by a medical certificate (i.e. the ZUS e-ZLA form, still referred to as L4 in Poland).

Inability to work due to illness may protect the employee only from termination by the employer and, as a rule, against an changing notice, but not against termination of a contract:

  • without notice due to the employee’s fault, in particular due to a serious breach of basic employee obligations (Article 52 of the Labour Code)
  • without termination without the employee’s fault (Article 53 of the Labour Code)
  • upon expiry of the term of the contract (in the case of fixed-term contracts).

It is possible to terminate an employment contract by mutual agreement of both parties during the employee’s illness.

Article 41 of the Labour Code refers to Article 53 of the Labour Code in the part concerning “the period allowing employment termination without notice”. It states that the employer may terminate the employment without notice if, among others, the employee’s inability to work due to illness continues:

  • for longer than three months, if an employee was employed for less than six months
  • for longer than the total period of receiving salary and benefits or rehabilitation benefit for the first three months, if an employee was employed for at least six months, or if the inability to work was caused by a work related accident or occupational disease (as a rule, 272 days maximum in total).

In companies which employ more than 20 employees, these rules cannot be modified for employment termination for reasons not attributable to employees, in particular, under collective redundancy procedures. However, absence documented by sick notes will not protect an employee from an changing notice for reasons not related to them. In addition, such an employee will not be entitled to a compensatory allowance.

In exceptional cases, in the event of the employer’s bankruptcy or liquidation, the employer may still terminate or amend the employee’s contract, despite the employee’s absence due to illness (Article 411 § 1 of the Labour Code).

Importantly, serving termination notices during the employee’s inability to work due to illness before the end of the period specified in Article 53, will be effective but flawed. This means that the notice period will begin to run and the contract will be definitively terminated at the end of the notice period. However, the employee will be able to appeal to the labour court. If the appeal is justified, the employer may be obliged to continue the employee’s contract or to reinstate them or to pay compensation.

What about “getting sick” on the day of the notice?

When assessing a possible breach of Article 41 of the Labour Code, the moment the termination notice is delivered and not the date of employment contract termination is taken into account. In this context, absence from work due to illness which has already occurred during the notice period will be irrelevant. On the other hand, it is crucial to determine precisely the moment from which the employee is protected from termination.

In practice, it is quite common for an employee to “fall ill” on the day he/she receives notice. Sick notes do not indicate a specific time from which an employee was unable to work, which does not permit determination on this basis alone whether the employee already had the protection provided for in Article 41 of the Labour Code at the moment of receiving the notice.

The decision of the Supreme Court of 11 March 1993 (I PZP 68/92) is crucial for this issue. It broke the previous pro-employee case law and initiated a new one. It states that terminating an employment contract of an employee, who performed work and then proved that on the day of termination they could not work due to illness, does not violate Article 41 of the Labour Code. For the purpose of analysing termination notices in the context of this provision, the Supreme Court equated the notion of work attendance with performing employee obligations arising from the employment contract or readiness to perform them. An employee who is present at work in this context is not protected from employment contract termination, even if they have a medical certificate confirming their inability to work on that day. The Supreme Court also made it clear that the key condition is absence from work and not the illness of the employee itself.

On the other hand, an employee who is in the workplace for a purpose other than to work, will be protected. A flagship example is the employee arriving at the workplace only to deliver a sick note. With their present digitalisation this situation will undoubtedly become rarer.

How to put theory into practice during the pandemic?

In the part referring to “absence from work”, as well as its aforementioned interpretation, Article 41 of the Labour Code allows for a relatively easy assessment of the termination’s legality in terms of this provision, in situations where an employee works at the company on a daily basis. Cases where an employee, despite their physical absence from work, provides work or is ready to provide it are less obvious. Currently, the two most common examples (not counting mobile workers) are remote work and standstill.

In the case of remote work, employees often (and nowadays, due to the limitations to work in co-working spaces, almost entirely) work from home, in the other words, the place where they would most likely be on sick leave. The latter can now be obtained without even leaving your home. The sudden “sickness” of an employee working remotely, often during allotted task time, may turn out to be an effective trap for the employer, who does not take due care when terminating the contract. 

Another unusual situation related to the COVID-19 pandemic concerns notice delivery during standstill, both the ones specified in Article 81 of the Labour Code, and during the economic standstill provided for in the so-called anti-crisis shield and the Act of 11 October 2013 on special solutions related to the protection of workplaces.

One of the pre-requisites of standstill (regardless of its type) is the employee’s readiness to work, and so, in theory, terminating an employee’s contract during the standstill cannot violate article 41 of the Labour Code. In practice, absence at work in connection with the standstill means that it cannot be confirmed whether an employee, despite having sick note was actually working. In such case, the whole emphasis is placed on their readiness to work. If the employer decides to terminate the contract and does not have proof of the employee’s readiness to work on the day the termination notice is served, there is a good chance that the employee’s possible sick note will be sufficient basis for the notice to be flawed. With this in mind, it is a good idea to contact the employee on standstill, immediately before contract termination to ensure that they are ready to work.

These considerations are another argument (apart from the working time register) for determining a method for confirming the presence of employees working remotely and to verify their readiness for work during the standstill. This may be particularly important in the context of independent employees, who are obliged to report the results of their work or answer to their superiors only at the end of the day or every few days. The risk of an employee referring to their sick leave covering the day of the notice’s delivery will be much lower if the employer has evidence of the employee’s presence at work, performance of duties resulting from the employment contract or confirming readiness to perform them.

It is also worth noting that in the era of digitalisation of sick notes that are visible to employers in the system immediately after they are issued (at least in theory), the risk of inadvertently violating Article 41 of the Labour Code is lower and the scope for abuse by employees is narrower.

Piotr Podsiadły