Posted on Categories contract termination, coronavirus

Termination of the employment contract before the employee starts work

The spread of SARS-CoV-2 has unprecedented economic consequences, both global and national. The negative effects of current events are felt by most employers. Many employers are already preparing for change, including considering layoffs and holding back on recruitment. 

Some employers have also decided to terminate newly concluded employment contracts with employees who have not yet started working. This raises some doubts as to whether and under what conditions this is acceptable.

According to the provisions of labour law, the date that an employment contract is signed should be distinguished from the date when the employee starts work. The employment relationship is only established on the latter date. Article 26 of the Labour Code states that the date on which employment starts does not have to be the same as the date the employment contract is signed. Indeed, the two dates may be quite distant from each other.

In the period between these two dates, circumstances may change and the employment of a new employee may become unjustified from a business perspective. In such a case, the employer may terminate the employment contract according to the general rules specified in the Labour Code – i.e. by giving notice or concluding an agreement with the employee (cf. judgment of the Supreme Court of 29 October 2007, II PK 56/07).

However, while the mere admissibility of terminating an employment contract does not depend on the employment relationship (i.e. from the beginning of the period of employment and thus from the moment various rights resulting from the employment are acquired), Article 36 § 1 of the Labour Code makes the notice period for any employment contract concluded for a definite or indefinite term dependent on length of service. The notice period is:

  • two weeks if the employee was employed for less than six months
  • one month if the employee was employed for at least six months
  • three months if the employee was employed for at least three years.

Therefore, if an employment contract is terminated before the new recruit has started work, it is assumed that the shortest of the notice periods mentioned above will apply – that is, two weeks  (unless the parties to the contract have agreed on another period of notice more favourable for the employee).

However, if the applicable notice period expires before the contractually agreed date that employment starts, the employee will not be entitled to remuneration during the notice period, as they have not carried out any work and are not entitled to any benefits during that period.

The same applies to the right to possible severance pay provided for in the Act of 13 March 2003 on Special Rules for Termination of Employment Relations with Employees for Reasons Not Applicable to Employees. This severance pay is obligatory where an employer employing at least 20 employees terminates a worker’s employment contract for reasons referred to in the Act (e.g. due to the position being liquidated or a reduction of employment). However, if the notice period applicable to an employee expires before the date of commencement of employment agreed in the contract, the employee will not be entitled to statutory severance pay due to the lack of any period of employment with the employer (zero length of service).  

Magdalena Świtajska, Aleksandra Wójcik