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The Coronavirus has caused trouble with employee vacation leave

The pandemic caused by the SARS-CoV-2 virus and restrictions that it has evoked has brutally forced employees to review their vacation leave plans. On one hand this was caused, among others, by the closing of borders and mandatory quarantine while, on the other, by the sudden decrease in demand for labour in certain sectors. The availability of certain employees (even remotely) has become imperative for further business, whereas remaining employees have faced the perspective of dismissal or at least mandatory leave. It should be noted that entities conducting business in sectors listed in Shield 4.0 as paramount in securing proper functioning of the state and satisfaction of certain day-to-day needs (including the energy sector) have been statutorily obligated to refuse granting leave (not only vacation leave) or to reschedule/recall them. 

In the case of both these groups vacation leave arrangements agreed upon with superiors at the start of the year may no longer apply. On one hand employers have been forced to change vacation dates of some employees (including the need to recall certain staff members from their leave), while on the other hand obligating remaining employees (for reasons of savings) to make use of vacation leave. Shield 4.0 has addressed the latter situation.

Change of vacation dates

Existing labour law provisions regulate situations when it is necessary to reschedule previously agreed vacation leave (for reasons attributable to a company or employee), as well as the right of an employer to unilaterally obligate an employee to return to work earlier.

Specific regulations introduced under anti-crisis shield laws do not modify the above general principles.

This means that also in times of a pandemic:

Shifting of vacation leave

  1. The shifting of employee vacation leave should be limited only to exceptional cases. It is allowed for specific employer needs and only when the absence of an employee would seriously disrupt the course of work. The employer independently decides when such a situation occurs, whereby the reason for shifting vacation leave cannot be known to the parties at the time of agreeing on an employee vacation leave date. In the case of vacation plans for 2020 (mostly drafted in January and February of this year) this should not be difficult to prove if the change of vacation leave date is tied to the pandemic and the sudden need for a given person to work. An employee cannot, therefore, independently commence vacation leave on an “old date” by claiming the absence of circumstances allowing such leave to be shifted.
    Financial risk to the employer associated with a shift of vacation leave during the pandemic can also be lesser than in previous years. Although the Labour Code does not directly obligate firms to reimburse employees with costs directly incurred in connection with a shift of vacation leave (such as, among others, the equivalent of non-refundable trip deposits at travel bureaus, hotel reservations, unused bus or rail tickets), it is nevertheless assumed that, analogously as in the case of recall from vacation leave, an employee may count on compensation for these costs. This year most Poles have decided to spend their vacation leave in Poland, frequently at home or on a family property, the costs of shifting vacation leave may be few or even none for an employer.
  2. An employer is obligated to shift an employee’s vacation leave if the latter cannot commence it at the previously agreed date for reasons justifying absence from work. Such reasons are, in particular, illness or quarantine in connection with a contagious disease (such as COVID-19), but also care for children due to the closure of schools. This means that an employee subject to quarantine (on the basis of an individual decision of sanitary services or crossing the Polish border at a time when persons returning from abroad had to undergo such quarantine) may expect a shift in vacation leave and not its loss. This employer obligation only arises when an employee has been sent to a mandatory quarantine, and not when self-isolating voluntarily.
  3. A shift of vacation leave can take place upon employee request justified by important reasons. At a time of pandemic such reasons may include, among others, inability to spend a vacation jointly with an entire family, recall or shifting of travel date by an operator or resignation from travel due to fear of illness. An employer is not bound by such request and independently determines whether the reason cited by an employee sufficiently justifies a change of vacation leave plans.

    Recall from vacation leave
  4. Recall from leave already underway, similarly as shifting of an employee’s leave, is limited to extraordinary circumstances. Differently, however, than in the case of shifting leave, these should be reasons that could not have been foreseen at the time of commencing vacation, and not its planning (which in uncertain times of the pandemic and responding changes to the way in which business is conducted should be relatively easy to demonstrate). An employer is also obligated to cover direct costs of recall from vacation leave (in this case this obligation directly stems from the Labour Code). Recall from vacation leave can take place in any form (e-mail, telephone or even SMS), subject to the employee being able to become acquainted with the employer’s instruction. In practice, it may be difficult in certain instances to contact an employee away on leave to call for an earlier return (e.g. if at a location where an employee is staying there is a problem with network or no Internet connection, or if it turns out that the employee’s current private telephone number is unknown). It should also be noted that an employee is not obligated to check e-mail daily (this has been confirmed by a Supreme Court ruling dated 8 March 2017, case no. II PK 26/16).

What does Shield 4.0 change?

The act on co-payments to interest on bank credit granted to entrepreneurs affected by COVID-19 and fast-track proceedings to approve an arrangement in connection with COVID-19 dated 19 June 2020 (so-called Shield 4.0), which entered into force on 24 June, introduced the right of employers to send employees on mandatory leave. Until now, an employer could unilaterally obligate an employee without employee earlier request or consent to use up vacation leave only during a notice period, and also when an employee did not use up vacation leave during the calendar year for which such leave was due (overdue leave). The Labour Code did not directly address the second situation, but it’s allowance was confirmed by the Supreme Court (e.g. Supreme Court ruling dated 24 January 2005, case no. I PK 124/05). Shield 4.0 confirms this practice as legal during the pandemic, but with certain modifications that may prove to be less beneficial than hitherto principles.

According to the special law, an employer may at any time, without employee consent and in bypassing vacation leave plans, grant an employee overdue vacation leave of up to 30 days and the employee must use up this leave.

This means that presently:

  1. any employer can make use of the above solution, not only an entity affected by COVID-19, and any employee may be forced to take vacation leave. The only limitation is the principle of equal treatment in employment. Mandatory leave also cannot be used as a form of workplace bullying against an employee. The situation should be avoided when only one employee within a team performing the same work is sent on vacation leave and colleagues continue work (and receive bonuses), unless the firm demonstrates objective reasons for such different treatment.
  2. An employer may send an employee on mandatory vacation leave independently (without the need to obtain the employee’s acceptance) and, in principle, freely set the start and end date of such leave (see, however, remarks below). An employee may therefore be obligated to use vacation leave starting from tomorrow and without prior notice. An employee does not have the right to oppose such an instruction or the right to independently commence leave (in each instance must receive an employer instruction).
  3. An employer may obligate an employee to only use so-called overdue vacation leave, namely that has not been used up from previous calendar years (thus, also including leave for 2019). This means that if an employee fully used up vacation leave from previous years (has none outstanding), an employer does not have the right to unilaterally send such staff member on vacation leave – the use of vacation leave from the pool for 2020 must be agreed upon with the employee.
  4. On the basis of Shield 4.0 an employee may be obligated to use up to 30 days of overdue leave. If an employee has even more overdue leave, this regulation may be less beneficial to an employer than hitherto binding principles, under which such a limit does not apply. Opinions differ as to what to do with overdue vacation leave exceeding the limit of 30 days. The first assumes that the new law introduces special principles requiring an employee to use overdue vacation leave and that it substitutes existing practice during the pandemic. Therefore, the use of “above limit” leave will require employee consent. The second interpretation claims that in line with Shield 4.0 a vacation leave up to 30 days does not require employee consent, whereas current practice (that also does not require employee consent) applies to remaining overdue vacation leave.
    Applying the new laws in compliance with either of these interpretations of Shield 4.0 may potentially expose an employer to risk, whereby the scope and gravity of such risk will also depend on the circumstances of an individual case.
    There is no obstacle to combining overdue leave with current leave with employee consent. It should be noted that Shield 4.0 does not modify the amount or rules on granting vacation leave for 2020, as it should still be granted to employees by 31 December 2020 and no later than by 30 September 2021 and in the amount of 20 or 26 days for full-time employees.
  5. Until now, overdue leave should have been granted at the latest by 30 September of the following year (namely vacation leave for 2019 by 30 September 2020). In its justification Shield 4.0 states that the law’s intent was to “temporarily suspend the obligation to take overdue vacation leave by 30 September 2020” and avoid the accumulation of overdue vacation (for 2019) and vacation leave due in the current year (2020). Therefore, in accordance with this intent, an employer may grant overdue vacation leave of 30 days at any time, also after 30 September. In our assessment there should be no delay in granting overdue leave after 30 September 2020. The above special rules only apply during a period when there is a state of epidemic or threat of an epidemic in Poland and only during such period does an employer not bear criminal liability for failure to grant overdue leave by 30 September 2020. If a state of pandemic is called off shortly before 30 September or after this date and employees do not commence overdue leave at the latest on 30 September 2020, an employer may then be exposed to the risk of a fine ranging from PLN 1,000 to 30,000 (although given the pandemic and frequent changes to legislation we believe that the State Labour Inspectorate (PIP) will view such situations with greater understanding and limit itself to obligating employers to grant such leave as quickly as possible).

Katarzyna Magnuska