Labour regulations

1. The Labour Code
2. Types of employment contract
3. Ways of ending a work relationship
   1. Termination with the agreement of the parties
   2. Termination with notice
   3. Termination without notice (forthwith)
   4. Protection against termination
   5. Consequences of employment contract being terminated by employer with notice contrary to the law
   6. Consequences of employment contract being terminated by employer without notice contrary to the law
4. Working hours
5. Vacation
6. Employee liability for damage caused to employer
7. Benefits due to the employee from the employer during a period of temporary incapacity to work
8. Non-employment engagement relations
9. Components of social security premiums paid by employer and employee
10. Trade unions
11. Workers councils

1. The Labour Code

The Labour Code is the key legal act regulating relations between employers and employees. It sets out conditions under which work can be carried out in Poland.

Employment contracts cannot be less advantageous to the employee than the Labour Code and secondary regulations issued thereto provide.

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2. Types of employment contract

An employment contract can be signed

• for a trial period
• for a non-fixed term
• for a fixed term (including to replace an employee - in the event of his or her  justified absence from work; the employer can hire another worker under a fixed term employment contract for the period of absence). 

An employment contract for a trial period can be entered into for no more than three months in order to check the employee’s qualifications and whether he can be employed to carry out a specific type of work. Concluding another trial period contract with the same employee can only be done in two cases, e.g. 1) if the employee is to be employed in order to carry out a different type of work or 2) at least three years after termination or expiry of a previous employment contract, if the employee is to be employed to carry out the same type of work.

The period of employment under one fixed term employment contract and the total period of employment under fixed term employment contracts concluded between the same parties cannot be more than 33 months, and the total number of these contracts cannot be more than three. If these limits are exceeded, it will lead to the employment contracts being transformed into non-fixed term contracts.

These restrictions do not apply to employment contracts concluded for a fixed term:

1. in order to replace an employee during justified absence from work,
2. in order to carry out casual or seasonal work,
3. in order to carry out work for a term of office,
4. if the employer gives objective reasons attributable to the employer

- provided conclusion of the above said contracts serves in a given case to satisfy actual temporary demand and is necessary in light of all the circumstances in which the contract is concluded.

An employment contract is concluded in writing and should be signed no later than on the day the employee starts working. If no contract is signed, then the employee should be provided with written confirmation of the contract conditions before he is allowed to start work. Any changes in employment contract conditions should also be made in writing. The employer should include additional written information about certain engagement terms to the employment contract. Labour Code provisions set out the regulations that should be included in the employment contract and in the additional written information.

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3. Ways of ending a work relationship

An employment contract can be dissolved

• with the agreement of the parties,
• by one of the parties giving notice (employer or employee) with a notice period,
• by one of the parties giving notice without a notice period.

A contract concluded for a fixed term is dissolved at the end of the term for which it was concluded (although it can be dissolved earlier).

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3a. Termination with the agreement of the parties

Any employment contract can be terminated with the agreement of the parties; at any time and on the initiative of either party; irrespective of the type of contract and possible special duration protection. If a contract is terminated in this way on the employer’s initiative, he may sometimes be obliged to pay the employee severance pay (particularly in the case of terminations for reasons for which the employee is not responsible).

The employer has to pay severance pay if:

• it terminates an employee’s employment contract either with notice or by agreement between the parties,
• the reasons for the termination are attributable to the employer,
• the employer has at least 20 employees,

Employees are entitled to severance pay of:

• one month’s pay if they have worked for the employer for less than 2 years,
• two months’ pay if they have worked for the employer for between 2 and 8 years,
• three months’ pay if they have worked for the employer for over 8 years.

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3b. Termination with notice

A contract is terminated with notice when either the employer or employee notifies the other party that he intends to terminate the work relationship with notice. The employment contract is then terminated at the end of a specified period, i.e. at the end of the notice period. An employment contract can only be terminated by the employer if the conditions set out in the Labour Code have been met. One of these is that the employer has to give specific, genuine reasons for the termination.

Notice periods

The length of the notice period depends on the type of contract and the position held by the employee. During the notice period, the employee is entitled to receive his normal salary.

Employment contract notice periods:

• Employment contract for a trial period

  • Three working days, if the contract is concluded for not more than two weeks
  • One week, if the contract is concluded for more than two weeks but less than three months
  • Two weeks, if the trial period is three month
    
    
• Employment contract for a fixed and a non-fixed term
  
  • Two weeks, if the employee has worked for the employer for not more than six months
  • One month, if the employee has worked for the employer for at least six months but less than three years
  • Three months, if the employee has worked for the employer for at least three years

The employer may send the employee on gardening leave to the end of the notice period. In this case, the employee retains the right to remuneration.

Notice of changes

Notice of changes to work conditions or pay make it possible for the employer to change -  under rules specified in the Labour Code -  engagement conditions in the employment contract to conditions less favourable to the employee. Employment contract notice provisions apply to notices of changes to work conditions or pay. This means, among other things, that the employer should give reasons for the change. A notice of change can also lead to the termination of the employment contract should the employee not accept the proposed new conditions.

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3c. Termination without notice (forthwith)

The employer can terminate the employment contract without notice if the employee is at fault (dismissal) and also if the employee is not at fault. A contract terminated because of a fault on the employee’s side can be due to:

• serious breach of basic employee duties (such as drinking alcohol at work, leaving the workplace without justifiable cause, refusing to carry out a task assigned)
• committing a crime during the term of the employment contract, if the crime is obvious or has been confirmed by an unappealable court sentence
• culpable loss of the rights required to work in the position held

An employment contract can be terminated without notice and if there is no fault on the employee’s part if he is unable to work due to:

• incapacity to work caused by an illness lasting for more than three months, if the employee has worked for the employer for less than six months;
• incapacity to work caused by an illness lasting for more than the total period for which he has received a salary, sickness benefit or rehabilitation allowance for the first three months  in accordance with the rules set out in the Labour Code and other provisions, if the employee has worked for the employer for at least six months or if the incapacity to work is due to an accident at work or a work-related illness;
• absence justified on grounds other than those given above lasting for more than one month.

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3d. Protection against termination

Under labour law, employers are prohibited from giving notice to certain employees and, in some cases, they are also prohibited from terminating an employment contract without notice. This protection covers employees who find themselves in a specific situation or who belong to a specific group, among others:

• employees who are on vacation, maternity leave or unpaid carer’s leave
• employees who are on sick leave with a doctor’s certificate
• employees approaching retirement age, i.e. who have less than four years before being entitled to a pension if the employment period allows them to attain this pension entitlement once they reach this age
• employees who are pregnant
• union activists

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 3e. Consequences of employment contract being terminated by employer with notice contrary to the law

An employee can question whether employment contract termination complies with the law and may file one of the following claims against the employer in court:

• to be reinstated at work (and if the notice period is still running – for the termination notice to be declared ineffective) and for pay for the time spent not working (usually limited to 3 times the monthly salary),
• for compensation.

It is possible that the labour court will not uphold an employee’s request for the termination notice to be declared ineffective or to be reinstated at work if it determines that upholding the request is impossible or groundless; in this case the labour court will award compensation.

An employee can only demand compensation if he/she was employed under a term employment contract, i.e. a trial period contract, or a fixed term contract.

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3f. Consequences of employment contract being terminated by employer without notice contrary to the law

An employee basically has a choice of claims in this case too and can request to be reinstated at work or compensation. Only in the case of term employment contracts when reinstatement at work would not be possible or in the case of defective termination of the employment relationship forthwith during the notice period can an employee file a claim for compensation.

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4. Working hours

Working hours cannot exceed eight hours in any 24 or an average of 40 hours in an average five-day working week in a reference period applied by the employer of not more than four months.

However, the Labour Code provides an exception to this rule, e.g. relating to work which, due to production technology, cannot be broken off (so-called 24-hour shift work); in this case, the number of working hours in any 24 can be extended.  Overtime refers to hours which the employee works over and above normal working hours.

Overtime is permitted:

• if rescue action is required to protect human life or health, to safeguard property or the environment or to carry out emergency repair work
• if the employer has special needs

Overtime cannot exceed 150 hours in any one calendar year for each worker, unless a collective bargaining agreement, the employer’s work regulations or the employment contract provide otherwise. Weekly working hours plus overtime cannot exceed an average of 48 hours in the reference to period applied by the employer.

For overtime hours worked, the employee is entitled, in addition to his normal salary, to a supplement of:

• 100% of pay for working nights, Sundays and bank holidays, which are not, under his work schedule, the employee’s working days, or days off given to the employee in lieu of Sundays or bank holidays worked in accordance with his work schedule
• 50% of his salary for working overtime on any day other than those mentioned above
• 100% of his salary for every overtime hour worked above the average weekly norm in the reference period, unless the norm was exceeded as a result of overtime for which the employee is entitled to receive the supplements mentioned in the points above

Right to undisturbed rest - all employees are entitled to at least 11 hours undisturbed rest in every 24 and at least 35 rest hours each week.

Night work covers the eight hours between 21:00 - 07:00. A night worker as defined by the Labour Code covers cases, among others, where an employee whose working hours include at least three night hours in any 24. The working hours of a night worker cannot exceed eight hours in any 24 if his work is particularly hazardous or involves heavy physical or mental strain. Any employee working nights is entitled to a supplement to his salary of 20% of the minimum hourly wage for every hour worked.

Days free of work are Sundays and public holidays. Working on Sundays or public holidays is permitted, among other things:

• in respect of shift work
• in respect of work which is necessary in view of its value to society and the daily needs of mankind, e.g. in establishments that provide services to individuals, commercial centres,
• to provide services with the use of electronic communication measures or telecommunication devices, received outside the territory of Poland, if for receiver of the service the days are his working days.

The rule is that employees who work on Sundays and public holidays are entitled to another day off in lieu.

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5. Vacation

All employees are entitled to an annual unbroken paid vacation.  An employee who is just starting his working life attains the right, in the calendar year in which he starts work, to vacation with every month that passes of 1/12 of the total vacation to which he is entitled after one year of work. An employee gains the right to the next vacation in each subsequent calendar year.

Vacation entitlement is as follows:

• 20 days - if the employee has been working for less than 10 years
• 26 days - if the employee has been working for at least 10 years

The working period on which vacation entitlement depends includes time spent in education, depending on the type of school finished, e.g.:

• basic vocational school - length of course but not more than three years
• secondary vocational school - length of course but not more than five years
• secondary school of general education - four years
• vocational college - six years
• higher education institution - eight years

The above periods cannot be added together.

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6. Employee liability for damage caused to employer

The rules of employee liability for damage caused to his employer depend on whether the employee inflicted the damage knowingly or accidentally. If the damage sustained by the employer is caused by the employee accidentally as a result of non-performance or undue performance of work duties, the employee’s liability is limited. In this case, the employee will be liable for damage to the extent of the actual loss incurred by the employer; the amount of damages cannot be more than three months’ salary. If the employee inflicts damage knowingly, he will be liable for the full amount of the damage.

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7. Benefits due to the employee from the employer during a period of temporary incapacity to work

In the event of the employee’s incapacity to work due to:

• illness or isolation in respect of a infectious disease - lasting in total up to 33 days in a calendar year, and in the case of an employee who has reached 50 years of age - lasting in total up to 14 days in a calendar year - the employee is entitled to 80% of the salary paid to him by his employer; if the incapacity to work lasts for more than 33 days, the employee receives sickness benefit on rules set out in other provisions
• an accident on the way to or from work, or illness during pregnancy - lasting in total up to 33 days in a calendar year - the employee is entitled to 100% of the salary paid to him/her by his/her employer;
•  medical examinations required for organ donors – lasting for a total of up to 33 days in a calendar year - the employee retains the right to receive full remuneration

If the incapacity to work referred to above lasts in total for more than 33 days in a calendar year, the employee receives sickness benefit  on the rules set out in separate regulations.

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8. Non-employment engagement relations

Work can sometimes be carried out on the basis of civil law contracts (freelance agreement, service agreement, specific task agreement or agency agreement). A person working under these types of contract does not have the employee rights set out in the Labour Code.  In such contracts there is no element of the subordination that is typical in employment relations, thus the person carrying out the work under such contract has the freedom to decide how the work should be performed.

Some of the features differentiating a civil law agreement from a specific task agreement are:

• that the orderer does not give the contractor/person accepting the order direct instructions
• the party carrying out the activity/task can be either an individual or an enterprise
• no limitation on the number of subsequent civil law contracts concluded,
• no vacation, severance pay or other employee benefits

It is not admissible for an employment contract to be replaced with a civil law contract if the same Code conditions regulating the work relationship are retained.

9. Components of social security premiums paid by employer and employee

The employer is also obliged to pay a premium to the State Fund for Disabled (PFRON). The duty to pay the premium to the Fund and the amount of premium depends on the number of people employed, their average remuneration and the total number of disabled employees.

The minimum gross wage for an employee working under an employment contract in Poland is PLN 2,000 as of 1 January 2017 and in the case of mandate or other service contracts the gross minimum hourly rate from 1 January 2017 is PLN 13.

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10. Trade unions

The Trade Union Act dated 23 May 1991 states that a trade union is a voluntary and self-governing workers’ organisation formed to represent and defend workers’ rights and their social and professional interests.

Trade unions can be formed and joined by all employees and, sometimes, by other individuals (such as members of agricultural production co-operatives, people working under agency agreements or the unemployed).

A trade union can be set up by 10 or more people authorised to do so, who adopt a resolution to form the union, adopt its statutes and elect a founding committee of 3 to 7 members.

A trade union must be registered in the Polish Court Register. If the founding committee fails to apply for registration within 30 days of the union formation date, the formation resolution expires. Once the trade union is registered, it becomes a legal person.

In principle, an employer cannot terminate or alter a trade unionist’s employment contract with notice without the consent of the company trade union’s leadership.

The fundamental rights of trade unions include:

1. the right to negotiate and execute collective bargaining agreements and other statute-based agreements,
2. the power to agree on rules, especially work and pay rules,
3. the right to express opinions on legislative objectives and bills, as far as trade unions are able to do so, and the right to request entities with legislative powers to pass or alter a statute or other normative act (solely representative organisations within the meaning of the Act on the Trilateral Socio-Economic Committee and Provincial Social Dialogue Committees dated 6 July 2001),
4. the right to give an opinion or approval or to object in individual employment matters, especially termination of an employment contract with or without notice,
5. the right to request the Supreme Court to explain provisions of labour and social security laws; this right is available to sector trade union organisations.

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11. Workers councils

On 25 May 2006, the Act on Informing and Consulting Employees took effect. It authorises employees whose employer has at least 50 workers to form a workers council.

On 8 July 2009, the provisions of the Act amending the Act on Informing and Consulting Employees of 22 May 2009 took effect. They were enacted after the Polish Constitutional Tribunal ruled that the provisions laying down the procedure for electing workers council were unconstitutional to the extent they prevented employees who were not members of trade unions from participating in elections (judgment of 1 July 2008, ref. K 23/07). The Constitutional Tribunal held that such provisions violated freedom of association and equal treatment and non-discrimination principles. Until now, non-unionists employed in an undertaking where a representative trade union operates have not been able to influence elections, proceedings or the performance of functions by members of a workers council.

Workers councils elected under the unconstitutional provisions can only serve until the end of their terms of office. Under the new provisions, workers council members are elected by the entire staff.

The Act states that employers with 50 or more workers must inform them of their right to set up a workers council. Workers councils are not set up in state-owned enterprises in which there is workers’ self-management of the enterprise, mixed enterprises employing at least 50 staff and state film institutions, where this role is played by workers councils.

The employer must hold elections for a workers council (which comprises 3, 5 or 7 employees depending on the employment level at a given company) upon the request of at least 10% of the employees. The employer cannot terminate council members’ employment contracts with or without notice or give them worse employment and pay terms without the council’s consent.

One of the fundamental rights of a workers council is the right to be informed and consulted about:

1. employer’s operations and economic situation,
2. employment level and structure, any changes to employment level and employment level maintenance,
3. any actions that could lead to significant changes in work organisation or employment bases.

The European Works Council Act dated 5 April 2002 states that councils should be established at undertakings or groups thereof with at least 1,000 employees in Member States and at least 150 employees in each of at least two Member States if there is a relationship between Poland and a given foreign undertaking, e.g. the latter has its registered office in Poland. The Act specifies the European works council establishment method as well as the rights and obligations of the council and the employer.

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(Last update: February 2017)

This document has been drawn up for the Polish Investment and Trade Agency by:

Domański Zakrzewski Palinka sp.k.