Labour & Employment

Poland: Changes Regarding Employment Agreements for a Definite Time

The judgment of the European Court of Justice C-38/13 of 13 March 2014 has triggered some important amendments to the Polish Labour Code regarding employment agreements for a definite period of time. Changes are expected to be implemented soon.

Current practice

Accord­ing to Arti­cle 33 of the Pol­ish Labour Code, employ­ment agree­ments con­clud­ed for a def­i­nite peri­od of time longer than six months may stip­u­late a pro­vi­sion that allows ter­mi­na­tion of the agree­ment after two weeks’ notice. In com­par­i­son to agree­ments for an indef­i­nite peri­od, or even to agree­ments for a pro­ba­tion peri­od, the sit­u­a­tion of employ­ees varies in terms of the length of notice peri­od.

In case of agree­ments for an indef­i­nite peri­od, the sta­bil­i­ty of employ­ment depends on the peri­od of ser­vice with a cer­tain employ­er, which means that the notice peri­od extends rel­a­tive­ly to the employ­ment peri­od. Thus, the required notice peri­od may be two weeks for a peri­od of employ­ment short­er than six months, one month for a peri­od of employ­ment longer than six months or three months for a peri­od of employ­ment longer than three years, with a spe­cif­ic employ­er.

The sit­u­a­tion of an employ­ee who works on the basis of employ­ment agree­ment for a def­i­nite peri­od is the same, no mat­ter if the agree­ment was con­clud­ed for sev­en months or sev­en years. The notice peri­od is always lim­it­ed to two weeks.

Impact of the judgment – Why do we need changes?

The Euro­pean Court of Jus­tice stat­ed that the Pol­ish reg­u­la­tions con­cern­ing the notice peri­od of agree­ments for a def­i­nite peri­od vio­late Clause 4.1 of the frame­work agree­ment on employ­ment for a def­i­nite peri­od – because they are inde­pen­dent of the peri­od of employ­ment. Clause 4.1 was con­clud­ed by sev­er­al inter­na­tion­al organ­i­sa­tions gath­er­ing rep­re­sen­ta­tives of indus­try, employ­ers, trade unions and enter­pris­es (UNICE, ETUC, CEEP) on 18 March 1999, as an annex to the Direc­tive of the Coun­cil of the EU 99/70/EC of 28 June 1999. The Direc­tive requires equal treat­ment of all cat­e­gories of work­ers and pro­hibits unfavourable treat­ment of agree­ments for a def­i­nite peri­od if the only rea­son is a spec­i­fied time of exis­tence of the agree­ment.

Although, the Direc­tive is not part of the pol­ish leg­is­la­tion sys­tem, it might jus­ti­fy an employee’s claims in case of pos­si­ble dis­putes against its employ­er. It might also be used as an argu­ment for equal­is­ing their rights with those of oth­er employ­ees.

How it started and potential effects

The pro­ceed­ing relat­ed to the employ­ee, pend­ing before the Dis­trict Court in Białys­tok (Sąd Rejonowy w Białym­stoku), was a sub­ject to a pre­lim­i­nary rul­ing of the Euro­pean Court of Jus­tice. A woman was employed on the basis of an agree­ment for five years, while her gen­er­al peri­od of ser­vice amount­ed to more than 20 years. In this sit­u­a­tion, the court felt, a two weeks’ notice peri­od was gross­ly unfair com­pared with the sit­u­a­tion of oth­er employ­ees who might have had less expe­ri­ence and a short­er peri­od of ser­vice.

There­fore, equal­i­sa­tion of rights between employ­ees work­ing on a con­tract for a def­i­nite and an indef­i­nite peri­od may not be lim­it­ed only to the peri­od of notice but may also refer to con­sult­ing oblig­a­tions with trade unions in case of ter­mi­na­tion of the agree­ment, as well as to jus­ti­fi­ca­tion of ter­mi­na­tion.

Anoth­er issue which dif­fer­en­ti­ates the sit­u­a­tion of employ­ees is the wide scope of poten­tial dues owed to them as a result of ille­gal ter­mi­na­tion. After the above judg­ment, the Pol­ish leg­is­la­tor must also tack­le this prob­lem.

Expected amendments

So far the ini­tial project pre­pared by the group of deputies pro­vides for a max­i­mum peri­od of employ­ment of 24 months for an agree­ment for a def­i­nite peri­od. If the gen­er­al ser­vice peri­od exceeds this peri­od, the agree­ment is con­sid­ered as con­clud­ed for an indef­i­nite peri­od. The project allows exten­sions of agree­ments for a def­i­nite peri­od if the rel­e­vant pro­vi­sions are stip­u­lat­ed in the col­lec­tive labour agree­ment.

The most impor­tant amend­ment con­cerns the peri­od of notice. As men­tioned, the par­ties to the employ­ment agree­ment may pro­vide a two weeks’ notice peri­od. Under the amend­ing project, such a pos­si­bil­i­ty will be lim­it­ed to agree­ments con­clud­ed for more than 12 months, and the notice peri­od will be extend­ed to one month for agree­ments con­clud­ed for a peri­od longer than 18 months.

Com­pen­sa­tion for unlaw­ful ter­mi­na­tion will also be changed up to 12 months remu­ner­a­tion; it is cur­rent­ly lim­it­ed up to three months.
The amend­ments to the Labour Code are expect­ed in 2015, but the final form is still unknown. It is not easy to fore­see the end result, but a pos­si­ble jus­ti­fi­ca­tion of the planned amend­ments is the wors­en­ing sit­u­a­tion of employ­ees work­ing on agree­ments for a def­i­nite peri­od; for exam­ple, a lack of cred­it­wor­thi­ness or dif­fi­cul­ties tak­ing out loans.

The expected changes may limit employment for a definite period. On the one hand, it may be beneficial for employees. On the other, it may harm the running of a business and force employers to use other forms of employment, such as more flexible civil law contracts, and thus abuse employee rights.