29.06.2022 Labour law

[Poland] Labour Code 2022: how to terminate a fixed-term contract after 1 August?

The legislator is preparing an amendment to the Labour Code which is compliant with the EU directive. The draft bill assumes introduction of an obligation for an employing entity to state the reason for terminating a fixed-term employment contract. What does this mean for employers?

The government’s draft amendment to the Labour Code, which is a result of an EU directive on transparent and predictable working conditions in the European Union, provides for changes in terminating fixed-term employment contracts.

New termination rules – what will change in August 2022?

The key change is that employers will be obliged to state the reason for terminating a fixed-term employment contract with an employee. The justification for termination is to be in writing, so that employees will have an additional basis for possible dispute resolution in court. However, providing reasons for termination will not apply to contracts for a trial period, and the justification for termination must be real and specific.

What is important is the fact that if an employer fails to give a reason for termination of the contract or gives a false reason, an employee will have the right to be re-employed. This will be possible if the dismissed employee takes legal action and the court decides to have him or her re-employed and/or to be paid compensation, while the burden of proving the legitimacy of the termination lies with the employer.

The issue of reinstatement and/or payment of compensation is to be regulated in detail. Namely, the dismissed person may be entitled to be reinstated, however, if the duration of the contract has expired prior to the ruling or the duration of the contract is about to expire then reinstatement may not be considered advisable. In many situations, therefore, the main option will still be compensation.

Currently, in the case of an unlawful termination of an employment contract for an indefinite period of time, the dismissed employee is entitled to compensation in an amount not lower than the amount of remuneration for the notice period, and giving the reason for termination of the contract is obligatory precisely for contracts of employment for an indefinite period of time.

The amendment to the Code is to become effective on 1 August 2022, as this is the deadline for implementing the directive into the Polish legal system. The Sejm is currently debating the changes and the final shape of the act is not yet known.

Learn more: Labour Code 2022 – important changes for employers and employees

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