The Council of Ministers on February 15, 2022 adopted a draft law on amendments to the Labor Code and certain other laws (list number: UC118). The Draft is currently undergoing parliamentary work (Parliamentary Druk No. 2335). The reason for amending the Labor Code is to be the work on implementing two EU directives into Polish law. According to the primary assumptions, they should be implemented by August 1 of this year, however, they have yet to be adopted. Currently, the most probable effective date for the new regulations is January 1, 2023.
In connection with the European Commission’s statement on the different treatment of fixed-term employees compared to permanent employees, it was concluded that Polish regulations on the termination of fixed-term contracts are incompatible with EU regulations.
The unequal treatment of employees under the two aforementioned contracts is therefore unjustified, and amendments have been proposed to the terms of termination of employment contracts for fixed-term employees.
How does this work until now?
Currently, employers are obliged to justify only the termination of a contract for an indefinite period, which is undoubtedly more favorable from the point of view of an employee employed under such a contract. The proposed changes to the terms of termination of fixed-term contracts include the introduction of new provisions to the Labor Code governing:
- the obligation to indicate the reason for termination of the employment contract,
- the obligation to notify in writing the company trade union organization representing the employee about the termination and the reasons for it,
- repeal of provisions providing that an employee is entitled only to compensation for unjustified termination of an employment contract.
In the event that it is determined that the termination of a fixed-term employment contract is unjustified or violates the provisions on termination of employment contracts, and the contract has already been terminated, according to the planned amendments, the employee, in addition to compensation, will also have the opportunity to apply for reinstatement.
If the proposed amendments come into force, the employer will be obliged not only to indicate the reason for the termination of a fixed-term employment contract itself, but also to make it sufficiently concrete and give it in an understandable way. In the event of possible litigation, the employer must remember that during the court proceedings, the reasons for termination of an employee’s employment must be the same as those indicated on the notice of termination given to the employee. This is because the employer is not allowed to invoke any other additional reasons for termination.
According to the legislator, these changes will remove inequalities in the Labor Code between fixed-term and permanent employment contracts.
All these changes boil down to improving working conditions for employees in the European Union. The obligation to justify the termination of a fixed-term contract, performs a kind of additional protective function for the employee, while at the same time burdening the employer with additional formalities and greater risk associated with a possible appeal by the employee against the decision of his superior. Consequently, this may discourage employers from entering into such contracts.
Justification of termination of a fixed-term contract may become mandatory as early as January 1, 2023.
Link to the draft of the Act is available here