Contributed By Hogan Lovells (Warszawa) LLP
In principle, Polish employment law does not stipulate a differentiation between blue-collar and white-collar workers. However, there are certain special provisions in the Labour Code that apply to executives, relating to overtime, maximum weekly working time and minimum rest periods; in particular:
Employment contracts should be concluded in writing; however, the lack of a written form will not make the contract invalid. If the agreement is not concluded in writing, the employer is obliged to at least provide the employee with a written confirmation of the employee՚s employment conditions prior to the commencement of their work. The failure to complete the above requirement triggers the employer՚s liability for committing an offence against the employee՚s rights, but does not cause the invalidity of the employment relationship. The written form requirement will also have been met if the document is signed electronically using a qualified electronic signature.
In Poland, employment agreements can be concluded for:
As a general rule, only three consecutive fixed-term contracts are permitted, and the period of employment under fixed-term contracts between the same parties cannot exceed 33 months. It is common practice to employ regular (non-senior-level) employees under an employment agreement for a probationary period (or fixed term) first and to conclude an agreement for an indefinite term afterwards. An employee in a senior-level position typically receives a permanent agreement for an indefinite period from the beginning of their employment.
The employment agreements must be in writing and in Polish unless the employee, if they are not a Polish citizen, requests that the execution of the employment agreement be in a different language.
The parties to the employment agreement are free to choose the law of another country to govern the employment relationship. However, if the work is to be performed in Poland, certain employee entitlements, as imposed under Polish law, would need to be recognised by the employer.
Generally, the working time limit amounts to eight hours a day with an average of 40 hours a week, within an average five-day working week (the basic reference period amounts to four months) subject to extraordinary working time systems that include certain extensions. The limit, including overtime work, amounts to an average of 48 hours a week within the adopted reference period.
There are also provisions that guarantee the minimum daily and weekly rest periods (a minimum of 11 hours per day and 35 hours once a week) and the prohibition of work on Sundays/public holidays (subject to certain exceptions). These limits can be modified based on the system and work time schedule adopted.
Overtime work is, in principle, permitted for the employer՚s justified needs or a rescue action. Overtime should not exceed 150 hours annually, but the employer can modify this to up to 416 hours.
For overtime work, employees are entitled to their regular remuneration plus 50% or 100% additional compensation. Instead of overtime compensation, the employer can grant the employee time off. For employees who regularly work outside the office and whose working time cannot be subject to an employer’s control, it is possible to stipulate a lump-sum overtime compensation corresponding to the estimated amount of overtime work.
The parties are free to agree the amount of remuneration. However, the remuneration cannot be lower than the official minimum wage. The minimum wage for employees is established and adjusted every year by the government. In 2023, the gross minimum remuneration for fulltime employees during the period between January and June was equal to PLN3,490 (approximately EUR780), whereas from July to December it will be PLN3,600 (approximately EUR800). In the case of civil law contracts, such as service contracts, the minimum remuneration in the first half of the year was PLN22.80 (approximately EUR5), however in the second half it will be PLN23.50 (approximately EUR5.30) gross per hour.
The payment of a variable salary is not regulated in the statutes, but is a matter of negotiation between the parties to the employment agreement.
Holiday Leave
An employee is entitled to:
Periods of previous employment, even with a different entity, are included in the work record on which the length of the holiday leave depends. Education periods are also included in the work record on which the length of the holiday leave is calculated. During a holiday leave, the employee is entitled to regular pay as if they were working. An employee cannot give up their right to holiday leave. Cash payment in lieu of unused holiday is possible but only in the case of a termination or the expiry of employment.
Sick Leave
Generally, employees on sick leave are entitled to sick pay in the amount specified by law, which is equal to 80% (or 100% in the case of pregnant employees, or sickness caused by an occupational accident) of their remuneration calculated in general on the basis of the salary received for the 12 consecutive months preceding the period of their incapacity to work.
In general, for the first 33 days of sick leave, the above-mentioned sick pay is paid by the employer, after which the payment obligation is taken over by the state (ie, the Social Security Office). In the case of absence from work due to sickness, the employee is obliged to notify their supervisor of their absence from work as soon as possible and no later than on the second day of absence, despite the fact that the sickness certificate is immediately uploaded to an online platform to which the employer has access.
Family-Friendly Rights
Parent employees are entitled to statutory leaves, including:
The payments during the above-mentioned leaves are paid by the state (ie, the Social Security Office) and are calculated in the same manner as sick pay, meaning they are based, in general, on the salary received for the 12 consecutive months preceding the period of incapacity to work.
Confidentiality
The employee's basic duties, as stipulated in the Labour Code, include:
However, there are no direct statutory regulations concerning the employee’s confidentiality duties in the post-employment period. Therefore, it is highly advisable to sign confidentiality agreements that would oblige the employee to keep their employer’s confidential information secret both during and after the termination of employment.
Liability Rules
The rules for employee liability for damage caused to their employer depend on whether the employee caused the damage intentionally or accidentally. If the damage sustained by the employer is caused by the employee accidentally as a result of the non-performance or undue performance of work duties, the employee’s liability is limited to the extent of the actual loss incurred by the employer. Moreover, the amount of damages cannot be more than three months’ salary. If the employee causes damage intentionally, they will be liable for the full amount of the damage.
If an employee causes damage to a third party in the performance of their employment duties, only the employer (not employee) is obliged to compensate for the damage.
PPK
A PPK is a mandatory additional long-term saving programme (co-funded by the employer, the employees, and partially by the state). The employer's compulsory minimum contribution rate is 1.5% of the employee’s remuneration. The enrolment into the pension plan is automatic for all employees of applicable age; however, employees have the right to opt out at any time. Failure to set up a PPK can result in fines imposed on the management board of the company amounting to up to 1.5% of the employer’s remuneration fund from the previous year.
Post-employment restrictive covenants can only apply to an employee who has access to particularly important information, the disclosure of which could expose the employer to damage. These clauses must be agreed in writing to be valid and must determine the time, place and scope of the non-compete undertaking. There is no statutory limit concerning the duration of a non-compete restriction, but typical post-termination bans last for three to 12 months. A non-compete will not be effective if it takes the form of an absolute ban on any activity in a particular industry; it must relate to an activity actually carried out by the entrepreneur (main or secondary) or planned (not a hypothetical possibility). Moreover, post-employment non-competition clauses must stipulate the amount of compensation payable to the employee for their compliance with the non-competition restriction. This compensation cannot be lower than 25% of the remuneration received by the employee prior to their termination of employment for the period equal to the period of the prohibition of competition. Compensation can be paid in monthly instalments.
If the employee violates a valid and enforceable non-compete clause, they become liable to pay damages to the employer. In practice, post-employment non-compete covenants are commonly combined with a contractual penalty that must be reasonable in relation to the employee’s compensation for the non-compete restriction. Furthermore, the employer can also be entitled to further damages if the damage caused by the employee exceeds the amount of the contractual penalty.
Important amendments to the Polish Labour Code were introduced in April 2023, according to which if there is no non-competition clause in an employment contract, an employer cannot prohibit their employee from working for another employer or entity.
Non-solicitation clauses with reference to clients and customers are allowed under Polish law. These non-solicitation clauses typically cover the term of employment and/or a defined period after their termination (usually one to three years). Unlike post-employment non-competition covenants, Polish law does not require the employer to pay the employee any compensation for non-solicitation in order to be considered enforceable. Non-solicitation clauses concerning customers in certain circumstances can be considered to be non-competition clauses that require compensation.
In general, the processing of personal data in the employment sphere is subject to the provisions of the Labour Code, which was amended after the entry into force of the General Data Protection Regulation (GDPR). Employers should also keep in mind other regulations contained in various legal acts, which stipulate, for example, the storage limitation periods of certain documents containing employees’ personal data.
GDPR
The GDPR sets forth the general rules that should be followed by employers that act as data controllers of their employees’ personal data. According to these rules, employers should, among other things:
The Labour Code
The Labour Code sets forth certain restrictions with respect to the processing of employees’ personal data. In particular, employers are allowed to:
In general, there are no special requirements needed to perform work in Poland applicable to an EU/EEA/Swiss citizen.
In order for all other foreigners to be allowed to legally work in Poland, the below-mentioned conditions need to be fulfilled:
There are several types of documents that allow for entry into the Polish labour market:
Temporary Protection for Ukrainian Citizens
Poland has taken a number of temporary measures to help Ukrainian citizens who have left their homeland as a result of Russian aggression. Ukrainian citizens, who have legally arrived in the territory of Poland since 24 February 2022 and have declared their intention to stay in Poland, have been granted an extended right to stay, work, and set up their own businesses within the territory of Poland. They will continue to enjoy legal residence and the right to work in Poland on the basis of their notification to the Labour Office up to 4 March 2024. In addition, this period has been extended for those pursuing compulsory or voluntary education within the territory of Poland or through means of remote learning provided from Ukraine until 31 August 2024, and for those retaking the Polish matriculation exam until 30 September 2024. An employer who entrusts work to a Ukrainian citizen is obliged to notify the Poviat Labour Office within 14 days from the date of their commencement of work. The notification must include information concerning the minimum working conditions for refugees and data on the employer’s workforce (ie, the number of employees employed under employment and/or civil law contracts) as of 23 February 2022 and the date of notification.
Please refer to 4.1 Limitations on Foreign Workers.
The new remote work law was introduced into the Polish Labour Code in April 2023. Under the new law, employers are entitled to introduce fully remote or hybrid work in their organisation. They can do this either by adopting the internal by-laws to be consulted with employees’ representatives, or by concluding individual employment contracts. Previously, introducing remote work resulting from a unilateral order from a firm was only limited to exceptional cases such as force majeure events.
Under the new remote law, the employer has to provide the remote employee with the materials and tools necessary in order to perform their work remotely, including the installation, servicing and maintenance of any technical equipment. Unlike during the COVID-19 pandemic, the employing entity also has to cover the costs of the energy and telecommunication services necessary in order to perform the work from home, as well as pay an equivalent sum for using private equipment for business purposes. All the payments to be made to the employee can be covered in the form of a lump sum paid either monthly or at other times.
Employers are also required to set the rules concerning data protection and the confidentiality of information, and the health and safety of remote workers, as well as to provide training sessions to employees when necessary.
Polish law does not provide for sabbatical leave. In order to take a long break from work, employees can apply for unpaid leave during which they are protected against dismissal as in the case of any justified absence. It is up to each employer to introduce internal rules on sabbatical leave, especially for long-serving employees.
There is a gradual decline in interest on the Polish market in using temporary workers in favour of an increase in the popularity of outsourcing. A likely reason for this situation is that the leasing of temporary workers through registered work agencies is rather formalised. As a result, employers look for more flexible forms of supplying work forces. However, it is important to keep in mind that outsourcing cannot take the form of “body leasing” meaning the leasing of employees, but should instead have the form of providing certain services which will be performed by workers employed by a service provider.
In addition, as a natural consequence of COVID-19, there is a tendency among businesses to reduce office space and the implementation of desk-sharing solutions either within the employer’s internal premises or within an office space offered by third-party providers.
Another significant development in Polish law, which occurred in February 2023, was the introduction of a new law concerning employee sobriety checks. Employers are entitled to carry out preventive checks for the presence of alcohol or substances similar to alcohol. In order to be able to use said checks, it is necessary to create internal rules on sobriety checks which can be added to the work regulations.
The right to establish and join a trade union is granted to employees, as well as civil law contractors. Establishing a trade union requires, among other things:
The trade union is obliged to notify the employer of the number of its members in the given entity twice a year (by 10 January and 10 July). There is no obligation to disclose the names of its members.
Trade unions, if present in a company, retain significant influence over the operations of the company; in particular, the employers are obliged:
Moreover, the trade unions can, under certain conditions, take strike action.
The creation of works councils is not obligatory in Poland; however, employers employing at least 50 employees are required to notify their employees that they are entitled to set up a works council. Works councils have consultation and information rights in matters concerning, among other things, changes in the employer’s economic situation or substantial changes in the work organisation and/or headcount.
Collective bargaining agreements (CBAs) can be concluded between the employer and the trade union (a single-establishment CBA), or between the employers՚ organisations and the intercompany trade unions (multi-establishment CBAs). The purpose of concluding a CBA is to agree on the comprehensive work conditions and terms of the employment relationship (eg, remuneration, additional benefits for employees, employment guarantees) and the mutual obligations of the parties. The terms of a CBA cannot be less favourable than the provisions of the Labour Code. A collective labour agreement directly affects the rights of employees covered by its provisions.
A CBA can be concluded for a definite or indefinite period. A CBA requires registration with the relevant register maintained by the competent state authority (the local labour inspector or the Ministry of Labour). The registration of a CBA is preceded by an examination of the legality of its provisions.
An employment contract can be terminated:
An employer’s statement on the termination of a fixed-term employment contract and a contract for an indefinite period of time upon notice, as well as a statement on the termination of an employment contract without notice, should be in writing (ie, it requires a handwritten signature or a qualified electronic signature in the meaning of EU and Polish law) and should stipulate the reasons for the termination. Furthermore, the employer’s statement concerning the termination should include information on the employee’s right to appeal to a labour court.
The reason for the termination must be valid, justifiable and real, but there is no legal definition or catalogue of the reasons justifying the termination of a contract. This means that dismissals can be justified for employee-related reasons (such as poor performance) or for employer-related reasons (eg, liquidation, internal reorganisation). The reason for the termination must be sufficiently clear for the employee to easily comprehend. The lack of any justified reason for termination is one of the grounds for an appeal against dismissal.
If an employee is protected by a trade union, the employer must inform the trade union of its intention to terminate the fixed-term employment contract or the employment contract for an indefinite period.
In general, Polish law does not distinguish between the procedure for performance-related dismissals or dismissals for economic and/or technical reasons. However, the procedures differ in the case of collective dismissal.
Collective Dismissals
Collective dismissals take place if the employer employs at least 20 employees and within a period of 30 days plans to dismiss at least:
Collective redundancies are made upon the employer’s initiative and are motivated by reasons not related to the employees (eg, a reduction in the workforce due to the employer’s financial situation).
The procedure for collective dismissals requires prior consultation with the trade unions (if there are any) or the employee representatives. No letters of dismissal can be handed out until after the consultation period has concluded. Moreover, the employer is required to notify the local labour office as to the outcome of any consultations with the employee representatives, as well as any planned redundancies.
Employees who are made redundant under a collective dismissal procedure are entitled to a severance payment, the amount of which varies between one and three months’ remuneration, depending on the employee’s total length of service with the employer. Severance pay is capped at the level of 15 times the statutory minimum salary in Poland. Severance pay is also due to employees who have been dismissed for non-employee-related reasons, even if the number of dismissed employees does not fall below the thresholds stipulated for collective dismissal, provided the employer employs at least 20 employees.
The period of notice depends on the type of employment contract and the length of service with the given employer. Notice periods can only be extended for the benefit of the employee.
The statutory notice periods are as follows.
For indefinite-term and fixed-term employment contracts, if the employee has been employed:
For probation contracts:
During the notice period, the employer can place the employee on gardening leave, and the employee will retain their right to remuneration during this time.
It is generally not possible to pay an employee compensation in lieu of notice. Only in cases of dismissal for non-employee-related reasons can the three-month notice period be shortened to one month in exchange for compensation.
During the notice period, the employee can be requested to use their entire holiday leave or be paid an equivalent for any unused holiday.
An immediate termination due to an employee’s fault (summary dismissal) can take place only if the employee:
Such termination is possible only within one month after learning about the circumstances justifying the immediate termination.
Under Polish law, an immediate termination by the employer is also possible in the case of a long-lasting incapacity to work due to illness (lasting longer than the joint period of receiving sick pay from the employer, statutory sickness benefit and rehabilitation benefit for the first three months).
Termination agreements are possible and are often the recommended way of terminating an employment relationship. In a termination agreement, the parties are free to determine the date of expiry of employment (ie, the notice periods do not apply), as well as agree on any other issues. The only restriction is that any waiver of the employee’s right to remuneration stipulated in such an agreement would not be valid. Termination agreements theoretically do not require a written form; however, from a practical point of view, it is recommended that they are executed in writing.
Under Polish law, certain employees enjoy special protection against dismissal, which means that their contracts of employment cannot be terminated upon notice. If notice is served, it will be effective; however, the employee would be able to challenge it in court.
The protection against dismissal specifically applies to:
The termination of a contract with trade union officers or members of works councils requires the permission of the management board of the relevant trade union organisation or works council. They are protected from dismissal not only during the term of their office, but also up to one year after this term ends.
An employee can challenge their dismissal in a labour court if there was no justified reason for the dismissal or if the dismissal is otherwise faulty and breaches the law. An appeal can generally be submitted within 21 days of the date of receipt of the termination letter.
Employees dismissed with or without notice, who have been employed for a fixed-term or for an indefinite period, can (i) demand that the court reinstate them to work, or (ii) claim damages.
The value of damages for wrongful dismissal is limited by law; for instance, in the case of indefinite-term contracts, it can be generally awarded up to the amount of three months’ remuneration, but, in the case of extended notice periods, the court can order damages corresponding to the extended notice period.
In the event of reinstatement to work, an employee would also be entitled to compensation for the loss of their remuneration during the term of being unemployed for up to three months. This limitation on the amount of compensation does not apply to certain categories of protected employees (eg, pregnant women, employees at pre-retirement age, or women on maternity leave) who are eligible for the aforementioned compensation for the entire period of their unemployment.
The courts are free to decide whether an employee will be reinstated to work or awarded damages, depending on their assessment of the circumstances of a given case, unless the employee is in a protected category. In long-lasting proceedings, the courts often decide that reinstatement to work is no longer possible.
Grounds for Anti-discrimination Claims
Under Polish law, employees have equal rights for performing the same duties and should be treated equally in terms of:
The list of grounds on which employers cannot differentiate between workers is open-ended and includes gender, age, disability, race, religion, nationality, political beliefs, trade union membership, ethnic origin, sexual orientation, employment for a definite or indefinite period, or employment on a full-time or part-time basis.
Burden of Proof
The employee should indicate in the court on what grounds they have been discriminated against and indicate the circumstances demonstrating that they have been treated unequally on those grounds. It is sufficient that the employee substantiates their allegations that direct or indirect discrimination has occurred; whereas the burden of proving that the discrimination did not take place will rest with the employer, who will be obliged to prove that the differentiation between the employees has been motivated by objective reasons.
Claims
An employee who has faced any form of discrimination, harassment or sexual harassment is entitled to claim compensation from the employer, which cannot be less than the minimum remuneration in Poland.
An employee can claim compensation for any damage suffered as a result of a breach of the principle of equal treatment, including the right to claim compensation for the difference in remuneration if it was too low as a result of the employer՚s discriminatory practices.
In addition, an employee has the possibility to terminate the employment contract with immediate effect due to a serious breach by the employer of its fundamental duties towards the employee. In this case, the employee will be entitled to compensation equal to the amount of remuneration corresponding to the notice period.
Court proceedings conducted via video were introduced during the COVID-19 pandemic. Despite the fact that the state of emergency on the territory of Poland was lifted as of July 2023, this possibility will be maintained for a further year, until July 2024. At the same time, an amendment to the Code of Civil Procedure is under way in parliament, which provides for the permanent introduction of the possibility to conduct hearings in civil cases, including employment disputes, by means of remote communication.
Labour disputes are typically resolved by the labour courts, which function within the Polish system of common courts. However, it is also possible to settle a dispute amicably with the help of a mediator (for such a settlement to be binding, it will need to be approved by the court).
The professional legal representation of a party in court is not mandatory in labour law-related litigation. The parties are free to choose whether they represent themselves or ask for representation before the court from a licensed lawyer.
In labour matters, the parties can only enter into an arbitration agreement after the dispute arises. Unlike other types of relations, in labour matters it is not possible to agree in the employment contract that disputes arising between the employer and employee will be settled by an arbitration court, and such a provision would be invalid.
Due to recent changes in the law, the employees have been released from court fees for claims brought against employers. The general rule is that procedural costs (court fees and costs for professional representation) are allocated in proportion to the outcome of the case. However, the costs for professional representation awarded by the court to the prevailing party typically do not correspond to the actual costs incurred but are determined based on statutory tariffs for employment matters. Any difference must be borne by the client.
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