Poland: Legal Amendments to Fixed-Term Employment Contracts – New Challenges for Employers

On 22 February 2016 the rules governing the employment of fixed-term employees will be amended. The changes concern the duration of employment contracts as well as applicable notice periods. The purpose of the amendments is to restrict fixed-term employment, and in particular to counteract a current practice by employers to conclude long-term contracts for specified periods of time with the right to termination of the employment with a very short notice period of two weeks.

Total duration of fixed-term employment contracts

Starting from 22 February 2016, the total employment period according to both, one single, or several consecutive, fixed-term employment contract(s) between the same employer and the same employee in essentially the same work relationship cannot exceed 33 months (previously there was no such limit).

The employer will not be able to conclude more than three contracts with the same employee, irrespective of the intervals between the contracts. The fourth consecutive fixed-term contract will, by law, be considered an indefinite employment contract. Similarly one or more fixed-term contracts concluded for a period exceeding 33 months will be converted into an indefinite contract as of the 34^th month.

These rules do not apply if an employer has objective reasons for an extension of a fixed-term agreement for longer than 33 months. Since such objective reasons are not defined by law, reference to case law is required in order to justify such extension. An employer, who wishes to hire an employee for a fixed term beyond the permissible limits, must indicate the reasons for doing so in the employment contract. Moreover, the employer is obliged to inform the National Labour Inspectorate (Państwowa Inspekcja Pracy, PIP) (“NLI”) about hiring an employee for a period longer than 33 months within five days of the conclusion of such employment contract.

Neither the limit of the total number of contracts nor the 33-month time limit apply to fixed-term employment contracts established (i) for the purpose of replacing an employee during his or her justified absence from work, eg, during childcare; (ii) in order to perform casual or seasonal work; or (iii) to perform work for the time of one’s term of office (eg, as a member of a management board).

Notice period for fixed-term contracts

The notice period for contracts concluded for a defined period of time has now been aligned with the notice period for contracts concluded for an indefinite period, and depends on the aggregate period of service for a given employer.

Therefore, a fixed-term contract may now be terminated with the following notice:

(i) two weeks – if the employee was employed for less than six months;

(ii) one month – if the employee was employed for at least six months; and

(iii) three months – if the employee was employed for at least three years.

There will be no obligation to introduce termination clauses into fixed-term contracts, as was previously the case. Currently, fixed-term contracts are, as a rule, non-terminable, unless the parties introduced the termination clause into the contracts concluded for a period of longer than six months. The amendments abolish this requirement and make all fixed-term contracts terminable upon the notice periods specified in the act.

There is still no obligation to indicate the reason for termination in fixed-term contracts, and thus the court should not examine the grounds for such termination.

Transitional regulations

The application of notice periods

The following transitional rules apply to fixed-term contracts running on the date the new provisions enter into force, ie, 22 February 2016:

(i) employment contracts will remain in effect until their intended day of conclusion, unless they contain a termination clause;

(ii) two-week notice periods introduced into a contract cease to have effect, and the new notice period will depend on the period of employment with the given employer, calculated from 22 February 2016.

The notice period for fixed-term contracts concluded after the new provisions enter into force will depend on the period of employment with a given employer. To establish the notice period, the entire employment period with a given employer (before and after 22 February 2016) should be taken into account, irrespective of the intervals between the previous agreements.

Determining the number of contracts

The new provisions will not “zero” the number of fixed-term contracts concluded prior to 22 February 2016, which means that if on 22 February 2016 an employee is already employed on the basis of a second employment contract, the employer will be able to enter into only one more fixed-term contract with this employee.

Sanctions

From now on, employers can expect a strengthened and more stringent review and inspection process to be carried out by the National Labour Inspectorate’s inspectors. The inspectors will check and verify whether employers conclude fixed-term contracts for a period exceeding 33 months, the indicated reasons for concluding such agreements, as well as whether the obligation to notify the NLI was observed. Violation of these provisions committed by an employer constitutes an offence, for which the inspector may impose a fine of between EUR 250 and EUR 7,500.

The amendment to the Polish Labour code significantly changes the provisions of fixed-term contracts. Notwithstanding the intervals between contracts, an employer cannot enter into more than three consecutive fixed-term contracts with the same employee, and the total duration of fixed-term employment, in general, may not exceed 33 months. The notice period for fixed-term contracts has been aligned with the notice period for contracts concluded for an indefinite period of time.

author: Barbara Jóźwik