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NEW RULES FOR EMPLOYMENT CONTRACTS

A major amendment concerning employment contracts made to the provisions of the Labour Code is scheduled to come into effect on 22 February 2016. The key modification is to restrict the number of employment contract types to three (instead of four as it is now). Namely, the new wording of Art. 25 of the Labour Code introduced under the amendment act provides for the following types of contracts: an employment contract for an indefinite term, a contract for a definite term, and a trial period contract. As we can see, the legislators have eliminated a temporary employment contract for the duration of a specific job (umowa na czas wykonywania określonej pracy).

Furthermore, the amendment act defines in greater detail the rules for concluding trial period employment contracts. Art. 25 § 2 of the Labour Code in its wording to come into effect on 22 February 2016 expressly stipulates that contracts of this type are entered into for the purpose of testing an employee’s qualifications and ascertaining their possible engagement to perform a specific type of work. In principle, such contracts may be concluded only once. However, if an employee were to be hired again to perform another type of work, such new engagement could also be preceded by the conclusion of another employment contract for a trial period. Following the trial period, which must not exceed three months, a definite term contract or a contract for an indefinite term may be entered into. The option of concluding a trial period contract is also available if there has been a three-year interruption in employment with the employer in question.

Major changes will also be made to the provisions regulating the conclusion of definite term contracts. The maximum duration of employment contracts for a definite term is to be 33 months. Likewise, the combined time of employment under several definite term contracts must be no longer than 33 months, with the number of consecutive contracts being limited to three. In the event that at least one of these limits is exceeded, the employment contract for a definite term is automatically transformed into an indefinite term contract. If during the term of an employment contract for a definite term it is agreed to extend the time of performing work, this will be tantamount to the conclusion of a new (consecutive) definite term contract.

The above-described limits restricting employment under definite term contracts will not apply to any contract entered into: (1) with the purpose of providing replacement for employees during justified absence from work, (2) for performing work of a temporary or seasonal nature, (3) for performing work during a term of office, (4) for objective reasons on the employer’s side that have been indicated by the latter. However, these exceptions will only be allowed if the conclusion of a contract in a specific case meets real needs of a temporary nature and to the extent necessary in the light of all the circumstances of making such a contract. In such cases, the employment contract must include the reasons providing objective justification for its conclusion. Furthermore, when a definite term employment contract indicating objective reasons for it on the employer’s side is entered into (point (4) above), the employer will be required to notify it to the competent Regional Labour Officer. Failure to comply with this obligation will be deemed an offence against employee rights and be penalised with a fine of PLN 1000 up to PLN 30000.

The amendment act also modifies the rules for terminating employment contracts. As from its effective date, consistent periods of notice will apply to both indefinite and definite term contracts, with the length contingent on the period of employment at the particular employer. These periods of notice are 2 weeks for 6 months of employment or shorter; 1 month for at least 6 months of employment; and 3 months for at least 3 years of employment.

Finally, it is worthwhile to draw attention to transitional provisions. The current regulations will continue to apply to employment contracts for a definite term that remain in effect on the date of entry into force of the amendment act but have been terminated prior to that date. The permissible termination of definite term employment contracts that are continuing on the effective date of the amendment will be subject to the existing provisions if such contracts were concluded for periods of up to 6 months or for more than six months in the case that such contracts do not provide for termination with a 2-week period of notice. As regards termination of definite term employment contracts concluded for more than 6 months, which provide for termination with a 2-weeks’ notice period and remain in force as of the effective date of the amendment act, the applicable periods of notice will depend on the period of employment at the relevant employer (as defined in Art. 36 § 1 of the Labour Code in the amended wording). For specific term contracts, the limits stipulated in the amendment act regarding their acceptable duration (33 months) and permissible number (3 contracts) will apply. However, only the length of service since the entry into force of the amendment act will be taken into account in the calculation of these limits. A definite term contract that is continuing as of the amendment effective date will be considered as the first or second contract within the meaning of Art. 251 in its current wording. A contract of employment for a definite term that is concluded as from the effective date of the amendment act, but within one month from the date of notice for the second contract as defined in Art. 251 of the Labour Code in its current wording, is deemed an employment contract for an indefinite term if such period of notice started either before or on the date of entry into force of the amendment.