While the Polish labour law provides no special
regulations regarding termination of employment relationship with such employees as management
board members, in practice there are ways that,
given the special nature of such employment, are
safer and less likely to result in the employee
lodging an appeal with a labour court.
One of the prerequisites for any termination of an
employment contract concluded for an indefinite
term is to provide the reasons for termination. The
range of reasons for termination of an employment
relationship with a management board member is
vast. Just like with any other employee, also in the
case
of
a
management
board
member
unsatisfactory performance of his or her
responsibilities can serve as a reason for
termination of an employment contract, providing
that sufficient details are offered. Consequently, it
is permissible to terminate an employment
relationship for example on the grounds of the
management board member being notoriously late.
However, the employee is always entitled to appeal
against the notice of termination to the labour
court, meaning that it is worthwhile for the
employer to provide such reasons for termination
that would be most difficult for the employee to
challenge.
A special feature of the employment relationship
between a management board member and the
company is its close affinity with the corporate
relationship that also links the member with the
company. This specificity makes cessation of the
corporate relationship hard to dismiss as the reason
for termination of the employment relationship.
The Supreme Court case-law is consistent in that
the dismissal of a management board member from
his or her position provides sufficient reason for
termination of the employment contract. Since the
authority to manage the company is no longer
there, it is not possible to engage in performing the
responsibilities of an employee.
It must be borne in mind that for the dismissal to
be effective, it must be effected by a corporate
body that has the authority to do so. A management
board member can be always dismissed by
resolution of shareholders, but to confer that power
upon for example the supervisory board requires a
special provision in the articles of association.
Equally important is the representation of the
company at termination of the employment
contract with a management board member. While
in an agreement between the company and a
management board member, the former is
represented by the supervisory board or by an
attorney-in-fact appointed for that purpose, it
needs bearing in mind that after the resolution to dismiss a management board member is adopted,
he or she forfeits the corporate status, and as a
result
the
general
regime
of
company
representation is reinstated. So the contract of
employment should in principle be terminated by
the management board. However, in exceptional
circumstances the termination can be also effected
by the supervisory board. It is the established
Supreme Court case-law that a resolution to
terminate the employment relationship with a
management board member can be adopted by the
supervisory board as long as it occurs concurrently
with the dismissal of the management board
member from his or her corporate position.
Dismissal of a management board member provides
unusually robust reason for termination of an
employment relationship that is highly unlikely to
be successfully challenged. However, to achieve
that waterproof effect, it is necessary to comply
with all the formal requirements.
MILLER, CANFIELD,
W. BABICKI, A. CHEŁCHOWSKI I WSPÓLNICY SP.K.
ul. Batorego 28-32
81-366 Gdynia
Tel. +48 58 782-0050
Fax +48 58 782-0060
gdynia@pl.millercanfield.com
ul. Nowogrodzka 11
00-513 Warszawa
Tel. +48 22 447-4300
Fax +48 22 447-4301
warszawa@pl.millercanfield.com
ul. Skarbowców 23a
53-125 Wrocław
Tel. +48 71 780-3100
Fax +48 71 780-3101
wroclaw@pl.millercanfield.com
Disclaimer: This publication has been prepared for clients and professional associates of Miller Canfield. It is intended to provide only a summary of
certain recent legal developments of selected areas of law. For this reason the information contained in this publication should not form the basis of any
decision as to a particular course of action; nor should it be relied on as legal advice or regarded as a substitute for detailed advice in individual cases.
The services of a competent professional adviser should be obtained in each instance so that the applicability of the relevant legislation or other legal
development to the particular facts can be verified.