While Polish labour law provides no special regulations regarding the termination of employment relationships 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 always be 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 also be 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 an 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.