The use ofstateaid under the Anticrisis Shieldlawrestricts the employer's freedom to reduce headcount, but some employers may also implement less favourable terms of employment.
Poland has passed a law providing co-financing aid for employee salaries during the COVID-19 crisis. Employers who obtain aid under this ‘Anticrisis Shield' act may not terminate employment contracts during the co-financing period term. Hence, if an employer receives co-financing aid for three months (the maximum period), the protection period for employment contracts will last three months. This prohibition only applies to terminations for reasons beyond the employee's control; there are no obstacles to dismissing an employee during the protection period due to the employee's fault.
A breach of the termination rule will require a refund of the co-financing paid to the dismissed employee, plus possible legal action for compensation in labour court, up to three monthly salaries.
In order to obtain the above aid, the employer must conclude with the social party (either the trade union or the employees' representatives) an agreement on economic downtime with a simultaneous reduction of remuneration up to 50%, or an agreement on reduction of working time up to 20% (with a corresponding reduction of remuneration).
Agreements for less favourable terms
Funds granted under the Anticrisis Shield act are not the only way employers can reduce expenses. An agreement providing less favourable terms of employment is also possible, according to the labour code. This not only reduces expenses, but also makes it unnecessary to submit termination notices to the employees.
This option is available to any employer not covered by a collective bargaining agreement or employing less than 20 employees. It can be done when a new agreement is justified by the employer's financial standing. Note that there is no requirement to record a specific decline of revenue.
Any such agreement needs to be reached with the employees' representation, whether that is a trade union organisation or someone selected according to the procedure in place at the employer (if there is no trade union at the employer). The employer cannot introduce such changes unilaterally. The agreement must then be filed with the State Labour Inspection Service (PIP).
The agreement should contain specification of:
- the legal grounds;
- the length of time the agreement will be in force (up to 3 years);
- the terms to be changed to less favourable (though terms must still comply with labour code and other acts of law; for instance, salary cannot be reduced below minimum wage); and
- whether it applies to all employees or to selected groups (in the latter case, they need to be selected objectively).
Originally published 5 May, 2020
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