All you need to know about employment contract termination

All you need to know about employment contract termination
Marek Cieślak

Marek Cieślak

CEO CGO Finance

Dynamic development of the job market conduces to decisions about job changing. How to initiate this change? One of the key steps is employment contract termination. What to take care of? We give you a piece of advice in the article below.

Table of Contents

Rules for effective employment contract termination

Termination of an employment contract is a unilateral statement of will by one of the parties to the employment relationship. It results in the termination of the contract at the end of the notice period. The Labor Code states that both employer and employee can terminate the contract.

The effectiveness of terminating the employment contract depends on meeting the following conditions:

  • Written form. The termination must be in writing, signed by the person making the statement,
  • Identification of the parties to the employment relationship, i.e., employer and employee,
  • Specification of the date of termination of the employment relationship,
  • Indication of the notice period. It depends on the type of contract and the employee’s length of service.

Failure to meet any of these conditions renders the termination ineffective. The employment relationship remains valid. Following the termination of the employment contract, the employer may release the employee from work duties until the end of the notice period. The employee retains the right to compensation during this period.

Notice Period for employment contract termination

The notice period for terminating the employment contract is the time during which the employment relationship continues despite the declaration of termination. The notice period, lasting a week or a month or its multiple, ends on a Saturday or on the last day of the month.

The notice period of the employment contract for a probationary period is:

  • 3 working days if the probationary period does not exceed 2 weeks,
  • 1 week if the probationary period is longer than 2 weeks,
  • 2 weeks if the probationary period is 3 months.

In employment contracts for an indefinite or specified time, the notice period depends on the length of employment:

  • 2 weeks – for an employee hired for less than 6 months,
  • 1 month – for an employee hired for at least 6 months,
  • 3 months – for an employee hired for at least 3 years.

As per the Labor Code, specified employment periods include previous employment, if changing employers followed certain conditions defined by law, like transferring a business to another employer or other specified cases.

After issuing a termination notice, either party has the right to agree on an earlier termination date. This arrangement, however, does not change the procedure for terminating the employment contract.

Employment contract termination by employee

The legislator grants employee the right to terminate the contract without notice if:

  • A medical certificate states the harmful effects of the job on the employee’s health. If the employer does not transfer him to another suitable position within the time specified in the medical certificate, the notice period does not apply.
  • The employer commits a serious breach of fundamental obligations towards the employee. In this case, the employee is entitled to compensation that equals remuneration for the notice period.

To be effective, the employee’s declaration of termination without notice must have written form. Moreover, it must provide reasons justifying the termination.

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Employment contract termination by employer without notice period

The Labor Code grants the employer the right to terminate the employment contract without notice due to the employee’s fault in cases of:

  • Serious breach of basic employee’s duties,
  • Committing a crime by the employee during the employment contract. This applies when the crime makes further employment in the current position impossible. It also applies if the crime is evident or confirmed by a final judgment.
  • Loss of qualifications necessary to perform work, due to the employee’s fault.

Terminating the employment contract without notice by the employer is time-limited. It cannot occur later than 1 month after the employer becomes aware of justifying circumstances. Terminating a contract without notice requires consulting the employee’s trade union representative. In case of objections to the justification of termination, the trade union expresses its opinion. It must be issued no later than within 3 days.

The employer can also terminate the employment contract without notice in following cases:

1. If the employee’s incapacity to work due to illness lasts longer than:

  • 3 months – if the employee was hired by the current employer for less than 6 months,
  • the total period of receiving remuneration, benefits and rehabilitation benefits for the first 3 months. It applies if the employee was hired by the current employer for at least 6 months. It also applies if the incapacity for work was caused by a work accident or occupational disease.

2. In the event of an employee’s justified absence from work for reasons other than those listed above, if they last longer than 1 month.

Termination of employment contract without notice does not apply when the employee’s absence is related to childcare. This also applies to absence resulting from contagious disease. The conditions of termination in such cases are specified by the Act.

If employee returns to work after the reason for absence stops, the employer cannot terminate the contract without notice.

Protection of Employment Relationship in employment contract termination

The law provides protection to the employee in the event of:

  • Unjustified or unlawful termination of the employment contract by the employer. The employee has the right to appeal the termination to the labour court. He can demand the decision on ineffectiveness of the termination. He can also demand the reinstatement to the previous conditions or compensation.
  • Unlawful termination by the employer of the employment contract without notice. The employee can claim reinstatement under previous conditions or compensation. The claim is submitted to the labour court.

In the case of unjustified termination of the employment contract without notice by the employee, the employer is also protected. The employer can file a compensation claim, and submit it to the labor court.

Employment contract termination – summary

Terminating an employment contract is a significant decision. It can have a substantial impact on the employee’s professional and personal life. This is why, it is crucial to ensure that it is in accordance with the law. This will guarantee the safety of both parties in the employment relationship.

If you find the above topic interesting and want to know more about it, do not hesitate to contact us. Our experts are ready to help you.

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Marek Cieślak

CEO CGO Finance