Individual redundancies for reasons not related to employees

The Act on Special Rules for Termination of Employment Relations with Employees for Reasons not Applicable to Employees does not regulate only the issue of collective redundancies. Apart from collective redundancies, the Act also regulates individual redundancy procedures, which are described in detail in Article 10 of the Act.

Individual redundancy happens when the following conditions are met, i.e.:

• The employer must have at least 20 employees;

• The cause justifying the termination of the employment relationship is attributable only to the employer or the termination by agreement of the parties instituted by the employer is the sole reason for termination,

• Redundancies at the employer’s within a period not exceeding 30 days cover a smaller number of employees than specified in Article 1 of the Act (i.e. 10 employees if it has fewer than 100 employees; 10% of employees if it has 100 or more employees, but less than 300 employees; or 30 employees if it has 300 or more employees).

Thus, the absence of the requisite employment of at least 20 employees by the employer means that Article 10 does not apply at all to such an employer. Besides, the individual redundancy procedure does not require the employer to terminate the employment contract with a certain number of employees. This means that the employer will be obliged to comply with the obligations indicated in the Act even if it terminates the contract with only one employee. The last requirement for an individual redundancy procedure is one with which the reason for dismissal cannot be attributable to the employee but solely to the employer. A reason not attributable to the employee must be the only cause of the lay-off. Thus, it will not be possible to apply an individual redundancy procedure where the termination of the employment relationship is due to the employee’s status or conduct. In such a case, the provisions of the Labour Code shall apply to the termination of the employment contract. Reasons not attributable to the employee which will justify the application of the individual redundancy procedure from the Act are primarily economic, organisational reasons related to the functioning of the employer due to e.g. the necessity to reduce employment for economic reasons, change of production profile, subject of activity, scope of the employer’s activity or ownership changes.

The following provisions of the Act shall apply to individual redundancies: Article 5(3) to (6) and Article 8. Thus, in the case of an individual redundancy procedure, the employer may terminate the employment relationship of an employee on leave lasting at least three months (not only holidays, but also unpaid leave, training or child care leave). However, it should be remembered that in accordance with Article 5(5) of the Act, this mechanism should be excluded in relation to maternity leave, leave on the terms of maternity leave, parental leave and paternity leave. Since the provision provides for the leave of at least three months, it seems well grounded that it is not permissible to terminate the employment relationship when the leave is less than three months (thus, employees taking shorter leave are protected). Moreover, the protection against termination of the employment relationship will also not apply to employees whose absence from work is justified if the period entitling the employer to terminate the employment contract without notice has already expired (this refers either to long-term illness – Article 53 § 1 item 1 of the Labour Code – or other justified absence lasting more than one month – Article 53 § 1 item 2 of the Labour Code).

On the other hand, a change in working conditions and/or pay in the mode of a change to less favourable ones may, pursuant to Article 5(4) of the Act in connection with Article 42 of the Labour Code, take place regardless of the duration of leave or other justified absence of the employee from work.

In the case of individual redundancies, it is also very important to apply the provision that entitles the employee to receive severance pay.

It is also worth noting that Articles 11 and 12 also apply to individual termination of employment (the restriction on applying the provisions of the Act to employees employed on the basis of appointments and the reference to the appropriate application of the Labour Code). Therefore, other regulations of the Act, apart from the ones mentioned above, do not apply to individual redundancies.

However, it should be remembered that due to the fact that in the case of an individual redundancy, the general consultation provided for in Article 2 of the Act does not apply, and the employer dismissing the employee pursuant to Article 10 must carry out individual consultations with a trade union representing the employee pursuant to the provisions of the Labour Code, i.e. pursuant to Article 38 of the Labour Code.

The provision governing dismissals with an individual redundancy procedure also covers in detail employees who are protected against dismissal with an individual redundancy procedure.

There are three categories of protected employees:

• Employees who cannot be dismissed on an individual basis by their employer (Article 10, section 5 of the Act) – this group includes Sejm deputies, senators and councillors (even the termination of work and pay conditions cannot be applied to this group);

• Employees for whom only termination of working conditions and pay is permitted (Article 10, section 1 in connection with Article 5, section 5 of the Act – we covered the issue of who is protected in case of collective redundancies and on the principles of compensatory allowance in case of termination of working conditions and pay here: http://kpr.pl/41,news/347,collective-redundancies-not-for-all.html);

• Employees who can be dismissed, however, on condition that the company’s trade union organisation does not object, or whose working conditions and/or pay can be changed if it is not possible to continue to employ them in their current position (Article 10, section 2 of the Act) – this group includes, among others, employees on child care leave if it lasts more than three months; juvenile employees during their employment contract for the purpose of their vocational training; or members of trade union founding committees.

If the company’s trade union organisation objected to the termination of an employment contract with a protected employee, the employer may terminate the employee’s working and/or pay conditions if, for the reasons not attributable to the employee, it is not possible to continue to employ the employee in its current position. In this case, it is obligatory to consult the trade unions pursuant to Article 38 of the Labour Code. If the termination of the working conditions and/or pay of a protected employee results in the reduction of remuneration, the employee is entitled to a compensatory allowance calculated according to the provisions of the Labour Code for a period not exceeding six months.

Marta Strzecha-Bociąga, attorney-at-law