Does the difficult financial situation of the employer caused by the development of the coronavirus epidemic entitle the employer to terminate employment contracts of his employees? How to carry out layoffs due to the current economic situation?
The answer to the above questions depends on the types of employment contracts concluded with employees, the number of employees and the situation of a specific case.

Fixed-term employment contracts:

Under the provisions of the Act of 26 June 1974, the Labor Code (consolidated text Journal of Laws of 2020, item 1320) (hereinafter referred to as the “Labor Code”), the termination of fixed-term employment contracts does not require to indicate the reasons for the termination by the employer in the content of the written statement submitted to the employee. As a consequence, the employer may terminate the employment relationship with employees working under a fixed-term contract in a relatively quick and simple way, however, remembering to respect the applicable notice of termination periods and other formal requirements (written form of notice, instruction on the right to appeal to the labour court).

As a reminder at this point, it is worth to indicate that regardless of the type of contract concluded (fixed-term or indefinite period), the term of its notice of termination depends on the period of employment and amounts to:
– 2 weeks, if the employee is employed for less than 6 months,
– 1 month, if the employee is employed for at least 6 months,
– 3 months, if the employee is employed for at least 3 years.

Employment contracts for an indefinite period:

The situation regarding the termination of employment contracts with employees employed under an employment contract for an indefinite period looks completely different than in the case of fixed-term contracts. In this case, the provisions of the Labor Code indicate the conditions for terminating this type of employment contract. According to Art. 30 par. 4 of the Labor Code, the employer’s declaration on the termination of an employment contract concluded for an indefinite period should indicate the reason justifying the termination of the employment contract. Moreover, according to affirmed court cases, this reason must be true, concrete and real. Providing the employee with a properly formulated reason for termination is very important for the employee’s claims before the labour court. Additionally, if there are trade unions in the workplace, the employer is obliged, apart from fulfilling the other formal conditions accompanying the termination of employment contracts, to consult the termination with the trade union organization representing the employee.

Can the economic situation of the employer caused by the outbreak of the epidemic constitute a real, specific and real reason for the termination of an employment contract?
Of course, the mere fact of an epidemic in the territory of the country does not create the right for the employer to reduce the workforce automatically. If, however, as a result of a decrease in turnover, deterioration of the economic situation of a given workplace due to the consequences of the epidemic, there is a need to revise the employment status and actual liquidation of some jobs, then the employer will be able to take steps to reduce the workforce.

However, you should remember a few rules:

1. The liquidation of a given job must result from the actual impact of the SARS-CoV-2 coronavirus epidemic on the employer’s plant and manifest itself in a decrease in income;
2. A given job must stop functioning in the organizational structure;
3. When deciding to liquidate one of the same numbers of positions, the employer must remember to maintain objective criteria for selecting employees to be dismissed, taking into account, in particular, seniority, professional experience, or employee education. The employee must know both the reason for the dismissal and the criteria used to select the dismissal. The criteria used should be referred to in the content of the termination of the employment contract;
4. If there are trade unions at the employer, they should be consulted on termination (applies to contracts concluded for a fixed-term period);
Employer, remember that the reason given in the notification of the trade union organization should be the same as that on the notice of termination of the employment contract given to the employee.
5. As a rule, the employer cannot terminate the contract of an employee who is entitled to pre-retirement protection and during his justified absence, e.g. during a vacation;
6. If the employer employs at least 20 employees, he must remember about the regulations contained in the Act of 13 March 2003 on special rules for terminating employment relationships with employees for reasons not related to employees (consolidated text Journal of Laws of 2018, item 1969 as amended d.), e.g. in the scope of severance pay due to employees, if the economic reason was the only reason why the employer decided to terminate the employment contract (no co-cause on the part of the employee occurred).
7. If the employer employs fewer than 20 employees, he is bound by the regulations of the Labor Code.

Other solutions

Agreement of the parties:

The agreement of the parties plays a unique role among the methods of terminating a given employment relationship. There is a form provided directly in the provision of art. 30 par. 1 point 1 of the Labor Code and is the only amicable way to terminate the employment relationship. The agreement is the consistent statement of the parties to the employment relationship who seek to terminate the employment contract. The main feature of this method is its transparency and conflict-free nature. The employer and the employee jointly decide on the method and the very fact of terminating their employment contracts. Concluding an agreement on the termination of an employment contract does not require any particular form; however, to eliminate the possibility of questioning the concluded agreements, it is recommended to keep the written form.

Notice of termination amending the contract of employment:

During the reorganization of the organizational structure in the workplace, it may be necessary to offer the employee a different position. Of course, in this case, it is worth using the institution of mutual consent of the parties in this regard. However, it will not always be possible. Then helpful is, specified in Art. 42 of the Labor Code, a notice of termination amending the contract of employment. In its content and formal requirements, it is similar to a definitive statement.

Remember to:

1. Providing the employee with the reason for the notice of termination amending the contract of employment
2. Providing the employee with new working/pay conditions
3. Conducting a trade union consultation (if the employee is employed under a contract for an indefinite period and is represented by a trade union organization)
4. Indication in the content of the document that in the event of the employee refusing to accept the proposed working or pay conditions, the employment contract will terminate upon the expiry of the notice period. If the employee does not submit a declaration of refusal to accept the proposed conditions before the lapse of half of the notice period, it is considered that the employee has agreed to these conditions.
5. If the amending notice submitted by the employer does not contain the instruction referred to in point 4 above, the employee will be entitled until the end of the notice period to submit a declaration of refusal to accept the proposed conditions.
6. Termination of the current working conditions or remuneration is not required in the case of entrusting the employee, in cases justified by the employer’s needs, with work other than that specified in the employment contract for a period not exceeding 3 months in a calendar year, if this does not result in a reduction in remuneration and corresponds to the employee’s qualifications.

Employers using the so-called of the anti-crisis shield, they should also remember that under Art. 15 gg of paragraph 8 of the Act of 2 March 2020 on special solutions related to the prevention, prevention and combating of COVID-19, other infectious diseases and emergencies caused by them (consolidated text Journal of Laws of 2020, item 374 as amended) an entity that received a salary subsidy cannot terminate an employment contract for reasons not related to the employee during the period of receiving benefits for a salary subsidy. Violation of the above regulation may result in the necessity to return the amount incorrectly spent.