Poland

    1.1 In what circumstances does the employee transfer law apply?

    The employee transfer law may apply when there is a transfer of an economic entity which retains its identity. ‘Economic identity’ means an organised grouping of resources which has the objective of pursuing an economic activity.

    Assessment must be made case-by-case, taking into account the type of establishments, whether assets are acquired, the value of the intangible assets at the time of the transfer, what happens to employees and clients and the degree of similarity between the activity before and after the transfer.

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    Author: Raczkowski Paruch

    Date: July 2016

    1.2 Does the employee transfer law apply to (a) a sale of a business or (b) outsourcing?

    (a) Sale of a business

    The transfer of an undertaking (or part thereof) occurs when a group of assets devoted to the conduct of business is taken over by another entity.

    It may be based on a sale, lease, rental, acquisition, merger, donation or other means. It may even occur where there is no legal basis for it at all, for example, where assets are taken without a contract.

    If only the capital control over an entity changes (e.g. through a sale of its shares), the law relating to the transfer of undertakings will not apply, as there is no change of employer.

    (b) Outsourcing

    Depending on circumstances, outsourcing may constitute a transfer of part of undertaking. This will depend on what functions are transferred and whether they are organised in such a way that they constitute part of an undertaking.

    If the outsourced activity is asset-intensive then a takeover of these assets is necessary for it to be considered as a transfer of undertaking.

    If the outsourced activity is labour intensive, then the takeover of the tasks comprising the outsourced activity may be considered sufficient for it to be considered to be a transfer.

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    Author: Raczkowski Paruch

    Date: July 2016

    1.3 In outline, what are the implications of the employee transfer law?

    The following points summarise the main impact of the employee transfer law:

    • Employees of the transferor automatically transfer to the transferee under the existing terms and conditions of their employment contracts.
    • Employees’ continuity of employment is preserved.
    • The transferee is obliged to comply with the internal regulations applied by the transferor in respect of the terms and conditions of remuneration of the transferring employees.
    • Where the entire undertaking is being transferred, the transferee becomes liable for all employment-related obligations.
    • Where only part of the undertaking is transferred, both undertakings will be jointly liable for employment-related obligations arising prior to the transfer, whilst the transferee becomes solely liable for any obligations arising after the transfer.
    • The transferee must comply with the provisions of collective agreement existing at the transferor.
    • Transfer-related information must be provided to any trade union, or where there is none, to the individual employees.
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    Author: Raczkowski Paruch

    Date: July 2016

    2.1 Who transfers?

    All ‘employees’ transfer automatically to the transferee, regardless of the type of their employment agreement. The protection therefore extends to ‘inactive’ employees, such as those on maternity leave. However, people who are in fact working for the employer but are formally employed by a different entity (e.g. temporary workers or secondees) do not transfer.

    Regarding the transfer of part of the undertaking, the provisions cover those whose workplaces are located within or related to the transferred part. There are two criteria which help when it is not clear whether an employee’s workplace is located within the transferred part: finding the ‘existence of links’ between the transferred part of the business and the relevant employee; and the ‘need for work’, i.e. whether the work is no longer needed by the transferor and is needed by the transferee.

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    Author: Raczkowski Paruch

    Date: July 2016

    2.2 Can employees object to transferring?

    Within two months of the transfer, a transferred employee may terminate his/her employment without notice, upon giving seven days’ ‘advance warning’. This is deemed to be a refusal to transfer.

    For the employee, termination of employment by the seven days’ advance warning has the same consequences as termination of employment upon notice by the employer. Most significantly, depending on the detailed circumstances of each case, the employee may claim the severance pay that would normally be due in the case of redundancy.

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    Author: Raczkowski Paruch

    Date: July 2016

    2.3 What happens to terms of employment contracts?

    As a result of the transfer, the transferee becomes a party to the employment contracts made by the transferor with the affected employees. The transferred employees will continue employment with the new employer on the same terms and conditions as applied with their previous employer.

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    Author: Raczkowski Paruch

    Date: July 2016

    2.4 What about other employee benefits?

    The transferee must comply not only with provisions contained in the employment contracts of the transferred employees but also with internal regulations relating to remuneration (such as collective bargaining agreements, remuneration regulations and bonus systems) in force at the transferor. The transferee will need to maintain these internal regulations and all benefits contained in them.

    Case law has not yet resolved what the transferee should do if it does not have the facilities to provide benefits made available by the former employer; but it should arguably provide something equivalent.

    Past employment with the transferor will count as continuous employment with the transferee.

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    Author: Raczkowski Paruch

    Date: July 2016

    2.5 What happens to pension rights?

    Although there is no established case law in this respect, in the case of the transfer of the whole undertaking it is likely that the transferee will be obliged to enter into the transferor’s pension obligations.

    If only part of the undertaking is transferred, the employees subject to the transfer may demand to be covered by the pension plan in force at the transferee. However, if the transferee did not have its own pension plan before transfer, the employees may claim damages or demand that a plan be introduced by the transferee.

    Note that private pension plans are very rare in Poland.

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    Author: Raczkowski Paruch

    Date: July 2016

    2.6 What liabilities transfer?

    The liabilities of the transferor and transferee differ according to the type of transfer. If it is a transfer of the entire undertaking, the transferee becomes liable to employees for all employment-related obligations, whether they arose before or after the transfer. The transferor is then no longer liable for any such claims.

    If the transfer concerns only part of the undertaking, the transferee becomes liable to employees for employment-related obligations arising after transfer and the transferor will have no liability for any such claims. However, on partial transfer, both the transferee and transferor will be jointly and severally liable for the obligations arising prior to the transfer.

    The above rules apply to all employment-related obligations (e.g. claims for unpaid remuneration and outstanding vacation leave). They also apply to the employer’s liability for contributions for employee’s social security.

    No criminal liability is transferred. However, the transferee may bear its own criminal liability, for example if social security charges or tax advances are not paid on time. If the delay is prolonged after the transfer, the liability may concern the period after the transfer.

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    Author: Raczkowski Paruch

    Date: July 2016

    2.7 Do collective agreements transfer?

    A collective bargaining agreement will not transfer itself. However, following the transfer the transferee must observe the provisions of the relevant collective agreements with respect to the transferred employees. There are certain limitations to this, as follows:

    • the transferee is only obliged to observe the terms of a collective bargaining agreement for one year following the transfer;
    • provisions of a collective agreement apply as at the date of the transfer of undertaking (or part of one), i.e. amendments to the transferor’s collective bargaining agreement made after the transfer do not concern the transferee;
    • after one year of mandatory application, the transferee is not automatically released from applying the collective agreement. However, in order to stop applying it, the transferee must either follow a procedure (the so-called ‘notice of alteration of terms of employment’) with respect to each transferred employee; or conclude individual agreements with them by amending their terms of employment.
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    Author: Raczkowski Paruch

    Date: July 2016

    2.8 How does the transferee obtain information on transferring employees?

    There are no mandatory requirements on the transferor to inform the transferee about the transferred employees. However, often the parties will consider together the structure of the transferred business to work out which employees transfer.

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    Author: Raczkowski Paruch

    Date: July 2016

    3.1 Can employers make changes to employment contracts?

    A transfer cannot be used to justify amendments to the terms of employees’ contracts. The employer must be able to show a specific, different reason for changing terms. Nor can the terms be harmonised following a transfer.

    If a collective bargaining agreement of the transferor applies, the new terms cannot be worse for the employee than that agreement specifies. Nor can they be worse than those guaranteed by the transferee’s internal regulations. If the employee is coerced into signing a ‘mutual’ agreement, employee may withdraw from it within one year from when he or she ceased to fear the consequences of refusing to sign.

    If an employer (the transferor prior to transfer and the transferee following transfer) intends to change the terms of employment contracts, it must either agree the amendments with individual employees, or follow a procedure of ‘notice of alteration of terms of employment’.

    In order for changes to the employment conditions not to be considered as made because of the transfer, there must be a separate, genuine reason for them. Any necessary restructuring resulting from, for example, the doubling up of jobs should be considered as a neutral factor. Thus, changes may be made – including changes detrimental to the employee - as long as the transfer is not the reason for them. The burden of proving the reason lies with the employer. In practice, the smaller the time between the transfer and the changes, the harder it is for the employer to prove they were not caused by the transfer.

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    Author: Raczkowski Paruch

    Date: July 2016

    3.2 When can employers safely dismiss employees before or after a transfer?

    Under employee transfer law, a transfer itself may not constitute the reason for the dismissal of an employee, and this applies to both the transferor and the transferee. The rule applies not only to unilateral terminations by the employer, but also to mutual agreements on termination of employment.

    The time-gap between transfer and the dismissal is theoretically irrelevant, however, in practice it is a factor which will be taken into consideration by court when assessing the actual reason for dismissal.

    In every case the employer should analyse whether the transfer is actual reason for the contemplated dismissal. Generally, it is more likely that the transfer does not constitute the reason for the dismissal if the dismissals are effected after the transfer, but it is still not possible to say there is a ‘safe time’ following the transfer, after which dismissals may be effected.

    As regards compensation in case of dismissal, there are no special rules regarding dismissals motivated by transfer (transfer cannot be the reason of dismissal). Under the general rules, an employee dismissed for economic reasons has the right to a severance payment equal to one to three months’ salary, depending on the employment record, but no more than the statutory cap (PLN 27,750 in 2016, approximately EUR 6,607). The rules on severance pay only apply to employers employing at least 20 employees.

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    Author: Raczkowski Paruch

    Date: July 2016

    4.1 Who must employers consult?

    If there are trade unions at the transferor and/or transferee, they must be informed of the transfer and provided with transfer-related information. If the transferor or the transferee intend to take ‘measures related to employment’, a consultation procedure must be conducted with the trade unions.

    If no trade unions, information on the transfer should be provided in writing to each individual employee, including those unaffected by the transfer, but no consultation is required.

    Prior consultation must take place with the works council, if one exists.

    The transfer may be subject to EU information and consultation procedures if a European Works Council is involved.

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    Author: Raczkowski Paruch

    Date: July 2016

    4.2	What information must they provide?

    Upon transfer, the trade unions or (if none) the employees should be informed of:

    • the intended date of the transfer;
    • the reasons for it;
    • the legal, economic and social consequences of the transfer;
    • any proposed measures concerning conditions of employment.

    The unions may ask questions and request additional information. The transferor/transferee should respond to the questions and provide additional information ‘to the extent necessary for the union to pursue its activity.’

    There are no specific rules on what information must be provided to works councils, though it must be sufficient to enable them to issue an opinion on the transfer.

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    Author: Raczkowski Paruch

    Date: July 2016

    4.3	What does consultation involve?

    A consultation procedure should be performed with any trade union(s) operating within an undertaking, but only if the transferor or the transferee intends to take ‘measures related to employment’ in the context of the transfer. If so, the parties should commence negotiations ‘with a view to reaching an agreement’.

    The transferor or transferee must also conduct consultations with the works council. This involves: delivery of information to the works council; the issue of its opinion; a meeting to answer questions and the conclusion of an agreement (or if not possible, a response by the employer to the issues raised).

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    Author: Raczkowski Paruch

    Date: July 2016

    4.4	How long does consultation last?

    The consultation procedure for works councils is complicated and has no regulatory time limits.

    The information must be provided to trade unions (or if none, individual employees) 30 days before the anticipated date of transfer. The consultation procedure must last at least 30 days. If agreement is not reached within this period, the employer may take the intended action.

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    Author: Raczkowski Paruch

    Date: July 2016

    4.5	What happens if an employer fails properly to inform or consult?

    There are no specific sanctions for breach of information requirements to employees. An employee may only sue the employer for damages on a general basis and will be obliged to prove harm suffered as a consequence of the employer’s failure to comply with its obligations.

    However, failure to comply with the information and consultation procedure with the trade union or works council may be the subject of criminal sanctions (fines or restriction of freedom for up to two years. However, in practice such sanctions are very rarely imposed).

    Crucially, breach of any information or consultation obligations does not invalidate the transfer.

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    Author: Raczkowski Paruch

    Date: July 2016

    5.1	Identify up to three issues in this country of which employers should be aware?

    There is no established case law on the scope of the prohibition on terminating employment relations or whether employees’ terms and conditions may be validly altered in the context of a transfer. Therefore, employer should be careful when planning the dismissal of employees during a transfer. The smaller the time-gap between dismissal and transfer, the harder it is for the employer to prove the reason for dismissal was not the transfer.

    Where it is unclear whether an employee is subject to transfer, the employee may bring a claim. The employee may also claim for remuneration from the date of the transfer against the undertaking the employee believes to be his or her employer following the transfer.

    The transferor and transferee share liability for unpaid social security and unpaid personal income tax, which must be paid before the transfer.

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    Author: Raczkowski Paruch

    Date: July 2016

    5.2	Would the employee transfer law apply on a cross-border transfer into or out of this country?

    In the case of transfer out of Poland, the employment of Polish citizens by a foreign company creates practical complications in the discharge of the relevant tax and social security obligations under Polish law. This either requires the foreign employer to register in Poland as a payer of social security dues which are normally payable in Poland by the employer, or forces local employees to agree to take over the responsibility for calculating and remitting the contributions themselves.

    In cases of transfers into Poland, when a Polish company takes over foreign employees, the Polish company will apply Polish law with respect to the transfer procedure (e.g. notification and consultation requirements).

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    Author: Raczkowski Paruch

    Date: July 2016

    6.1	What are the main national laws protecting employees upon transfers of businesses?

    Article 231 and Article 2418 of the Polish Labour Code and Article 26 of the Law on Trade Unions (implementing Directive 2001/23/EC).

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    Author: Raczkowski Paruch

    Date: July 2016

     

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