BackTypes of employment contracts in Poland
In order for a job to be legal, an employment contract must be signed before it starts. There are several such forms in Poland, each with its own characteristics. What are the types of employment contracts in Poland? What are the other forms of employment? What if the contract is terminated?
Basic form of employment
Forms of employment are the different types of contracts that create a relationship between a company and the person performing paid work for it. There are 2 types of forms of employment:
- employee forms of employment – these only include forms of employment that have an employment relationship. This is, for example, the employment contract. These are the only contracts regulated by the Labour Code.
- non-employee forms of employment – these include all civil law contracts which are regulated under the Civil Code. They are not covered by the provisions of the Labour Code. These include e.g. contract of mandate or contract to perform a specific task.
Types of employment contracts in Poland
The provisions of Polish law allow for cooperation between parties by means of various forms of employment contracts. Contracts can be classified on the basis of the legal framework defined by:
- Labour Code – e.g. employment contract for a trial period, employment contract for a fixed period, employment contract for an indefinite period
- Civil Code – e.g. contract of mandate, contract for specific work
- Business law – B2B contract
Employment contract
The employment contract is the most basic form of employment, which has several types of its own. It is characterised by fixed working and pay conditions, which are regulated by the Labour Code. An employee employed under an employment contract is guaranteed rights to remuneration, annual leave, sick leave and protection against unjustified dismissal.
There are three main types of employment contracts: an indefinite-term contract, which provides the greatest stability of employment; a fixed-term contract, which has a predetermined end date; and a probationary contract, which allows the employer to assess the employee’s skills before deciding on longer employment.
According to Polish law, the terms ’employee’ and ’employer’ refer only to natural and legal persons who are employed or hired and have an employment relationship. For example, a person employed on the basis of a contract of mandate should not be called an employee, nor should the employing person be called an employer. In this case, it is the contractor and the principal.
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Probationary contract
This is a type of employment contract that is set for a specific period of time. It is usually one or three months (the maximum duration of the contract). It is meant to be a kind of test for the two parties to the contract as to whether they will want to continue further cooperation. The contract can be terminated by both the employer and the employee, but this must be done with a period of notice. It is dependent on the time worked. The notice period is:
- 3 days – if the contract has lasted less than 2 weeks,
- 1 week – if the contract is longer than 2 weeks but shorter than 3 months,
- 2 weeks – if the contract has lasted 3 months,
- without a notice period – in certain cases defined by the Labour Code.
It is possible to repeat the probationary period for the same employee, but he or she must be recruited to a different position.
Fixed-term contract
A fixed-term contract, as the name sounds, is signed for a specific duration. It can be concluded for a maximum of 33 months. There is also a limit on the number of contracts. Only three such fixed-term employment contracts can be concluded with one employer. Once this number is exceeded, the contract automatically becomes an open-ended contract and the employer must enter into one. As we described earlier, the contract can be terminated by two parties, but it will be with a notice period of:
- 2 weeks – for employment of less than 6 months,
- 1 month – for employment equal to or longer than 6 months but less than 3 years,
- 3 months – if employment lasts for at least 3 years,
- without a notice period – in special cases, which are described in the Labour Code.
Contract for an indefinite period of time
An employment contract for an indefinite period is a special type of contract that is concluded indefinitely. Most often it is this type of contract that is considered stable employment, providing a guarantee of permanent work and opportunities for further development within the company. It is the most desirable form of employment contract and offers many advantages to both the employee and the employer. Notice of termination can be given by both parties at any time, but there is a notice period depending on the length of employment. In this case these are:
- 2 weeks – for employment of less than 6 months,
- 1 month – if the employment is equal to or longer than 6 months but still less than 3 years,
- 3 months – for employment of at least 3 years,
- without a notice period – only in certain cases, which are defined by the Labour Code.
Substitute employment contract
This is a special type of contract that can be called a sub-type of fixed-term employment contract. It has not been ring-fenced by legislation, but is still in operation. The establishment of the employment relationship happens for a specific period of time and the contract itself is concluded for the duration of illness, holiday or other excused absence of the employee being replaced. The employee hired must perform the same type of work as the previous employee. It differs from a fixed-term contract in that there is no limit of a maximum of 33 months. It can therefore be signed for a much longer period of time.
Either party to the contract can terminate it, but with a notice period of:
- 2 weeks – when the employment has lasted less than 6 months,
- 1 month – when the employment lasts for 6 months or more but still less than 3 years,
- 3 months – for employment lasting at least 3 years,
- without a notice period – only in certain cases described in the Labour Code.
Contract of mandate
Contract of mandate is the most popular type of civil law contract. Its provisions are governed by the Civil Code and not, as in the case of an employment contract, by the Labour Code. It is characterised by greater flexibility. The contract is concluded between the contractor and the principal. The contractor undertakes to perform the activities specified in the contract until a specific date. It can be a paid or unpaid contract, but usually the latter option is quite rare. Depending on what is written in the contract, the working conditions may vary. The employer has a lot of freedom to impose its rules in the assignment contract. It can even add penalties for non-appearance at work or set a notice period. A contract of mandate also gives the possibility to find a substitute in case the contractor is unable to turn up for work.
With a contract of mandate, the lowest hourly rate applies, not the minimum wage as with an employment contract. It is also important that the principal must pay social security contributions for each contractor and health insurance. Sickness insurance is voluntary, and pension or disability insurance is not mandatory.
Contract for work
A contract of work, also known as a contract of result, involves the performance of a specific task or work, rather than the process of completion itself. The person accepting the commission undertakes to complete and deliver the work to the ordering party within the agreed period. The principal in turn undertakes to pay the agreed remuneration and to accept the finished work. The principal must cooperate with the contractor to the extent necessary for the successful completion of the work.
In a contract for a work of art, the key is the result achieved, which may include both tangible activities, such as renovating a flat or making furniture, and intangible activities, such as designing a house or a website. The subject of such a contract may be the creation, transformation, or repair of specific objects.
B2B contract
A B2B contract, also known as a business to business (B2B) contract. It is a contract that is concluded between two companies. This type of cooperation can take different forms, regardless of the size of the companies involved. The parties to the contract can be joint stock companies and partnerships, as well as sole proprietorships.
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