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01 February 2015

Poland: Redundancy Selection Criteria – Dismissal of Employees Based on Grounds Connected to the Employer

If the employer intends to terminate an employment agreement for reasons not attributable to the employee, it must apply the selection criteria for dismissal and indicate them in its declaration of will regarding termination of employment.

Reasons not attributable to employees

All companies occasionally consider organisational changes that involve restructuring employment and eliminating positions, and thus dismissing employees.

The basis for such actions are the provisions of the Act of 13 March 2003 on special principles for terminating employment with employees for reasons not attributable to employees (the Act). The Act applies to employers with at least 20 employees and allows the termination of employment agreements for reasons not attributable to employees. These reasons are mainly economic, such as a decrease in orders resulting in redundancy and reduced production; organisational causes, such as reduction of work positions in connection with the reorganisation of tasks; technological changes that result in less demand for workforce; or liquidation of the employer.

Selection criteria

If the dismissal is not covering a whole group of employees but only part of them, then the employer must establish and apply certain criteria for the selection of employees for redundancy. The employer must apply selection criteria in which the employee to be dismissed is compared with other employees in order to select him for dismissal. According to current case law, the criteria must be objective and fair. The employer may determine such criteria, which for the planned organisational changes are necessary for the employer.

Assessment of the selection of employee for dismissal must be made considering the characteristics of the employee directly related to the employment relationship (including education, qualifications, period of service, experience, attitude toward duties, predisposition to hold a particular position, professional achievements, etc.) and to the personal and family situation of the employee. The employer should limit itself to the same working group while comparing employees, which means comparing all employees in a given working group employed in the whole workplace (eg, if the redundancy refers to part of the IT department, the employee to be dismissed should be compared with other employees performing work in the same position in the IT department, in order to select the least useful employees given the planned changes).

When determining the selection criteria, the employer should also consider the principle of non-discrimination of employees. The personal or family situation of the employee is taken into account only when the applied criteria yield comparable results, and it is hard to select the employee to be dismissed. Then the choice of an employee who has a worse personal situation may be considered by the court as contrary to the principles of community life.

Liquidation of work position

In case of liquidation of all work positions in a specific working group, the employer need not determine and apply such selection criteria. In this case, there is no need to compare the employee who is to be dismissed with other employees because all positions in the working group are to be terminated. The same rule applies in case of liquidation of a sole working position related to performing specific tasks.

The obligation to indicate the selection criteria in case of termination of the employment agreement

The case law strengths the view that, if redundancy leads to the selection of an employee or group of employees from a larger number of employees in the same working group, the employer in a written declaration of will regarding termination of employment must indicate not only the reason for such termination (eg, liquidation of working position as a result of reorganisation of the entire department) but also the adopted selection criteria for the dismissal. This means that such criteria should be indicated in a termination letter to the employee to be dismissed, and they may not be disclosed to the employee later (eg, in court proceedings). This is because the reason for termination is not only a redundancy and liquidation of a working position at which the employee is employed as a consequence but also the situation of the employee to be dismissed, determined by the selection criteria. A lack of selection criteria means that the employee is deprived of the possibility to assess the relevance of the employer’s choices and is thus forced to initiate a court proceeding to discover the reasons for termination.

So if the employee appeals a termination in which the selection criteria for the dismissal have not been identified, the labour court may rule that the termination was unjustified, the consequences of which are recognition of the ineffectiveness of the employer’s action and reinstatement of the employee, or compensation. The fact that the selection criteria have been in fact determined and applied by the employer prior to the termination of the agreement does not matter in the court proceeding, because such reasons may not be referred to if not specified in the termination.

If an employer terminates an employment agreement for reasons not attributable to the employee, it should determine the proper selection criteria for the dismissal, compare employees to be dismissed within the same working group, and indicate the criteria in a written declaration of will regarding termination, submitted to the employee.

author: Barbara Jóźwik