Decommissioning of jobs as a reason for termination of employment contract – ADVICE

When planning to reorganise the company and liquidate 1 of the management positions, many employers ask themselves whether the indication of the liquidation of the workplace as the reason for the termination of the contract is in accordance with the regulations. The provision of Article 30(4) of the Labour Code (hereinafter: k.p.) makes it clear that in the employer's message of termination of a fixed-term or indefinite-term employment contract, a reason justifying termination should be given. However, the worker has the right to competition this reason and to appeal to the court.

Supreme Court case law

In the case-law on the liquidation of jobs, the key issue is whether organisational changes were truly needed or whether they could be an excuse to release a peculiar person. In the order of 22 February 2023, the mention to Act I PSK 62/22, The ultimate Court drew attention to an crucial aspect of the process of liquidation of the workplace. This judgement stresses that the labour court is not competent to measure the economical validity of the employer’s decision. The court does not examine whether the decision to reduce employment was deliberate or profitable from the point of view of the company. The Court of First Instance concentrates on verifying whether the reason for the dismissal contained in the message of termination existed, alternatively than on assessing the appropriateness of its introduction from an economical point of view.

Thus, if the employer terminates his occupation and states this as the reason for his resignation, the court will not examine whether specified a decision was right in terms of the company's economics. It is crucial whether the occupation has actually been liquidated and not economically justified.

Judgment of the territory Court for Warsaw-Śródmieście

An interesting case, which may aid to realize how labour courts approach the issue of occupation liquidation, is the judgement of the territory Court for Warsaw-Śródmieście in Warsaw of 15 January 2016, ref. Act VIII P 65/15. In this case, the court examined whether the termination of the employment contract was compatible and justified. In the message of reasons, the court indicated that the reason for the message must be actual and specific. This does not mean, however, that the court will examine whether the employer truly needs to make organisational changes, including the liquidation of the workplace, but only whether specified changes have taken place.

Importantly, the elimination of a occupation may affect not only the cessation of the tasks previously assigned to the individual in the job. In accordance with the judgement of the court, there may besides be a division of these tasks between another employees or a partial cessation of them and the separation of the remainder of the duties between another employees. specified reorganisation may be considered a legitimate reason for termination of the employment contract if it is decently documented by the employer.

The territory Court for Warsaw-Śródmieście besides stressed that the liquidation of the workplace due to a change in the organisational structure does not require comparison of qualifications, traineeship or another criteria between the redundant worker and another employees. In the present case, the court found that the employer had shown crediblely that organisational changes led to the liquidation of the occupation and that the duties were transferred to another employees. As a result, the court dismissed the employee’s action, considering that the liquidation of the employment position was justified.

Elimination of Labour Positions as Reasoned origin of Exemption

Consequently, in the event of a planned liquidation of the management position with the transfer of powers to private employees, it can be considered that the liquidation of that post may constitute a legitimate reason for the termination of the contract of employment. However, it is crucial that the employer can show that there has actually been organisational changes and that the liquidation of the position was a consequence of these changes.

It should be stressed that the labour court will not examine whether the decision to reorganise the company was economically justified, but will focus on whether the liquidation of the workplace actually took place. Therefore, it is so crucial that the employer has adequate documentation confirming the organisational changes and the liquidation of the position.

Summary

The termination of the occupation may be considered a legitimate reason for the termination of the employment contract if the employer is able to prove that there have been actual organisational changes in the company. In the event of the liquidation of the managerial position with the transfer of powers to another employees, the labour courts will not examine the economical validity of specified a decision, but will focus on verifying whether the liquidation of the position actually took place.

The information on the website is simply a description of the legal position at the date of publication and is not a legal advice on an individual case. The legal position of publication may change. The law firm is not liable for utilizing an alert to solve legal problems.

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Legal basis: Article 30, Article 44-45 of the Act of 26 June 1974. – Labour Code (i.e. diary of Laws of 2023 item 1465; last edition of diary of Laws of 2024 item 878)