In force from 22 February 2016: changes to fixed-term employment contracts – one of the most popular employment contracts
So far, rules concerning the duration of a fixed-term contract were nowhere explicitly defined. In practical terms, fixed-term contracts, which by definition were used as temporary or short-term contracts, were often concluded for five years or even longer periods. After the expiry of the second definite period contract, a third subsequent contract with the same employee automatically became a contract for an indefinite period.
The amendment changes the rules of the game:
in February it will be possible to enter into a maximum of three fixed-term contracts which together may last no longer than 33 months.
The Act provides exceptions to this rather strict limitation regarding the duration of such contracts – it will not apply to contracts for substitution of an employee, employment for casual or seasonal work, work for a term of office, and for other duly justified reasons attributable to the employer. In this case, though, the employer is responsible for informing the labour inspector about concluding this type of contract and stating the reasons.
The consequence of entering into a fourth fixed-term contract or exceeding the 33 month limit will be automatic transformation of such a contract into an indefinite period contract.
Another major change is the ability for either party to terminate any fixed-term contract in compliance with statutory notice periods. The advantage from the employer’s point of view is that in case of termination the employer will not have to give reasons for doing so.
The amendment is essential for employers because it applies to fixed-term contracts concluded prior to the entry into force of the amendment. Those contracts are still subject to the limitation regarding three contracts or a period of 33 months, where the 33 month period should be calculated from the date of entry into force of the amendment. In addition, new and longer notice periods will apply to fixed-term contracts which meet three requirements: conclusion took place before 22 February 2016, the period is longer than six months, and it provides the possibility for termination.
Source: Act of 25 June 2015 amending the Labour Code and other acts (J.L. 2015, item no. 1634)