Katarzyna Kanik for Rzeczpospolita: “Higher severance pay upon termination of an employment contract”
Employees dismissed for economic reasons may be entitled to significantly higher severance pay if they previously cooperated with the same company under civil-law contracts or as self-employed contractors. An amendment to the Polish Labour Code allows such periods to be added to the employer-specific length of service, which directly affects the amount of severance pay due. Attorney-at-law Katarzyna Kanik explains how to use the new regulations and what documents are required in today’s issue of Rzeczpospolita.
Who is entitled to severance pay
Severance pay is due to employees hired under an employment contract who lose their job for reasons beyond their control, such as restructuring, economic difficulties or the liquidation of a position. The benefit applies both in the case of collective redundancies and individual dismissals, provided that the employer employs at least 20 people. The amount of severance depends on the employee’s length of service with the employer. Where the length of service is less than two years, severance equals one month’s remuneration; from two to eight years, it equals two months’ remuneration; and where the length of service exceeds eight years, it equals three months’ remuneration.
How the new regulations increase severance pay
Following the amendment, the employer-specific length of service may include periods of running a business, performing work under mandate contracts or working abroad for the current employer. A person who worked for four years under a mandate contract and then for four months under an employment contract will, after adding these periods together, exceed the two-year threshold and receive two months’ severance instead of one. Someone who cooperated with the employer as a freelancer for seven years and was then employed under an employment contract for 18 months may be entitled to three months’ severance instead of one. The difference may amount to as much as several tens of thousands of zlotys.
When the new rules apply
The new entitlements will apply from 1 January 2026 for public finance sector entities and from 1 May 2026 for other employers. Importantly, the right to higher severance arises at the moment the employment relationship ends, not earlier. If notice of termination was given before the amendment enters into force but the employment contract ends after that date, the employee may submit the relevant documents and request a recalculation of severance. However, employees whose employment relationship ended before the new regulations entered into force cannot demand a reassessment of the benefit.
What needs to be done to receive higher severance
The employee must independently document the additional periods of service by submitting a certificate from the Social Insurance Institution (ZUS), which can be obtained electronically via the PUE/eZUS system. If no data are available in the system, civil-law contracts, invoices or certificates issued by contractors may be used. Employees who are employed on the date the amendment enters into force will have 24 months to collect and submit the relevant documentation to their employer. The documents must be submitted before the employment relationship ends; after that date, it is no longer possible to influence the amount of severance pay.
How does adding civil-law contracts affect the amount of severance pay? When can an employee take advantage of the new rules for calculating length of service? What documents are required to prove additional periods of service? These and many other questions are answered by Katarzyna Kanik in her article published in Rzeczpospolita.
