In practice, it may happen that an employee, who is within a period of notice, seriously breaches basic duties, giving the employer grounds to terminate the employment contract without notice (a disciplinary dismissal). In such case, the employer will not have to wait for the period of notice to expire: the employer will be able to terminate the contract immediately due to a fault of the employee, without having to withdraw the earlier notice of termination.

Nevertheless, such a decision carries significant legal consequences as the employee may appeal against both the notice of termination and the disciplinary dismissal. Furthermore, the only provision of the Labour Code that explicitly governs the effects of an immediate termination of employment due to a fault of the employee within a period of notice is Article 60 of LC, and it does not cover all possible situations. Below, we discuss common scenarios and their practical implications for employers.

Possible claims from an employee

Where an employer has issued a notice of termination and subsequently, during the period of notice, terminates the employment contract immediately due to a fault of the employee, the employee may lodge an appeal with a labour court against both decisions. In such a case, the legality of each act will need to be assessed separately in order to establish the claims available to the employee.

Justified termination notice with an unjustified disciplinary dismissal

If the notice to terminate employment has been issued in line with the law, but the subsequent immediate contract termination proves defective, then Article 60 of LC will apply. Under this provision, if the employer terminates an employment contract during a period of notice in breach of the provisions on termination without notice, the employee will be entitled only to compensation equal to the remuneration due for the remaining duration of the period of notice.

In practice, this excludes claims which are available, in typical litigation, to the employee under Article 56 of LC for a defective termination of employment contract without notice. Therefore, in this situation, the employee may neither claim reinstatement to work nor compensation in the amount specified in Article 58 of LC. The employee may only claim compensation under Article 60 of LC. This is confirmed by Supreme Court case law (judgment of 22 July 2008, II PK 361/07; judgment of 24 February 2016, III PK 70/15).

It is worth bearing in mind, here, that if the employee challenges both declarations of the employer – the notice of termination as well as the immediate termination – any application of Article 60 of LC will require a prior determination that the earlier notice of termination was valid. Only then will it be possible to assume that the employment would have ended anyway with the expiry of the period of notice, which is the underlying premise of this provision.

The employer’s financial exposure in this scenario is limited to the remuneration due for the remaining duration of the period of notice. Nonetheless, this does not alter the fact that any termination of the contract without notice should be carefully drawn up, particularly with regard to the wording of its grounds. From a practical point of view, it is also worth noting that the closer that the disciplinary dismissal occurs to the end of the period of notice, the smaller the potential benefit of issuing it, compared to simply waiting for the notice to run its course.

It is also worth taking a look at a specific case: if a defective termination of employment without notice takes place on the last day of the period of notice, the employee will not be entitled to any compensation at all under Article 60 of LC. The contract would have terminated on that day, anyway, as a result of the earlier notice, and therefore the employee will not have suffered any loss that the compensation would make good. This does not mean, however, that the employer’s act is without significance: the employee will retain a legal interest in bringing a lawsuit for a declaratory judgement under Article 189 of the Civil Procedure Code to demonstrate the invalidity of the disciplinary dismissal, which may be relevant, for example, for the wording of the certificate of employment.

Unjustified termination notice with an unjustified disciplinary dismissal

A more complex situation arises if both acts of the employer are found to be defective – the notice of termination as well as the subsequent disciplinary dismissal. The question then arises as to whether the employee will be entitled to two separate claims or – despite the several defective acts – only a single claim for compensation. This issue has not been clearly resolved in legislation and gives rise to diverging positions in case law as well as legal doctrine.

However, the Supreme Court’s resolution of 4 April 2019 (III PZP 2/19) is of pivotal significance for this issue, as it permits an employee to pursue compensation claims on both grounds simultaneously:

• under Article 45 par. 1 in conjunction with Article 47¹ of LC for a defective notice of termination
• and under Article 56 par. 1 in conjunction with Article 58 of LC for a defective disciplinary dismissal.

The Supreme Court has also stipulated that the associated payments have a compensatory function; consequently, they may partially or entirely overlap, thereby precluding the accumulation of the full lump-sum amount.

In practice, this means that an employee may be awarded full compensation under Article 56 par. 1 of LC (for defective disciplinary dismissal) and, in addition, partial compensation under Article 45 par. 1 of LC – in the amount by which, as a result of the disciplinary dismissal, the employee was deprived of remuneration for the period of the notice. The Supreme Court justified this on the grounds that the situation of an employee who has been the subject of two breaches of the law committed by the employer may not be less favourable than that of an employee who has merely been served with a defective notice of termination and allowed to ‘work off’ the remainder of the period of notice.

This resolution has altered the hitherto line of case law and is part of a broader trend of extending employers’ liability for compensation for defective actions aimed at terminating employment. A similar view has been presented in legal doctrine for many years, according to which employees are entitled to as many claims as are available to them under labour law, and a double breach of the provisions on terminating contracts should give rise to double consequences for the employer – also because of the punitive function of compensation.

Unjustified termination notice with a justified disciplinary dismissal

There is no uniform position in legal doctrine or case law regarding the legal consequences of a situation in which the termination of an employment contract has been carried out in breach of the law, while the subsequent termination without notice due to a fault of the employee was justified and lawful.

In our view, it is arguable that a proper termination of an employment contract without notice cures an earlier defective termination notice. This is because an examination of the legality or validity of the notice becomes irrelevant and has no bearing on the continued existence of the employment. In other words, in the event of a lawful termination of an employment contract on disciplinary grounds, the employee will not be entitled to compensation for the earlier defective termination of the contract with notice (see, for example, the Supreme Court judgment of 26 May 2000, I PKN 675/99).

Nonetheless, because there is no clear legislation governing this situation, differing views also appear, in which the employee is entitled, even in this case, to as many claims arising from the employer’s defective acts aimed at terminating the employment, as are available to the employee under labour law. Employers should bear in mind that, in the event of a dispute, employees are likely to put forward this very view, seeking compensation for a defective termination of their employment contract with notice.

It is also worth remembering that any withdrawal of an earlier, possibly defective notice of termination is not as straightforward as might seem. In accordance with established case law, the revocation of a decision to terminate that has already been received by the employee requires the employee’s consent. Therefore, by issuing a disciplinary dismissal, the employer does not automatically ‘nullify’ the earlier notice of termination – it will remain legally valid and may be challenged separately by the employee.

Other consequences for the employer

The service of a disciplinary dismissal to an employee during a period of notice also has consequences in areas other than the employee’s claims themselves. Above all, the employment terminates with immediate effect, without the need to wait for the period of notice to run its course, which must be appropriately recorded in the employment certificate. From a procedural perspective, though, both sets of proceedings – the appeal against the notice of termination and that against the immediate termination of the contract – may be joined together for joint consideration. It should be borne in mind, however, that these are two separate claims, based on different factual and legal grounds, so the employer should be prepared for a defence on two simultaneous fronts.

Summary

It is legally permissible to serve an employee with a disciplinary dismissal during a period of notice. If, however, the employee challenges it, the employer must be prepared for significant consequences. The range of claims available to the employee will depend in each case on an assessment of the legality of the notice of termination, as well as the subsequent immediate termination of the employment.

Before deciding to start disciplinary dismissal during a period of notice, it is therefore advisable to be aware of the potential legal consequences and to give careful consideration to possible scenarios and their associated risks.

Natalia Bigdowska, Magdalena Solarska