Amendment to the Labour Code concerning fixed-term employment contract regulation

On 22 February 2016, the Act of 25 June 2015, on amending the Labour Code and some other laws, was brought into force, which results in substantial changes within the scope of fixed-term employment.

The effects of the aforementioned amendment, regulating employment under fixed-term contracts, are as follows:

1. Changes to the types of employment contract

Deleted from the catalogue of employment contracts are types such as contract for substitution or contract for the term of specified work performance, which are jointly replaced with one type of contract, i.e. fixed-term contract. Consequently, as of 22 February 2016, the Labour Code now identifies three types of employment contract (probation contract, fixed-term contract, and open-ended contract).

2. Constraints on the fixed-term contract lifetime (time constraints)

The Legislator decided to adopt the maximum length of time a fixed-term contract may be concluded for, which is 33 months. Also, in the case when a few fixed-term employment contracts are entered into by the same parties to the employment relation, the total employment length under the said contracts may not exceed 33 months. In the event of exceeding the term, the employee, as of the date immediately ensuing the 33-month term expiry, shall be deemed hired under an open-ended employment contract.

3. Maximum number of fixed-term employment contracts to be possibly entered into by the same employer and employee (quantitative constraint)

The same employer and employee may conclude between each other up to three fixed-term contracts as a maximum, irrespective of the length of time that passes between subsequent fixed-term employment contracts conclusion. When the fourth contract has been signed, the employee shall be deemed hired under an open-ended employment contract.

The Legislator stipulates, however, a number of exceptions to the above itemised time and quantitative constraints fixed-term contracts are subject to. Those diversions concern:

1. Contracts for substitution;
2. Contracts for casual and seasonal work performance as well as contracts for work provision during the term of office;
3. Contracts concluded for objective reasons attributable to the employer, on which the employer shall be obliged to notify the regional labour inspectorate within five working days since the contract conclusion (in an electronic or written form, with justifications as to why the contract is being entered into).

4. Changes to the fixed-term contract termination notice period as well as to the rules of such contracts termination with notice

In place of the rule previously in force providing for a two-week termination notice period in the case of fixed-term contracts of a lifetime longer than six months, the Legislator adopted the statutory contract termination notice periods (the same as those applicable to open-ended contracts).

The foregoing stipulates that it shall be possible to terminate any fixed-term contract (irrespective of the lifetime it was concluded for), whereas the notice period for such contracts termination shall be dependent on the employee’s length of employment with the given employer, and shall amount (as the case is with open-ended contracts) respectively to:

1. Two weeks, when the employee has been hired for a period shorter than six months,
2. One month, when the employee has been hired for a period of at least six months,
3. Three months, when the employee has been hired for a period of at least three years.

To conclude with, noteworthy are also the interim regulations on fixed-term contracts and the impact of the amendment on the already concluded (before the date of the amended provisions entering into force) fixed-term contracts. Most fixed-term contracts running on the date of the amended regulations entering into force will be governed by those newly adopted regulations (though, with certain exceptions). The rules, in principle, are:

1. The length of employment, having an impact on the fixed-term contract termination notice period, shall be calculated as of the date of the amended regulations coming into force;
2. The maximum length of employment under a fixed-term employment contract shall be calculated as of the date of the amended regulations coming into force;

A fixed-term employment contract running on the date of the amended regulations coming into force shall be deemed the first (and in some cases – the second) fixed-term employment contract in the understanding of the amended provisions.