Collective layoffs are a special procedure for terminating an employment contract for reasons attributable to the employer. Collective layoffs occur when all of the following conditions are met: the employer employs at least 20 employees, and the reasons for the layoffs are attributable to the employer.
Collective redundancies must include at least:
- 10 employees if the employer employs fewer than 100 employees,
- 10% of employees if the employer employs at least 100 but less than 300 employees,
- 30 employees when the employer employs at least 300 or more employees.
Another condition is that the sick leave must be carried out within a period not exceeding 30 days.
Ultimately, the termination of the employment contract is to take place for reasons beyond the control of the employer, by notice or by agreement of the parties at the initiative of the employer.
Employer initiative
However, the doctrine and case law raise doubts regarding the employer's initiative, which can be understood not only as the actual handing over of this document by the employer, but also as its preparation by the employee in response to the employer's suggestion.
It's worth noting the issues surrounding the emerging practice of the so-called "Voluntary Redundancy Program" (VRP). According to the Supreme Court, such agreements do not constitute a source of law. According to the prevailing doctrine, the assessment of such a document will depend largely on its content. If it consists of an offer to leave under specific terms, without specifying the number or duration of the offer, then collective redundancy procedures are unnecessary, even if the actual number of employees leaving employment exceeds the statutory threshold.
Reasons for termination of employment
Collective layoffs can be considered when employment relationships need to be terminated for reasons unrelated to the employees, including reasons attributable to the employer, primarily resulting from financial problems and organizational changes. As an example of this, the Supreme Court points out that a reduced demand for legal services constitutes grounds for terminating a legal counsel's employment contract. In this regard, the assessment of whether such a termination will be effective only involves assessing the validity and effectiveness of the criteria adopted for selecting employees for the position.
Collective layoffs and severance pay
Laid-off employees are entitled to severance pay. The amount of the severance pay depends on the employee's length of service. Thus, the employee is entitled to severance pay in the amount of:
- 1 month's salary (employment lasts less than 2 years);
- 2 months' salary (employment from 2 to 8 years);
- 3 months' salary if the employee has been employed by a given employer for over 8 years.
The maximum amount of severance pay cannot exceed 15 times the minimum wage.
Re-employment of an employee
If the employer's financial situation improves, an employee dismissed as part of a collective layoff has priority to return. This does not mean returning to the position previously held, the same salary, or the same terms and conditions of employment prior to the dismissal.
The employer is obliged to re-employ a dismissed employee if all of the following conditions are met:
- the employer re-employs employees in the same occupational group;
- the dismissed employee has notified his or her intention to take up employment with that employer within one year of the date of termination of his or her employment relationship;
- less than 15 months have passed since the termination of the employee's employment relationship as part of the collective redundancy.
If an employer fails to rehire a previously dismissed employee despite meeting the above conditions, they risk being sued for reinstatement and compensation. Compensation covers the period of unemployment from the moment the employer becomes obligated to rehire the employee.
This article is for informational purposes only and does not constitute legal advice.
Legal status as of May 9, 2024
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