Definition of the expiry of an employment contract
The expiry of an employment contract is a form of ending the employment relationship that differs from a standard termination of a contract. While termination requires action to be taken by one or both parties (e.g. the employer and the employee), expiry occurs automatically, as a result of events specified in the provisions of the Labour Code, without the need to submit any declarations of intent.
The Labour Code clearly regulates the situations in which an employment contract may expire. This most often happens as a result of the death of the employee or employer, but the law also provides for other cases. Under Article 63(1) of the Labour Code, the employment relationship expires on the day of the employee's death. In such a situation, the property rights arising from the employment relationship pass to the members of the employee's family in accordance with the rules of inheritance. Importantly, this type of situation does not require any formal steps on the part of either the employer or the employee – the employment relationship simply ends.
Similarly, an employment contract may expire as a result of the employer's death. The Labour Code provides for the possibility of establishing a succession board (zarząd sukcesyjny) at the moment of the employer's death, which may affect the employees' situation. If no succession board is established, the employment contract expires automatically and employees lose their jobs, unless the business is transferred to a new employer under the terms set out in labour law provisions.
A long-term justified absence of the employee from work, caused for example by illness, may also lead to the expiry of the employment contract. If the absence lasts longer than 3 months (in the case of employees employed for a fixed term), the contract may expire without the need to give notice.
It's worth emphasising that the expiry of an employment contract differs from its termination. Terminating an employment contract requires formalities such as a notice period or the parties' agreement, whereas expiry occurs automatically, without any additional action being taken. For example, a fixed-term employment contract ends upon expiry of the agreed period, but in the case of expiry, the contract ends due to an event that the law considers sufficient to end the employment relationship.
Examples of such events also include exceptional situations, such as the employee's temporary detention for a period longer than 3 months. In such a case, the employment contract may also expire if the employer and the employee do not agree on another solution. The Labour Code provides that within 7 days of the court ruling becoming final, the employer may decide to end the employment relationship without the need to give notice.
When an employment contract expires, the employer is obliged to promptly issue a certificate of employment confirming the end of the employment relationship and stating the legal basis for the expiry. Furthermore, if the contract expires due to the death of the employee, their family has the right to compensation and other benefits arising from the employment relationship
Legal grounds for the expiry of an employment contract
The expiry of an employment contract is one of the forms of ending an employment relationship, regulated in detail by the provisions of the Labour Code. The legal grounds for expiry arise from situations independent of the will of the employee or employer, in which the employment relationship ends automatically without the need to give notice. The Labour Code provides for several key events that cause an employment contract to expire, and each of them is precisely regulated in specific articles of the Code.
The employee's death as grounds for expiry of the contract
One of the most common reasons for the expiry of an employment contract is the death of the employee. Under the provisions of the Labour Code, the employment relationship expires on the day of the employee's death (article Kodeks Pracy - wygaśnięcie umowy o pracę, available at zielonalinia.gov.pl). In such a situation, the property rights arising from the employment relationship, such as unpaid remuneration, pass to the members of the deceased's family in accordance with the rules of inheritance. The employer is obliged to settle accounts with the employee's family within 30 days of the date of death, which includes not only ending the employment relationship but also issuing the necessary documents and paying any outstanding benefits.
The employer's death and expiry of the employment contract
Another cause of the expiry of an employment contract is the death of the employer. Under Article 63(2) of the Labour Code, the employment contract expires on the day of the employer's death, unless the business is taken over by a new employer under the terms set out in labour law provisions. In special cases, a succession board (zarząd sukcesyjny) may be established, allowing the company's operations and the employment relationship to continue (article Jak zakończyć współpracę pracodawcy z pracownikiem, available at biznes.gov.pl). If a succession board is not appointed, employment contracts expire automatically, and the employer (or their heirs) is obliged to settle accounts with the employees.
Long-term justified absence of the employee from work
A long-term justified absence of the employee, for example due to illness, may also lead to the expiry of the employment contract. Under Article 63(1) § 2 of the Labour Code, if the absence lasts longer than 3 months and the employment contract was concluded for a fixed term, the contract may expire without the need to give notice. In that case, the employer is obliged to settle the employee's remuneration and issue a certificate of employment within 7 days of the contract's expiry.
Temporary detention as a cause of expiry of the employment contract
The expiry of an employment contract due to the employee's temporary detention is one of the less common, though legally provided-for, situations. If the detention lasts longer than 3 months, the employer has the right to consider the employment relationship expired, as provided for in Article 66 of the Labour Code. The employer does not need to give notice, and the contract expires automatically upon the lapse of 3 months of the employee's absence from work. However, if the criminal proceedings are discontinued or the employee is acquitted, the employer may be obliged to re-employ the employee on the same terms.
Succession board for a sole proprietorship
Where a business run by a sole proprietor is placed under a succession board, the provisions of the Labour Code provide for the possibility of continuing the employment relationship under Article 63(2). If a succession board is established following the employer's death, employment contracts do not expire automatically, allowing employees to remain in employment. This is particularly important in the context of small businesses, where the death of the owner could otherwise lead to a sudden cessation of operations.
Other cases of expiry of an employment contract
In addition to the situations mentioned above, the Labour Code also provides for other circumstances in which an employment contract may expire. One of these is the lapse of the period for which the employment contract was concluded. In such a case, the contract expires on the date for which it was scheduled, without the need for the employer or employee to submit any additional declarations.
Key differences between expiry and termination of an employment contract
The Labour Code clearly distinguishes between the expiry and the termination of an employment contract. Both concepts relate to ending the employment relationship, but they differ in terms of causes and formalities.
Expiry of an employment contract
Expiry of a contract occurs automatically, without the need for the employer or employee to submit any declarations. Here are the most common reasons why an employment contract expires:
- Death of the employee – The employment relationship expires on the day of death. The employer is obliged to settle accounts with the deceased's family, including paying, among other things, remuneration for the notice period.
- Death of the employer – The contract expires automatically unless the business is taken over by a succession board. In such a situation, employees can continue working until the succession board's mandate expires.
- Temporary detention – The contract expires if the employee's absence due to detention lasts longer than 3 months.
In the case of expiry of a contract, the formalities are limited to issuing a certificate of employment and settling accounts with the employee. The employer is not obliged to give notice or obtain the employee's consent.
Termination of an employment contract
Terminating a contract requires action to be taken by the employer or the employee. It can take place in several ways:
- By mutual agreement – The parties can agree on an earlier date for terminating the employment contract, which is often a favourable solution for both the employee and the employer.
- With notice – The employee or employer can terminate the employment contract while observing a notice period, the length of which depends on the length of service.
- Without notice – Termination of an employment contract without notice occurs when the employee grossly breaches their duties, or in the case of temporary detention.
In every case of terminating an employment contract, specific deadlines apply and must be observed. It's worth remembering that an employee who disagrees with the employer's decision to terminate the contract can appeal to the labour court within 7 days of receiving the notice. The labour court determines whether the notice complied with the regulations, and if it did not, it may order the employee's reinstatement or award compensation equal to the remuneration for the notice period.
Summary
The expiry of an employment relationship is a form of ending it that occurs automatically for reasons beyond the will of the parties. Under the provisions of the Labour Code, an employment contract may expire due to the death of the employee or employer, or due to temporary detention. The employment contract expires on the date of expiry, meaning that no notice needs to be given.
In the case of the employee's death, their employment relationship ends automatically, and the deceased's family has the right to benefits, such as compensation equal to their remuneration. The employer's death can also lead to the expiry of the contract, unless a succession board has been established, allowing the workplace to continue operating. In addition, expiry can occur after 3 months of justified absence from work due to illness or temporary detention.
If the employee disagrees with the expiry of the contract, they have the right to appeal to the labour court within 7 days of the decision becoming final. The Labour Code provides for various forms of ending the employment relationship, including termination of the contract, but expiry of a contract is automatic in nature and does not require any action to be taken by the parties.
