Leaving work during the calendar year and annual leave

Publication / 28.01.2024

If there is a termination of employment during the calendar year, the employer who terminates the employment relationship settles with the dismissed employee for the portion of annual leave not used in kind (in the established proportion) up to the time of termination. On the other hand, the next employer who hires this employee during this calendar year will redetermine the amount of his/her annual leave in a proportion appropriate to the period of employment.

According to Article 171 § 1 of the Labour Code, in the event that an employee fails to use all or part of his annual leave due to the termination or expiration of the employment relationship, the employee is entitled to a cash equivalent. The obligation to pay the cash equivalent does not apply to this employer, and only in such a case, if the parties agree to use the vacation leave while the employee remains in the employment relationship on the basis of another employment contract concluded with the same employer immediately after the termination or expiration of the previous employment contract with this employer (Article 171 § 3 of the Labour Code).

Failure to pay the cash equivalent for unused annual leave by the previous employer may be treated as a violation of the provisions of the Code of Labour, and thus may cause the previous employer, to incur misdemeanour liability. This is because according to Article 282 § 1 item. 1 and item. 2 of the Code of Labour, is subject to a fine from PLN 1,000 to PLN 30,000 the one who, contrary to its obligation:

  • does not pay on the agreed date the remuneration for work or other benefit to which the employee is entitled or to a member of the employee’s family entitled to such benefit, unduly reduces the amount of such remuneration or benefit or makes unjustified deductions,
  • does not grant the employee’s accrued annual leave or unjustifiably reduces the amount of such leave.