Refusal to accept new employment terms in the context of a change-of-termination notice and the obligation to pay severance payment.

Employers sometimes wonder whether they will have to pay severance payment when an employee refuses to accept new employment terms proposed in a change-of-termination notice.

The issue can arise when the change-of-termination notice is incorrectly formulated, particularly regarding the specification of the reason behind the decision to make such a change.

According to Article 30 § 4 of the Labor Code, when an employer issues a notice of termination, whether for a fixed-term or indefinite-term contract, the notice must specify the reason justifying the termination or change. This reason must be specific, true, and clear to the employee.

Furthermore, Article 10(1) of the Act of March 13, 2003, on Special Rules for Terminating Employment Relations with Employees for Reasons Not Related to Employees (the “Act”) states that the provisions of Articles 5(3)-(6) and 8 of the Act apply accordingly when an employer with at least 20 employees needs to terminate employment relationships for reasons not related to employees. These reasons must be the sole cause justifying the termination of the employment relationship or its resolution through mutual agreement, and if dismissals occur within 30 days, the number of employees dismissed must be fewer than specified in Article 1.

Jurisprudence of the Supreme Court indicates that the distinction between a change-of-termination notice and a definitive termination notice is significant only in assessing whether the reasons mentioned in the Act on collective dismissals are the sole cause justifying the termination of the employment relationship. If an employee is offered suitable work, their refusal to accept it may, in certain circumstances, be treated as a contributing factor in the termination of the employment relationship. This would apply if, due to the interests of both the employee and the employer, and the nature of the proposed work, it could be expected that the employee should accept the new terms offered.

It is accepted that in cases where an employee refuses to accept the proposed new terms of employment, severance payment may exceptionally be awarded if the new terms in the change-of-termination notice can be considered as an attempt to terminate the employment relationship or objectively unacceptable, essentially a pretense to end the employment relationship.

Therefore, the employer must always assess whether a so-called “contributing cause,” as referred to in the above-mentioned Article 10 of the Act of March 13, 2003, exists, which would exempt the employer from the obligation to pay the employee severance payment.