A logistics company based in the Mazowieckie region reduced its headcount by 34 employees in a single quarter. The redundancy programme was driven by warehouse automation. Management assumed the severance calculation was routine. It was not.

Under Polish labour law, severance pay on collective redundancy is calculated by reference to the employee's length of service with the specific employer, subject to a statutory cap of 15 times the minimum wage. The formula applies three tiers: one month's pay for service under two years, two months' pay for service between two and eight years, and three months' pay for service exceeding eight years. Errors in applying the cap or misclassifying continuous service can expose the employer to claims before the Labour Court (Sąd Pracy) within three years of the disputed payment.

This case study examines how the company's initial approach created material liability, how that liability was identified and contained, and what transferable lessons apply to any Polish employer facing a restructuring programme. The analysis covers background, the legal framework, the correction strategy, and key takeaways for HR and legal teams.

What went wrong with the initial severance calculation?

The company's HR team calculated severance using each employee's contract start date. That approach sounds logical. In practice, Polish employment law requires a broader view. The ustawa o szczególnych zasadach rozwiązywania stosunków pracy z przyczyn niedotyczących pracowników (Act on Collective Redundancies) treats periods of employment with predecessor entities as continuous service where a business transfer occurred. The company had acquired a smaller transport operator two years earlier. Employees who transferred under that acquisition carried their prior service into the new entity.

The practical effect was significant. Around 11 of the 34 employees had combined service exceeding eight years once the acquisition period was included. Those employees were entitled to three months' pay rather than the two months the company had issued. The underpayment per affected employee ranged between PLN 6,000 and PLN 14,000, depending on base salary. Aggregate exposure reached approximately PLN 120,000 before interest.

A second error compounded the first. The company applied the minimum wage cap using the figure in force at the time of the acquisition rather than the figure current at the date of termination. Polish labour legislation fixes the cap by reference to the minimum wage applicable on the date the employment relationship ends – not any earlier benchmark. In spring 2025, the minimum wage had risen materially. The cap was therefore higher than the company assumed, and several higher-earning employees were entitled to more than the company's spreadsheet produced.

How did the legal team identify and contain the exposure?

The company's general counsel engaged our employment team after receiving the first two formal complaints from former employees. Our immediate task was to audit all 34 termination files before further claims were filed. The National Court Register (KRS) confirmed the chain of corporate ownership. Employment records from the acquired entity – held by the District Labour Office (Okręgowy Inspektorat Pracy) – confirmed service continuity for the 11 affected employees.

We identified three distinct risk categories. First, employees with underpaid severance due to service miscalculation. Second, employees whose severance had been correctly calculated but whose written notice failed to state the reason for termination with the specificity required by the Labour Court. Third, two employees who were members of a trade union (Związek Zawodowy) and whose dismissal had not been preceded by the mandatory consultation period of at least five working days.

  • Audit all termination files against the collective redundancy register
  • Verify service continuity through KRS and prior employment contracts
  • Confirm the minimum wage cap applicable on each termination date
  • Check trade union membership status before issuing notice
  • Retain documentary evidence of the economic rationale for redundancy

We secured a negotiated settlement with 9 of the 11 underpaid employees within six weeks of engagement, paying supplemental amounts totalling just over PLN 90,000. We also assisted with whistleblower protection analysis for one employee who had raised internal concerns before being included in the redundancy list – a point with direct relevance to the anti-corruption compliance framework under Polish law, which imposes separate obligations on employers when a protected disclosure has been made. The remaining two trade union cases were resolved through mediation before the Labour Court, avoiding a formal judgment.

What are the transferable lessons for employers?

The Mazowieckie matter is not unusual. Similar patterns arise whenever a Polish employer restructures following an acquisition or where the workforce spans multiple historical entities. Three lessons stand out.

First, service continuity is not self-evident. Any employee who joined through a business transfer, a spin-off, or a public sector privatisation may carry service from an earlier employer. The Kodeks pracy (Labour Code, KP) is explicit: periods of employment with the previous employer count toward the severance tier. Employers must request and retain employment certificates (świadectwa pracy) covering the full employment history before calculating entitlement. This obligation also applies to foreign nationals holding a work permit in Poland who previously worked for a related entity abroad.

Second, the minimum wage cap changes annually and sometimes mid-year. Polish legislation has provided for two minimum wage adjustments within a single calendar year in recent periods. An employer running a redundancy programme that spans more than one quarter must apply the cap in force on each individual termination date – not a single figure for the whole programme. Failure to do so produces systematic underpayment for employees terminated in a later quarter when the minimum wage has risen.

Third, procedural defects are as costly as calculation errors. Notice that lacks a specific reason, consultation periods that are too short, or failure to notify the District Labour Office within the statutory seven-day window each provide independent grounds for a Labour Court claim. For employers with posted workers arriving under A1 certificates, the procedural requirements interact with social security obligations – an issue addressed in detail for workers arriving from the UK at posted workers from the United Kingdom to Poland.

We obtained a full correction of the severance register and secured written releases from 31 of the 34 former employees for a manufacturing client in the Mazowieckie region (spring 2025), limiting residual litigation exposure to a single disputed notice-period claim. Acting early – before claims reached the Labour Court – reduced total cost by an estimated 40 percent compared with contested proceedings.

For foreign investors and companies employing EU Blue Card holders or other international staff, the calculation framework is identical. The Labour Code applies to all employment relationships governed by Polish law regardless of nationality. An employment lawyer in Warsaw familiar with cross-border mobility will also need to consider whether severance interacts with social security treaties or impacts A1 certificate validity.

Specific situations your company faces may have irreversible consequences if left unaddressed. A former employee has three years to bring a claim, and a single procedural defect – such as omitting the reason for termination – can convert a correctly calculated severance into a full reinstatement order.

To receive an expert assessment of your severance exposure or collective redundancy procedure, contact info@kordeckipartners.com.

Frequently asked questions

Q: Does the three-tier severance formula apply to all dismissals or only collective redundancies?

A: The statutory severance formula under the Act on Collective Redundancies applies specifically to dismissals for reasons not attributable to the employee, including both collective and individual redundancies where the employer has at least 20 employees. For dismissals on other grounds, different rules apply under the Labour Code. Employers below the 20-employee threshold are not subject to the collective redundancy regime at all.

Q: How long does an employer have to pay severance after the termination date?

A: Polish employment law requires severance to be paid on the last day of employment or, at the latest, on the day the employment relationship formally ends. There is no grace period. Late payment triggers statutory interest and may constitute grounds for a separate claim before the Labour Court. In practice, employers processing large-scale redundancies should prepare payment schedules at least two weeks in advance of each termination date.

Q: Can an employer and employee agree to a lower severance amount?

A: No. The statutory severance floor is mandatory and cannot be waived by agreement. A settlement that purports to accept less than the statutory entitlement is unenforceable to the extent it falls below the minimum. Employers may pay more than the statutory amount – and often do in mutual termination agreements – but may not pay less. This is a common misconception in companies that treat severance as a negotiable commercial term.

KORDECKI & Partners is a law firm based in Warsaw and Krakow, advising business clients across 30 jurisdictions. Our team combines expertise in Polish and international law with a practical approach to employment law, collective redundancies, and workforce restructuring. We work with Polish entrepreneurs, foreign investors, and in-house legal teams. To discuss your situation, contact info@kordeckipartners.com.

Disclaimer: This publication is provided for informational purposes only and does not constitute legal advice. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. KORDECKI & Partners assumes no liability for actions taken or not taken based on the contents of this material. For advice regarding your particular situation, please contact info@kordeckipartners.com.