What should terminating an employment contract by mutual agreement look like?
Terminating an employment contract by mutual agreement is a way of ending the employment relationship that requires the consent of both parties - the employee and the employer (article Porozumienie stron, czyli jak najkorzystniej zakończyć stosunek pracy, available at pit.pl). This form of contract termination is beneficial because it allows the formal notice period to be avoided and enables the terms of ending the cooperation to be arranged flexibly.
The procedure
1. Proposal to terminate the contract
The initiative can come from either the employee or the employer. The proposing party presents the proposal in writing, and it should include the date of contract termination and any additional terms, such as severance pay or other benefits.
2. Negotiations and arrangements
Both parties negotiate the terms of the contract termination, agreeing on, among other things, the end date of the employment relationship, the benefits due to the employee and other key issues. It is important that the arrangements are clear and accepted by both parties.
3. Drawing up and signing the document
Once the terms have been agreed, a document setting out the mutual agreement to terminate the employment contract is drawn up. This document must be in writing and contain all the agreed terms and the signatures of both parties, which confirms their consent to ending the contract.
Formal requirements
Written form
The document terminating the contract by mutual agreement must be drawn up in writing. This is essential for the validity of the agreement and constitutes proof of both parties' consent to ending the employment relationship.
Signatures of both parties
The declarations of intent must be signed by the employee and the employer. These signatures confirm that both parties agree to the terms of the contract termination and to ending the cooperation itself.
Terminating an employment contract by mutual agreement is a flexible tool that allows the employment relationship to be ended in a way tailored to the needs of both parties, without having to observe a notice period. However, it requires precise agreement on the terms and the preparation of appropriate documentation.
Advantages and disadvantages of terminating a contract by mutual agreement
Terminating an employment contract by mutual agreement is a popular way of ending the employment relationship that brings both benefits and certain challenges. Let's take a closer look at the advantages and disadvantages of this solution, taking into account key aspects such as the Polish Labour Code, the initiative of the employee and the employer, and the legal and financial consequences.
Advantages of terminating a contract by mutual agreement
- Flexibility: Mutual agreement allows the terms of ending the contract to be tailored to the individual needs of both parties to the employment relationship. The employee and the employer can negotiate the termination date, any severance pay and other benefits.
- No notice period: When an employment contract is terminated by mutual agreement, no notice period applies, which allows the employment relationship to end immediately.
- Positive impact on the employment certificate: Termination by mutual agreement does not involve any negative entries in the employment certificate, which can be beneficial when looking for new employment.
- Right to benefits: An employee who has terminated their employment contract by mutual agreement may be entitled to unemployment benefit, provided they meet the relevant criteria set by the labour office.
- Benefits for the employer: The employer can end the employment relationship with the employee immediately, without having to observe a notice period, which can be beneficial in situations requiring a quick resolution of staffing issues.
- Minimising conflicts: Mutual agreement minimises the risk of conflicts and legal disputes related to terminating the employment contract, which can reduce the costs associated with potential court proceedings.
Disadvantages of terminating a contract by mutual agreement
- The requirement of both parties' consent: Terminating an employment contract by mutual agreement requires the consent of both the employee and the employer. A lack of agreement may prevent the contract from being ended in this way, which is not required in the case of unilateral termination with notice.
- Risk of losing severance pay: The employee may lose the right to severance pay that would be due in the case of termination with a notice period, particularly in the case of collective redundancies or redundancies for reasons not attributable to the employee.
- Additional costs for the employer: The employer may be obliged to pay additional benefits or severance pay if such terms are agreed in the mutual agreement, which may involve additional costs.
Terminating a contract by mutual agreement is a solution that can bring many benefits to both the employee and the employer, offering flexibility and the possibility of avoiding a lengthy notice period. However, it requires the consent of both parties and involves certain challenges, including potential costs and the risk of losing benefits. Therefore, before deciding to end the employment relationship in this way, it is worth carefully weighing up all the pros and cons, taking into account the individual circumstances and needs of each party.
Can an employer refuse to sign a termination by mutual agreement?
Under Article 30 § 1 point 1 of the Polish Labour Code, an employment contract may be terminated by mutual agreement of the parties. This requires the consent of both parties to the employment relationship - both the employee and the employer. This means that neither party can unilaterally impose the ending of the contract on this basis. The employer may therefore refuse to sign a termination by mutual agreement if they consider it not to be in their interest.
Reasons for the employer's refusal:
- No benefit for the employer
The employer may decide that terminating the employment contract without a notice period is not in their interest, especially if the employee is key to the workplace. In such a situation, the employer may prefer a standard termination with notice, which gives them more time to find a replacement.
- The company's operational needs
If the company is going through a key project or a period of intensive work, the employer may need the employee's presence until these activities are completed. In such a case, an immediate termination of the contract could negatively affect the company's operations.
- Financial terms
The employer may refuse to sign the agreement if the financial terms proposed by the employee are too high. The costs associated with severance pay, compensation payments or other benefits may be too great for the company, prompting the employer to refuse.
The negotiation process and alternatives
If the employer refuses, the employee can try to negotiate the terms of the agreement. This may include changing the contract end date, making concessions on benefits or other advantages. The negotiations should aim to find a compromise acceptable to both parties.
If a mutual agreement is not possible, the employee may consider other ways of terminating the employment contract. This may include a standard termination with a notice period, which gives the employer time to prepare for the end of the employment relationship.
Terminating an employment contract by mutual agreement requires the consent of both parties to the employment relationship. The employer has the right to refuse to sign the agreement if they consider it not to be beneficial for the company or not to meet their operational and financial needs. In such situations, negotiations and the search for compromises acceptable to both parties are key. Alternatively, the employee may consider other ways of ending the employment contract in accordance with employment law.
When is a mutual agreement invalid?
Terminating an employment contract by mutual agreement is one of the most frequently chosen ways of ending an employment relationship. Although it is a flexible and beneficial form for both parties, there are situations in which such an agreement may be deemed invalid. Below we present the key issues that may affect the validity of the agreement and the circumstances in which it may be challenged.
1. Lack of written form: If the agreement is not drawn up in writing, it may be deemed invalid. The written form is necessary to ensure clarity and proof that the agreement was concluded and that both parties agreed to its terms
2. Missing signatures of both parties: For a mutual agreement to be valid, it must be signed by both the employer and the employee. The absence of a signature from either party to the contract makes the agreement invalid, because it does not express the will of both parties to end the employment relationship.
3. Coercion and threats: A mutual agreement is invalid if one of the parties concluded it under coercion or threat. Each party must consent to the termination of the contract voluntarily and knowingly (article Możliwe roszczenia pracownika po zawarciu porozumienia stron, available at poradnikprzedsiebiorcy.pl). Forcing an employee to sign the agreement may result in it being annulled by a court.
4. Error: The agreement may be deemed invalid if one of the parties acted under a mistake as to essential circumstances related to concluding the agreement. For example, if the employee was misled about the terms of the contract termination or the legal consequences.
5. The employee being a minor: If the employee is a minor, the agreement may require the consent of a legal guardian. The absence of such consent may make the agreement invalid.
6. Lack of legal capacity: If one of the parties does not have full legal capacity at the time of concluding the agreement, the document may be deemed invalid. This applies to situations where the employee or employer is unable to make a conscious and free decision to end the employment relationship.
7. Breach of protective provisions of employment law: A mutual agreement must not breach the protective provisions of employment law, such as the provisions protecting pregnant women, people in the pre-retirement protection period or employees on sick leave. Concluding an agreement in breach of these provisions may result in its invalidity.
8. Substituting for termination with notice: A mutual agreement must not be used as a way of circumventing the regulations on terminating an employment contract with notice. If the agreement was concluded solely to avoid the formal and procedural requirements associated with termination with notice, it may be deemed invalid.
Summary
Ending the employment relationship by mutual agreement is a flexible form of terminating an employment contract without notice, which requires the consent of both parties - the employee and the employer. The procedure begins with a request to terminate the contract and includes negotiations and the signing of a written agreement. Any employment contract concluded for an indefinite period can be ended by mutual agreement, without observing a notice period. This is beneficial for both parties, because it allows the formalities associated with termination with notice to be avoided and the terms of ending the employment relationship to be tailored to individual needs. The disadvantage is the need for both parties' consent and the risk of losing certain benefits. The employer may refuse to sign the agreement if they consider it unfavourable. The agreement is invalid if it breaches employment law or was concluded under coercion.
Frequently asked questions (FAQ)
1. Is termination by mutual agreement immediate?
Terminating a contract by mutual agreement can be immediate, provided that both parties - the employee and the employer - agree to such a date for ending the employment relationship. The advantage of this solution is the ability to flexibly adapt the end date of the cooperation to the needs of both parties. The agreement allows the formal notice period to be avoided, which can be beneficial in situations requiring a quick end to the contract. This is particularly useful in the dynamic conditions of the labour market, where an immediate termination of the contract may be necessary.
2. How long does terminating an employment contract by mutual agreement take?
The duration of terminating an employment contract by mutual agreement depends on the arrangements between the employer and the employee. It can take effect immediately or on a date agreed by both parties. No standard notice period applies here, because the employment relationship ends on the basis of mutual consent. The parties can set any date that suits them best, which provides great flexibility. The key is that the agreement is written down and signed by both parties, which formalises the arrangements.
3. Can every employment contract be terminated by mutual agreement?
Yes, every employment contract can be terminated by mutual agreement, regardless of the type of contract (whether it is a fixed-term, indefinite or replacement contract) (article Jak zakończyć współpracę pracodawcy z pracownikiem, available at biznes.gov.pl). The condition is obtaining the consent of both parties - the employee and the employer. An agreement to terminate an employment contract concluded by the joint decision of the parties makes it possible to tailor the terms of ending the cooperation to individual needs and circumstances. When a request to terminate the contract is made, each party must express its will in writing, which ensures transparency and compliance with employment law.
