Group layoffs are an unusual form of employment termination. In this article, we will guide you through the whole process step by step. Find out what group layoffs consist of and what are the rights and obligations of the parties. We also explain the issues of redundancy payment, notice periods and sick leaves in the context of group layoffs.
What are group layoffs?
Group layoffs are a special type of employment termination. Employers use it to downsize when it is necessary, for reasons unrelated to employees. The procedure for group layoffs is strictly regulated by law. One of the crucial regulations is the Act of 13 March 2003 on Group Layoffs. It aims to protect the rights of employees.
Conditions for applying the group layoff procedure
To initiate the group layoff procedure, the following conditions must be met:
1. The employer must hire at least 20 people.
- All employees are included, regardless of their working hours, except for temporary workers.
2. Factors independent of the employee occur, such as company bankruptcy.
3. The threshold for the number of people dismissed in a period not exceeding 30 days has been maintained, which is at least:
- 10 employees when the company hires fewer than 100 employees,
- 10% of employees when the company hires at least 100 but fewer than 300 employees,
- 30 employees when the company hires at least 300 or more employees.
Reasons for initiating group layoffs
The implementation of the group layoff procedure may occur for reasons attributable to the employer. The possible reasons include:
- restructuring of a company,
- liquidation of the workplace,
- technological changes,
- deterioration of the company’s economic situation.
Individuals protected from group layoffs
There is a group of individuals who are protected and cannot be laid off in collective redundancy. These include:
- Employees of pre-retirement age.
- Pregnant women.
- Employees on certain types of leave:
- maternity leave,
- other leave granted under the terms of the maternity leave,
- parental leave,
- paternity leave.
- Trade union officials and social labour inspectors.
- Employees called up for military service.
An employer may terminate the existing terms of employment or payment of protected employees. This usually means:
- transferring the employee to another position,
- or reducing the employee’s salary. In such a case, he will be entitled to a compensatory allowance until the end of the protection period.
Procedure for initiating group layoffs
Implementing group layoffs imposes several obligations on the employer. The procedure looks as follows:
| Stage | Description |
| Consultations | Employer consults the intention to conduct collective redundancies with trade unions or employee representatives. |
| Notifications | The employer notifies in writing: the District Labor Office, trade unions or employee representatives, and each employee affected by the group layoff. |
| Notice period | The employee receives a notice, and its length depends on the length of his service. |
| Redundancy payment | The employee is entitled to redundancy payment, the amount of which depends on the length of employment. |
| Release from work duties | The employer may release the employee from the duty to work during the notice period while retaining the right to remuneration. |
The employer is obliged to notify in writing about:
- the reasons for the planned group layoff,
- the number of employed workers and professional groups to which they belong,
- groups of employees affected by the intended layoff,
- the period during which the group layoff will take place,
- criteria for classifying employees for dismissal,
- order of dismissing employees,
- proposals for resolving employment matters related to layoff, e.g., financial benefits.
Group layoffs and redundancy payment
Employers must offer redundancy payments to employees affected by group layoffs. Their value depends on the length of the employee’s service.
| Redundancy payment – equivalent to: | The length of employment |
| 1-month salary | Less than 2 years |
| 2-month salary | Between 2 to 8 years |
| 3-month salary | More than 8 years |
The above table represents the minimum amount of redundancy payment specified by law. Internal regulations may provide for different amounts of severance pay in case of group layoffs. Such internal arrangements may include e.g. collective labour agreements. The maximum amount of redundancy payment is also restricted. It may not exceed 15 times the minimum salary applicable on the day of termination of employment.
Notice period in case of group layoffs
The notice period for group layoffs depends on the employee’s length of service. It is as follows:
| Length of employment | Notice period |
| Less than 2 years | At least 30 days |
| From 2 to 5 years | At least 33 days |
| From 5 to 8 years | At least 37 days |
| More than 8 years | At least 41 days |
The notice period includes:
- annual leave period,
- other periods of absence from work for which the employee receives remuneration.
The employer may release the employee from his duties during the notice period, while retaining the right to remuneration. In exceptional cases, he may shorten the notice period to 1 month with the employee’s consent. In this case, the employee is entitled to compensation. It is equal to the salary for the remaining part of the notice period.
Group layoffs and justified absence of an employee
The protection from group layoffs of an employee on leave or sick leave involves a prohibition on terminating employment contracts until the expiration of periods allowing termination of the contract without notice.
In exceptional situations, the employer may:
- Terminate employment contracts with notice:
- when sick leave lasts for at least 3 months,
- in the case of other justified absences, when the period entitling to termination without notice has expired. For sick leave, this means exhaustion of 182 days of sickness allowance and 3 months of rehabilitation allowance.
- Terminate the terms of work and pay at any time during the justified absence of the employee.
Rules for re-employment after group layoffs
Persons dismissed as a result of group layoffs have priority for re-employment with the previous entity. This is a right, not a guarantee of automatic return to the same position. The employer may propose other conditions that the employee may accept or reject.
The conditions for such re-employment provide that:
- the employer must re-employ workers in the same professional group,
- the dismissed employee must express a desire to return to work for the same employer within a year of dismissal,
- no more than 15 months may pass since the termination of employment as part of group layoffs.
Group layoffs – summary
Group layoffs are a formal process of terminating employment for reasons not attributable to the employee. Knowing the procedure and rights governing it can help mitigate the negative consequences of such situations.
If you find the topic of group layoffs interesting and want to know more about it, do not hesitate to contact us. Experts from our law firm are ready to support you.
FAQ – Frequently Asked Questions about: Group layoffs
Who can initiate group layoffs?
Group layoffs can be carried out by an employer hiring at least 20 employees in full-time equivalents.
What are the reasons for group layoffs?
The reasons for group layoffs may include economic, technological, or organizational factors.
What steps must the employer take before group layoffs?
The employer must consult with trade unions or employee representatives about the intention to start group layoffs. Then, the employer must notify in writing:
the district labour office
trade unions or employee representatives
each employee affected by the redundancies
What is the notice period in the case of collective redundancies?
The notice period depends on the length of the employee’s service and it is:
At least 30 days – for employees hired for less than 2 years.
At least 33 days – for employees hired for 2 to 5 years.
At least 37 days – for employees hired for 5 to 8 years.
At least 41 days – for employees hired for more than 8 years.
What redundancy payment is due to an employee affected by group layoffs?
The value of redundancy payment depends on the employee’s length of service and is an equivalent of :
1-month salary – for employees hired for less than 2 years.
2-month salary – for employees hired for 2 to 5 years.
3-month salary – for employees hired for 5 to 8 years.
4-month salary – for employees hired for more than 8 years.
Can an employee affected by group layoffs be released from the duty to work during the notice period?
Yes, the employer may release the employee from work during the notice period, while retaining the right to remuneration.
Where can an employee seek help in case of group layoffs?
An employee seeking help can turn to:
trade unions
employee representatives
a lawyer
District Labor Office
What other benefits are due to an employee affected by group layoffs?
An employee affected by group layoffs may be entitled to other benefits, such as:
compensation for unused annual leave
employment certificate
certificate of entitlement to benefits
Where can I find more information about group layoffs?
More information about layoffs can be found on the websites of:
Ministry of Family and Social Policy
National Labour Inspectorate
Trade unions
What are the changes in the regulations concerning group layoffs since 2023?
Since 2023, a series of changes have been introduced in the regulations concerning group layoffs. These changes include, among others:
increasing the minimum employment threshold to 20 employees
introducing the obligation to consult with employee representatives
increasing the amount of redundancy payment.
