The world of work is changing and the changes are particularly visible in the services sector. The pandemic has led many employers and employees to re-evaluate their working arrangements and explore the scope to work flexibly. This means that many UK employers are going to have staff working remotely from overseas. Poland is one of the most favourite places especially for hiring software developers. Here are the key legal issues to address if a UK employer wants to hire people in Poland.
Permanent employees based in Poland will be normally entitled to the benefit of Polish employment law, regardless of whether they have an English law contract or a Polish law contract. The fact that they are working remotely for a UK employer will not be relevant.
Many of the protections conferred by Polish law will be familiar to UK employers, since they derive from EU law – for example the laws on discrimination , equal treatment or health & safety regulations. However many elements of the Polish employment contract are different than in the UK. Probably the biggest difference is that the Polish employment contract is usually one page document (because most of the issues are regulated automatically in the Polish Labour Code) while the English employment contract is usually much longer and deals with all the aspects on a case-by-case basis.
The employment contracts in Poland can be terminated by notice given by each party. The termination notice period depends on the period of employment and it is as follows:
- 2 weeks if the employee was employed for less than 6 months
- 1 month if the employee was employed for at least 6 months
- 3 months if the employee was employed for at least 3 years
In case of the contract for indefinite period, the employer’s notice of termination should state the reason justifying the termination. The law in Poland does not provide the list of possible reasons, but according to Polish judicature, the reason should be real, concrete and understandable for employee.
As regards post-termination restrictions in order to protect the employer’s confidential information to which the employee has access during the employment, such clauses are allowed under Polish law and will be binding. However, it has to be remembered that employees subject to non-compete agreements after termination of the employment are entitled to receive compensation for the full duration of the agreement, which must not be lower than 25% of their last salary.
Steps for registering an employee in Poland
In order to register the employee with the tax and social security authorities (ZUS) in Poland, the UK employer needs to have a tax identification number (NIP), which is obtained by applying to the tax authority. Only then the UK employer can register itself with ZUS as a contribution payer.
The application for NIP number can be arranged in Poland by a proxy. The UK employer can grant a power of attorney to lawyers in Poland who can handle the whole process on their own.
The UK employer needs to present its extract from the UK commercial register and the application needs to be signed by authorized people. The tax office should grant the NIP number withing 7 days.
Once the UK employer received the NIP number and once the employment contract is signed, the agent acting for the UK employer in Poland should register the employee with ZUS.
It is also important to know that in Poland, before an employment contract can be signed, a candidate needs to attend a medical examination and present a certificate to their employer. The candidate also needs to attend the health & safety training which should be arranged by the UK employer at the beginning of the employment.
The UK employer needs to cooperate in this respect with the candidate. The UK employer needs to provide the candidate with the referral to the doctor and arrange the health & safety training. The UK employer has to make sure that the documents are properly signed by authorized people and that the Polish NIP number is used in all referrals.
The health & safety training comprises two parts: general training which is covered by external expert and on-the-job training which is covered usually by line manager or HR manager. Because the work is being performed in Poland in accordance with Polish health & safety rules, the training should focus on Polish rules but it should also refer to the UK rules which are applicable to staff working remotely.
Tax and social security
If the Polish employee is employed directly by the UK based employer, Polish employee will be obliged to pay their own tax (the payer of personal income tax on the remuneration will be the employee). In practice, the UK employer pays on behalf of the employee the personal income tax in Poland on the remuneration paid to the Polish employee.
As regards, the social security, the UK employer will be obliged to pay all social insurance contributions in Poland. These amounts need to be calculated on a monthly basis by the Polish accountant while preparing the payroll.
Employment law is constantly on the move. We keep track of the latest employment law changes both in Poland and the UK in order to find the best solutions.