- Business in Poland -

Alternative ways of establishing an employment relationship – beyond the classic employment contract

Beyond employment contracts: alternative legal grounds for employment

Although the employment contract remains the most commonly used basis for establishing an employment relationship in the general perception, the Polish labor law system also provides other, less popular, but still legally significant ways of establishing an employment relationship. According to the Labor Code, an employment contract is only one of the five equivalent sources of establishing an employment relationship. In addition to it, there are also: appointment, election, nomination, and the cooperative employment contract. While these may seem marginal in economic practice, their role – especially in the public and cooperative sectors – is significant and worth a separate discussion.

Appointment as a legal basis for employment in the public sector

Appointment, although it takes the form of a unilateral administrative act, cannot be effectively made without the consent of the person being appointed, as directly stated in Article 11 of the Labor Code. The institution of appointment only occurs in situations where it is explicitly provided by law. However, in practice, the term "appointment" is used in various contexts, not always in accordance with its legal meaning. For example, the mere appointment of a board member of a limited liability company or the rector of a private university does not constitute an appointment under Article 68 of the Labor Code but merely the granting of a position, which may – but does not have to – be associated with employment on another basis, such as an employment contract or a civil law contract. Appointment as a source of the employment relationship is recognized, among others, in the case of directors of state-owned enterprises, directors of cultural institutions, secretaries and treasurers of local government units, or directors of national parks. In recent years, there has been an increase in the significance of this form of employment, particularly in the public sector, where it is clearly preferred in specific legislatively defined situations.

Employment by election: a unique form in local government

Another way of establishing an employment relationship is through election, which – although seemingly distant from typical forms of employment – functions realistically within local government units. According to Article 73 of the Labor Code, election can serve as the basis for employment if it is associated with the obligation to perform work in the capacity of an employee. In practice, this primarily applies to individuals holding executive positions in local governments – such as mayors, city presidents, members of the regional or county boards, provided that the statute of a given unit foresees employment of these individuals based on election. An important feature of this form of employment is that there is no separate employment contract – the election itself creates an employment relationship, which ends when the mandate expires. Due to its temporality and connection to the term of office, this form is not popular in the private sector, even though it could formally be used, for example, for members of the boards of companies.

Nomination-based employment: rules, stability, and expectations

A specific category of employment is also the employment relationship established by nomination. Its source is separate regulations – so-called service regulations – which specifically govern the employment conditions of certain groups of employees, most often performing public tasks. Nomination concerns, among others, civil service employees, teachers, judges, prosecutors, employees of the Supreme Audit Office, consular services, or other employees of state and local government institutions. Although the form of nomination originates from administrative law traditions, it is considered by the Labor Code as a form of labor law commitment. Employment in this formula is associated with greater stability – the possibility of terminating the employment relationship is limited and strictly defined by law – but also with higher expectations from the employee, often including their conduct outside of work. Nominated employees can be transferred to other places of work or positions by the decision of their superior, are subject to a separate disciplinary responsibility procedure, and in some cases, their rights to join trade unions or engage in political activity are limited or excluded.

Cooperative employment contracts: workers as cooperative members

The last of the lesser-known but significant sources of employment relationships is the cooperative employment contract. It applies exclusively in worker cooperatives and can only be concluded between a cooperative member and the cooperative itself. The characteristic feature of this form of employment is its close connection to the membership relationship in the cooperative, meaning that the right to employment stems from the mere fact of being a member of the cooperative. Employment occurs on the basis of the cooperative employment contract – usually for an indefinite period, without the possibility of concluding a probationary contract. The distinctiveness of this form of employment lies, among other things, in the stronger protection of the durability of the employment relationship and the special position of the employee as a co-manager of the cooperative. A cooperative member even has the right to seek employment through legal action if the cooperative refuses to establish an employment relationship. Such far-reaching rights – the obligation to employ a specific person by a specific employer – is an absolute exception in labor law.