When is an employer not required to pay severance?

The obligation to pay severance when dismissing an employee has been fuelling public debate for years and is often a point of dispute between employer and employee. It turns out, however, that there are situations in which there is no obligation to pay workplace severance after the employment relationship ends or expires. Find out when this is possible.

Which regulations govern the obligation to pay an employee severance?

In Poland, the provisions of two documents are taken into account, which regulate the rules for terminating employment relationships with employees, as well as the related obligations and rights of employers and the employees themselves. We recommend carefully reviewing the provisions of:

• the Act on Special Rules for Terminating Employment Relationships with Employees for Reasons Not Attributable to Employees of 13 March 2003, together with subsequent amendments,

• the Labour Code Act of 26 June 1974, together with subsequent amendments.

When is an employer not required to pay severance to an employee?

We have gathered for you the most important information and sample situations in which an employer is not required to pay severance to a dismissed employee. This is useful knowledge both from the perspective of the person doing the hiring and the person being hired.

Dismissals in a company employing fewer than 20 people

The obligation to pay severance does not arise in the case of companies employing fewer than 20 employees, whereby both those working full-time and part-time are counted. Temporary workers are not added to the limit of 20 employees. If an employer dismisses an employee in a small enterprise, they are not required to pay them severance regardless of length of service or the reasons for terminating the employment relationship.

Individual dismissal for reasons not solely attributable to the employer

Also in the case of companies with more than 20 employees, the obligation to pay severance may not arise in an individual dismissal. This happens when the reason for terminating the contract is not solely attributable to the employer. Accordingly, severance for an individual dismissal is not paid if the dismissal occurred, for example, through the fault of the employee.

Termination of the employment contract by the employee

An employee who submits a notice of termination of the employment contract, regardless of length of service, loses the right to receive severance. This is related to the fact that the employment relationship ends for reasons independent of the employer and is dictated by the will of the employee themselves. Accordingly, the latter is not entitled to severance, which they might be owed in the case of dismissal through the employer's fault. Termination of the contract by the employee itself may have various grounds and most often occurs as a result of:

• dissatisfaction with the terms of employment,

• relocation or personal reasons,

• changing jobs on one's own initiative.

Expiry of the contract upon the lapse of its term

Another example of a situation in which severance is not owed to an employee is the expiry of the contract in accordance with the lapse of its term. If the employment contract was signed for a fixed term and the employer decided not to extend it, then the employment relationship ends with the last day of the effective agreement. In such a situation, the company does not pay severance.

Dismissal of an employee working under a contract for specific work or a contract of mandate

In accordance with applicable regulations, severance does not apply in the case of employees working on the basis of civil-law contracts, including a contract for specific work or a contract of mandate. Dismissing such a worker does not impose on the employer an obligation to pay additional funds by way of severance.

Does the death of an employee remove the obligation to pay severance?

We face an interesting issue in the case of an employee's death during an ongoing employment relationship based on an employment contract. In such a situation, classic severance does not apply. The employer, however, is obliged to pay a death benefit (severance) to the closest family of the deceased. Its amount is:

• one month's remuneration for length of service up to 10 years,

• three months' remuneration for length of service from 10 to 15 years,

• six months' remuneration for length of service over 15 years.

The obligation to pay severance in collective dismissals

The obligation to pay severance always arises in the case of collective dismissals, and the amount of funds paid to the employee depends on their length of service at the given company. In accordance with the regulations in force in 2026, these are:

• one month's remuneration for length of service up to 2 years,

• two months' remuneration for length of service from 2 to 8 years,

• three months' remuneration for length of service over 8 years.

At the same time, the amount of the severance paid may not exceed 15 times the minimum wage for work in the given calendar year.

The obligation to pay severance in an individual dismissal

In accordance with the interpretation applied by the National Labour Inspectorate on the basis of applicable regulations, the obligation to pay severance may also arise in an individual dismissal. For this to happen, three conditions must be met, namely:

• the enterprise employs more than 20 employees at the moment the notice is served,

• the contract is terminated as a result of the employer giving notice or by mutual agreement of the parties,

• the employment relationship is terminated for reasons attributable to the employer and not concerning the employee.

Any doubts regarding the obligation to pay severance are worth discussing with an official in order to fulfil your legal obligation and limit the risk of consequences, including financial sanctions. As an employer, however, you must be aware that in many situations there is no need to pay severance.

Sources:

• Wojciech Napora, Komu przysługuje odprawa pieniężna po zwolnieniu z pracy?, https://zielonalinia.gov.pl/komu-przysluguje-odprawa-pieniezna/ (accessed 11.02.2026)

• Wynagrodzenie za pracę i inne świadczenia związane z pracą, https://www.gov.pl/web/rodzina/wynagrodzenie-za-prace-i-inne-swiadczenia-zwiazane-z-praca (accessed 11.02.2026)