Termination of an employment contract by mutual consent of the parties

termination of the employment contract
Piotr Kłodziński|
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Termination of the employment contract by mutual consent of the parties is the most advantageous and fastest option for terminating the employment relationship. It allows you to terminate the contract at any time, without the need to wait for the statutory notice period to expire.

Employment relationship

What exactly is an employment relationship and what does it result from? It is a legal relationship between an employer and an employee, subject to regulations under the Labor Code and the Civil Code. As part of the employment relationship, art. 22 kp§ 1. (..) the employee undertakes to perform work of a specific type for the employer and under his management and at the place and time designated by the employer, and the employer - to employ the employee for remuneration.

The establishment of an employment relationship is defined by the date included in the contract indicating the day of commencement of work; if there is no such date, the date of conclusion of the contract is deemed to be the commencement date.

Contract of employment

The basic form of establishing a relationship is concluding an employment contract. It is possible to conclude the indicated contract for a specified or indefinite period, or, as previously mentioned, the time necessary to perform a specific job.

As a rule, an employment contract must be in writing. Moreover, it should be concluded before the employee is allowed to perform the duties assigned to him. The contract should therefore include:

  • type of work,
  • remuneration (with indication of remuneration components),
  • time dimension,
  • indication of the start date of work.

Termination of the employment contract

Termination of the employment contract is quite a common phenomenon, but it still often has negative connotations. However, it should be remembered that it does not always have to have negative consequences.

Under the law, it is nothing more than unilateral termination of the contract, consisting in submitting a declaration indicating the desire to end the employment relationship. Both the employee and the employer can submit a notice of termination, so it may be the act of one of the parties.

However, it may also be a joint decision of both partiesin such a case, we speak incorrectly about termination by mutual consent, and correctly about "termination of the employment contract by mutual consent." Some people add "common" to emphasize that it is a bilateral activity that requires consensus - that is, mutual consent.  

Therefore, the concept of notice or, more broadly, termination of the employment relationship should not necessarily be associated only with the event colloquially known as "dismissal", because it may also be "putting together paperwork" or "concluding a deal". 

Labor law, distinguishes several forms of termination of the contract, i.e. by agreement of the parties; by a declaration by one of the parties with a notice period; by a declaration of one of the parties without notice; and also in connection with the passage of time for which the contract was concluded (in the case of fixed-term contracts).

Termination of an employment contract by mutual consent of the parties

The simplest form is termination of the employment contract by mutual consent of the parties. However, it should be remembered that termination of the contract in this form is treated as a possibility, therefore, in this case, we may encounter a refusal from one of the parties.

The information prepared below will explain how to correctly formulate a proposal to terminate an employment contract by mutual consent and what is worth remembering before submitting such a proposal.

In accordance with the labor code art. thirty, termination of the employment contract by agreement of the parties, takes place at the will of the employee or employer, by mutually agreeing on the conditions for terminating the employment relationship, the so-called mutuality. 

It should be emphasized that it only concerns the form of termination of the contract. The process of submitting a solution proposal itself is a unilateral activity, so it is one of the parties who initiates the desire to dissolve the relationship in the indicated form. Therefore, to illustrate, when we receive from the employer a proposal to terminate the employment contract by mutual consent of the parties, submitted in writing or orally or by e-mail, there is not a necessity, but only the possibility of responding to it.

Lack of response is tantamount to refusal to accept the proposed conditions. A similar situation applies to the employer when he receives from the employee a proposal to terminate the employment contract by mutual consent. The employer may also fail to respond, approve the proposed terms, propose their modification, or refuse to conclude an agreement to terminate the employment contract. In the most common case of consent, however, a note is enough "I agree" on received termination of the contract signed and dated. 

For example: The employer came to Krzysztof Nowak and offered to terminate his employment by agreement of the parties. The employee read the content of the agreement and came to the conclusion that he was not satisfied with its content or the fact of dismissal. He works well, earns well and does his job properly - so he knows that it will not be easy for the employer to terminate such an employment contract in accordance with the law. Therefore he refused to accept the terms. The employer did not decide to dismiss him from work.

An obligatory part of the termination of the contract in this form is a note specifying the manner in which the indicated parties agreed to terminate the contract, e.g. "by agreement of the parties."

Termination of an employment contract by mutual consent of the parties. Determining the deadline

Moreover, just as when establishing an employment relationship, a deadline must be set, indicating the day of termination of the employment relationship; if there is no such deadline, the date of concluding the agreement is considered to be the deadline. (in accordance with the judgment of the Supreme Court of January 11, 2001, reference number I PKN 844/00).

Concluding an agreement to terminate an employment contract does not always lead to the termination of the employment relationship between the employee and the employer; however, there is nothing to prevent the parties from setting a separate date for the termination of the employment relationship, on the contrary, it is quite a common practice.

For example: Jan Kowalski came to his boss on September 15, 2020. He said he was going to Brazil for New Year's Eve and would like to stay there permanently. It wasn't a true statement, he actually wanted to take care of his newborn granddaughter, but he was wrongly ashamed to admit it. The employer, motivated by jealousy and guided by the feeling that the employee he hired was not true, did not agree to termination of the employment contract by mutual consent of the parties from December 30, 2020, Jan Kowalski submitted a notice of termination with a 3-month notice period and therefore the employment contract will be terminated on December 31, 2020. If Jan told the truth, the parties to the employment contract (Employer and Employee) could agree to terminate the contract on December 31, 2020 or on any other date chosen. However, this must be a date mutually agreed by both parties to the contract.

In such key matters, however, it is better to seek experienced advice first legal advisor, which will advise us on what options we have to terminate the employment contract in a given situation, or what to do with the proposal to terminate the employment contract by mutual consent of the parties.

The several-month remuneration that can often be saved thanks to professional advice is much more income than the cost of an hour's advice from an experienced legal advisor.

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