Employment Contracts in Poland: UoP, UZ, and Temp Contracts from an EOR perspective

When hiring employees in Poland, you’ll encounter three main types of employment contracts: the standard employment contract (Umowa o Prace, often abbreviated as UoP), the specific task contract (Umowa Zlecenie, or UZ), and the temporary employment contract (Temp Contract). Foreign companies must ensure they choose the right type of agreement for each role and comply with Polish Labour Law.

Umowa o Prace (UoP): The Standard Employment Contract

The UoP is Poland’s most common and traditional form of employment contract. It establishes a formal employment relationship with greater employee protection and employer obligations.

Key characteristics of a UoP include:

• Subordination: The employee performs work under the direction and supervision of the employer at a specific place and time.
• Set Working Hours: Defines specific working hours per day and week.
• Entitlement to Benefits: Includes paid holiday leave, sick leave, maternity leave, and protection against unfair dismissal.
• Mandatory Social Insurance: Employers must pay social insurance contributions (pension, disability, sickness, accident insurance) and health insurance.
• Stronger Termination Protection: Subject to specific regulations, including notice periods and justifiable reasons for termination.

The UoP is ideal for individuals who perform ongoing tasks as part of their core team and are integrated into their company’s structure. EORs in Poland and their clients will often use this type of contract for white-collar employees, as there’s no duration limitation. From an EOR perspective, the UoP offers the most robust legal framework for long-term engagements, providing security for both the employee and the client company. For employees who require residence or work permits in Poland, the UoP option is often the only available choice.

Umowa Zlecenie (UZ): The Specific Task Contract

The UZ is a civil law contract used for specific tasks or projects. It offers more flexibility but fewer employment rights than a UoP.

Key characteristics of a UZ include:

• Focus on Outcome: Emphasis on task completion rather than set hours under supervision.
• Flexible Working Arrangements: Contractors have freedom in how and when to complete tasks.
• Fewer Employment Rights: Limited entitlement to paid leave and protections against termination.
• Social Insurance Obligations: Generally mandatory, but complex depending on other employment.
• Easier Termination: Termination terms are based on the contract agreement.

The UZ suits external contractors for projects, short-term assignments, or tasks not requiring ongoing supervision. For EOR clients, the UZ can be a good option for employees under 26 years old, for project-based work or for engaging independent contractors where the relationship is clearly defined by deliverables rather than ongoing employment.

Temporary Employment Contract (Agency contract with limited duration)

The Temp Contract is commonly used by Employer of Record (EOR) providers as it allows for the inclusion of a “user-employer” as a third party in the employment agreement with the employee. This contract type is, however, limited in duration and is restricted to use when residence or work permits are required for the employee.

Key characteristics of a Temp Contract include:

• Triangular Relationship: Involves the employee, the EOR provider, and a user-employer.
• Limited Duration: Designed for temporary roles with a precise end date or limited timeframe, with a maximum of 18 months.
• Flexible Engagements: Suitable for seasonal work, project-based roles, or temporary cover for absent employees.
• Employee Rights: Depending on the contract’s terms and applicable laws, employees may have certain rights similar to Uop.

The Temp Contract is particularly useful for roles requiring flexibility concerning employment duration and management structure. This structure allows clients to scale their workforce up or down efficiently without the long-term commitments of a standard UoP.  Important to note here is that these contracts cannot be used as a basis for residence and work permit processes.

Choosing the Right Contract

When deciding between UoP, UZ, and Temp Contracts, consider the following:

• Nature of the Work: Ongoing and integrated roles (UoP), specific tasks with defined outcomes (UZ), or temporary assignments with limited duration (Temp).
• Level of Supervision and Control: Direct supervision and set hours (UoP), independent work with flexible hours (UZ), or user-employer involvement (Temp).
• Duration of Engagement: Long-term roles (UoP), short-term projects (UZ), or fixed temporary roles (Temp).
• Rights and Protections: Consider the employee benefits and legal protections required for the role.
• Residence and Work Permits: Only the UoP contract is a feasible option when the employee requires residence and work permits.

Misclassifying an employment relationship can have legal and financial consequences. It’s essential to assess the nature of the work accurately and consult legal advice if unsure which type of contract is appropriate. A UoP is often the correct choice for most white-collar roles, while UZ and Temp Contracts serve specific project-based or temporary needs. As an EOR, the EOR provider’s role is to guide clients through these decisions, ensuring compliance and the best fit for their talent strategy in Poland.