Current regulations on fees in employment cases
Under the previous provisions of the 2005 Act on Court Costs in Civil Cases, fees in employment cases were determined based on the value of the claim. Where this value exceeded PLN 50,000, both parties – the employer and the employee – were required to pay a proportional fee on all fee-liable pleadings. This approach led to situations where employees chose not to pursue their claims for fear of high court costs.
The new framework for court fees under the Act of 7 July 2023
A revolution in court fees came with the Act of 7 July 2023 amending the Act – Code of Civil Procedure, the Act – Law on the Organisation of Common Courts, the Act – Code of Criminal Procedure and certain other Acts. The aforementioned Act introduced a number of changes to the existing legal provisions, including those relating to fees in employment cases. In accordance with the amendment, Article 35(1) of the Act on Court Fees in Civil Cases will provide that, in labour law cases, a basic fee shall be charged to the employer solely in respect of appeals, complaints, cassation appeals and applications for a declaration of the unlawfulness of a final judgment. However, in cases where the value of the subject matter of the dispute exceeds PLN 50,000, a fee will be charged to both the employee and the employer on the portion of the value of the subject matter of the dispute exceeding that amount. This fee will amount to 5% of the value of the subject matter of the dispute, not exceeding PLN 200,000.
Thus, claims in employment cases will be exempt from fees. This change will come into force on 28 September 2023.
How to determine the value of the matter in dispute?
The key to determining the fee is correctly establishing the value of the matter in dispute. The provisions of Article 23(1) of the Code of Civil Procedure are helpful here, as they stipulate that the value of the matter in dispute in the case of claims relating to an employment relationship is derived from the total remuneration for the disputed period, but not exceeding one year. This is particularly important for fixed-term contracts. For permanent contracts, we are talking about remuneration for one year.
In other matters, such as overtime or compensation for wrongful disciplinary dismissal, the value will be determined in monetary terms; that is, in cases concerning payment of overtime, it will be the amount we are claiming, whilst in the case of compensation, it will be the amount we are seeking.
Therefore, when appealing against dismissal, if we seek reinstatement, the value of the subject of the dispute under a permanent contract will be the total annual salary, whereas if we seek compensation – the value of the compensation (up to a maximum of three months’ salary).
The above clearly shows that there may have been situations in which an employee, for tax reasons, might have opted to file a claim seeking compensation rather than reinstatement, as the value of the matter in dispute in such situations was simply lower. Following the change, employees will be able to assess more freely which claim they wish to pursue.
Summary:
Reducing financial barriers is clearly in the public interest and promotes development. It removes one of the main obstacles to seeking justice in court. It is worth considering further steps in this direction. Will this solution lead to an increase in the number of court cases? Will the courts be able to cope with a potential rise in caseloads?
The amendment to the Labour Code regarding court fees is a step towards making justice more accessible to employees. It is important that every employee is aware of these changes and takes advantage of the new opportunities afforded by the law. These changes will come into force on 28 September 2023.
She specializes in commercial and civil law. She has gained experience in Warsaw law firms providing comprehensive services to companies and a law firm specializing in labor law. She has extensive experience in corporate consulting. She has participated in mergers and acquisitions at every stage of the process, from pre-transaction legal examination to fulfillment of regulatory requirements related to the transformation process. She prepares and reviews contracts entered into by clients and advises in cases of…
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