22.01.2025

WHAT DOES "GROUP OF ENTERPRISES" MEAN IN DETERMINING SENIORITY?

Upon termination of the employment relationship, after the worker or employee has acquired the right to a pension for length of service and age, regardless of the reason for the termination, he is entitled to compensation from the employer in the amount of his gross remuneration for a period of 2 months, and if has acquired at the same employer or in the same group of enterprises 10 years of work experience in the last 20 years - for compensation in the amount of his gross remuneration for a period of 6 months.

The implementation of these amended 2020 texts of the legislation caused a wave of questions from workers who are about to retire for insurance length and age.

The questions are mostly related to what it actually means for the person to have worked for 10 of the last 20 years for the same employer or in the same group of enterprises. Is there a legal definition in legislation of a "group of enterprises" and how should it be interpreted?

After the amendment, the legal definition of the term "group of enterprises" in the Labor Code applies in all cases where the term is used in the normative act. Therefore, the term "group of enterprises" used in the provision of the Labor Code has the meaning defined in the Additional Provisions of the Law on Labor Migration and Labor Mobility.

According to them, "Group of enterprises" is two or more related enterprises, such that: one enterprise, in relation to the other enterprise, directly or indirectly owns a preferential share of the subscribed capital of the second enterprise; controls the majority of votes related to the share capital issued by the second entity; has the right to appoint more than half of the members of the administrative, management or supervisory body of the second undertaking, or the undertakings are under the sole management of the parent undertaking.'

The right to compensation in the amount of the gross labor remuneration for a period of 6 months arises for employees who have acquired a total length of service of 10 years or more in the last 20 years with the same employer or in the same group of enterprises.

The expression "in the last 20 years" means that the assessment of the presence of at least 10 years of work experience acquired at the same employer or at different employers, but from the same group of enterprises, is made within 20 years , and that these should be the "last" 20 calendar years as of the date of termination of the employment contract.

If the worker or employee in the last 20 years of his employment has 10 years of employment with two different employers who are "connected", he is entitled to compensation in the amount of 6 gross wages. This is the case, for example, when one enterprise, in relation to the other enterprise, directly or indirectly owns a preferential share of the subscribed capital of the second enterprise.

The length of service can be acquired during the last 20 years before the termination of the employment relationship, during which the worker or employee worked with or without interruption for the same employer. In addition, the specified 10 years in the last 20 years can also be acquired with different employers, as long as they are in the "same group of enterprises".

When more than 10 years of the worker's or employee's work experience in the last 20 years were not acquired with the same employer, but with two or more different employers who are not from the same group of enterprises, the benefit is for a period of 2 months.

When not less than 10 years of the worker's or employee's work experience are acquired with the same employer or with different employers, but from the same group of enterprises, the benefit is for a period of 6 months.

Reference:

Art. 222, para. 3 of the Labor Code

paragraph 1, item 5 of the Additional Provisions of the Labor Migration and Labor Mobility Act