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Labour market 2026 - falling employment and what it means

Falling employment and slowing wage growth in 2026. What does it mean for employers and employees? Learn the legal consequences and contact us!

6 min readGlobal Tax Partners team
Labour market 2026 - falling employment and what it means

The labour market in February 2026 - worrying data from Statistics Poland (GUS)

The latest data from Statistics Poland (GUS) for February 2026 confirm a trend that experts have been observing for several months - the labour market in Poland is clearly losing momentum. The average gross salary in the enterprise sector was PLN 9,135.69, an increase of 6.1% year on year. Although wages are still rising in nominal terms, the pace of growth disappointed analysts, who in the PAP Biznes consensus had forecast growth of 6.6%.

At the same time, employment in the enterprise sector fell by 0.8% year on year, reaching 6,398.1 thousand people. This is another consecutive month in which companies are reducing the number of positions. The data form a consistent picture - business owners are taking an increasingly cautious approach to staffing policy, and the period of rapid employment growth and fast-rising wages is slowly becoming a thing of the past.

For employees, employers and law firms advising both sides of the employment relationship, these changes have very concrete consequences. A cooling labour market is not just a statistic - it means real decisions on collective redundancies, restructuring and renegotiation of employment terms.

Falling employment - what rights do employees have?

When companies reduce the number of positions, employees should be aware of their rights under the Labour Code and the act on special rules for terminating employment relationships for reasons not attributable to employees. A year-on-year fall in employment of 0.8% across the whole enterprise sector may seem small, but in practice it means thousands of people who have lost, or may lose, their jobs.

An employee whose contract is terminated for reasons attributable to the employer has a number of rights. First of all, they are entitled to severance pay, the amount of which depends on their length of service with the given employer. In addition, the employer must follow consultation procedures with trade unions, where these operate at the workplace.

The key employee entitlements in the event of redundancies include:

It is worth remembering that every situation requires an individual legal analysis. An employer who fails to meet the formal requirements risks compensation claims from dismissed employees.

Employer obligations as the labour market cools

From an employer's perspective, falling employment in the enterprise sector and slowing wage growth are a signal that the economic environment calls for particular caution in managing staff. Companies planning an employment restructuring must remember a number of obligations arising from labour law.

First of all, it is crucial to classify the planned staffing changes correctly. If, within a period of 30 days, an employer with at least 20 employees intends to terminate the employment of a specified number of people, the collective redundancy procedure may have to be applied. This involves an obligation to notify the labour office, consult trade unions or employee representatives, and conclude an agreement setting out the rules for dealing with the employees being dismissed.

The issue of selecting employees for dismissal is also extremely important. The criteria must be objective, non-discriminatory and verifiable. Labour courts have repeatedly ruled that the employer must state specific, genuine reasons for the dismissal, and that the absence or pretence of such reasons results in the notice being held ineffective.

The data for February 2026 also show that month-on-month wage growth was only 1.5%, whereas the consensus assumed 2.0%. This may mean that companies are starting to limit not only the number of employees but also the pace of pay rises. Employers should also remember that reducing pay requires a change of terms notice or an agreement between the parties - a unilateral decision to cut pay is unlawful.

Slowing wage growth and labour law - the outlook for 2026

Wage growth of 6.1% year on year - although still above inflation - clearly departs from the double-digit growth seen in 2023 and 2024. For employees, this means that their negotiating power in pay rise discussions is gradually weakening, while employers gain a stronger position in shaping pay policy.

From a legal point of view, slower wage growth does not change the fundamental rules on remunerating employees. The minimum wage remains guaranteed by law and is indexed regardless of market conditions. Employees employed under employment contracts have the right to timely payment of their salary, and any delays may result in employer liability, including statutory interest for late payment.

It is worth noting the growing importance of indexation clauses in employment contracts and managerial contracts. Where wage growth is unpredictable, both employers and employees may seek to protect their interests through appropriate contractual provisions. Professional legal advice when negotiating employment terms helps avoid future disputes and gives both parties clear rules of the game.

What next for the labour market? When to consult a lawyer

Warning signs for employees

If your employer has announced a restructuring, is freezing recruitment or is starting to renegotiate employment terms, it is worth seeking legal advice as soon as possible. An early consultation allows you to assess whether the employer's planned actions are lawful and to protect your interests appropriately - both as regards severance pay and a potential appeal against the notice to the labour court.

Warning signs for employers

Companies planning to reduce headcount should ensure professional legal preparation at every stage of the process. Procedural errors in collective redundancies, incorrect selection criteria or a lack of consultation with the employee side can lead to costly court proceedings and significantly increase the total cost of restructuring.

The GUS data for February 2026 clearly indicate that the labour market is entering a new phase. Both falling employment and slowing wage growth are signals that call for a considered response - not only economic, but above all legal.

Do you need legal support in employment law? Whether you are an employee worried about dismissal or an employer planning to optimise staffing - contact our firm. We will help you protect your rights and carry out any staffing changes in line with the applicable regulations. An initial consultation will allow us to assess your situation and plan the next steps.

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