New anti-crisis legislation in force

In late November 2013, new anti-crisis legislation came into force in Poland. The new law finally fills the gap left by the expiry in 2011 of temporary anti-crisis legislation introduced in 2009. However, the new legislation is not the result of social dialogue and while employers are generally in favour of the changes, trade unions have been highly critical. The legislative process was eventually completed without union consent.

Anti-crisis legislation before 2012

Poland’s economy did not fall into recession after the 2008 global financial crisis, although its overall economic performance did deteriorate compared with the early post-accession years.

However, in early 2009 the fear of an economic downturn was so overwhelming that the national-level social partners quickly agreed on the Autonomous Anti-crisis Package, which later became the basis of the anti-crisis legislation covered in the Act on Alleviation of Economic Crisis Effects on Employees and Employers.

The legislation was valid until the end of 2011 (PL0909019I) but its impact was minimal since the downturn was minimal and few businesses needed public aid. However, just before the legislation expired, pressure mounted for it to be replaced with measures to boost the national economy.

Government proposal

In early 2013, the government presented draft legislation, the main purpose of which was to protect enterprises facing ‘temporary economic difficulties’ that could be overcome using public funds from the Guaranteed Employee Benefit Fund. In particular, the funds would be allocated for:

  • subsidies to cover partial wages for staff temporarily laid off;
  • compensation for pay lost due reduced working hours;
  • subsidies to help employers to pay mandatory social security contributions for their staff.

The aid would be made available in line with the de minimis rule – the maximum amount of public aid Member State national governments are permitted to give without notifying the EU. It could be granted within 12 months of an agreement being signed between the employer and the local public authority, and paid for up to six months (or, in special cases, paid for up to 12 months within 18 months of the agreement being signed). However, the aid given to each employee may not be more than full unemployment benefit.

The draft legislation also proposes a way in which employers in ‘temporary economic difficulties’ may access financial resources from the Labour Fund to improve employees’ qualifications. Employers would be able to apply to the district public authority for up to 80% of the costs of employee training while they are temporarily laid off or their working hours are reduced. For each employee in training, these grants should not total more than 300% of the average national wage.

Any employer applying for aid must:

  • prove their sales have dropped by at least 15% over six consecutive months within the 12 months immediately before their request for aid;
  • be up to date with all taxes, social security contributions and other public dues;
  • prove they are not at risk of bankruptcy;
  • if they want aid for more than six months, present a viability study for the improvement of the financial standing of the enterprise over the following 12 months.

Successful applicants must not make redundancies for the entire period they are receiving aid or for three months after aid stops.

New legislation

The new measures closely resemble those of the former anti-crisis legislation. First, the underlying motive is to offer public aid to employers. Second, the new law is intended to focus financial support on economically troubled employers, so that their staff are paid properly and social security contributions are kept up to date. Third, there is a ‘training’ component in the new regulations, as in the former legislation, although the extent of the new measures is narrower.

The major difference in the new legislation is that there are no regulations covering working time. The old measures that extended working time calculation to a 12-month settlement period and increased flexibility in working time were recently incorporated into the Labour Code despite union opposition (PL1309019I).

The new law is intended to be permanent; however, it will have to be supplemented by a secondary regulation (a decree issued by the Ministry of Labour) to allocate funds for the support of enterprises in ‘temporary economic difficulties’. It will also be the government’s prerogative to decide whether or not the measures set out in the new law should be enacted, what resources should be channelled into the aid, and how long the aid should be available.

No consensus among the social partners

In late January 2013, the government initiative was presented to the thematic groups of the Tripartite Commission for Social and Economic Affairs (TK) and, in March 2013, it became the subject of discussion by the Tripartite Commission.

It was supported by all four employer organisations: Confederation Lewiatan (Konfederacja Lewiatan); Employers of Poland (Pracodawcy RP); the Business Centre Club (BCC); and the Polish Crafts Union (ZRP) – although ZRP commented that the measures would probably have no impact on its membership of small and medium enterprises.

The unions’ reactions have, however, been negative. Only the All-Poland Alliance of Trade Unions (OPZZ) was willing to conditionally accept the new law, provided that the ‘grace period’ for making redundancies after receipt of aid stops is extended to six months instead of three. The Independent and Self-governing Trade Union Solidarity (NSZZ ‘Solidarność’) and the Trade Unions Forum (FZZ) rejected the legislation as a whole.

The NSZZ ‘Solidarność’ complained about the ambiguity of the terms ‘economic crisis’ and ‘economic slowdown’, which have not been clearly defined, and about leaving the decision about whether the measures should be activated in the hands of the government. It also has reservations about the redundancy grace period.

The FZZ said it doubted that the measures would provide sufficient support for employees, and questioned how many enterprises and sectors would actually benefit.

When no consensus can be reached by the social partners, a joint resolution cannot not be passed by the Tripartite Commission. In effect, the government’s initiative has left the central-level tripartite body without a seal of approval.

Despite the lack of consensus, the government decided to pursue the project anyway. In May 2013, the draft legislation was presented in parliament. In the course of the legislative process, only minor amendments were introduced and it was eventually passed into law in October 2013. It was promptly signed by the President and entered into force in November.

The Minister of Labour immediately issued a decree to make aid accessible to interested employers for 2014. All three national-level unions left the Tripartite Commission in May when the government decided to press ahead with the legislation without their approval, and social dialogue at central level has remained in a deadlock ever since (PL1310029I).

Commentary

The assessment of the efficiency of the measures introduced by the first anti-crisis legislation (2009–2011) was important, as it emerged that most of the measures offered by the government were largely ignored by companies. In the replacement legislation, the number of measures has been reduced but they largely replicate what was available to employers between 2009 and 2011.

It is noteworthy, though, that specific measures from the earlier legislation were introduced into the Labour Code despite union resistance. Comparing the consensus with which the anti-crisis legislation was prepared in 2009 and the way the new legislation has been pushed through recently is a good indication of a severe impasse in social dialogue in Poland.

Jan Czarzasty, Warsaw School of Economics (SGH) and Institute of Public Affairs (ISP)

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