Breaches of pay and benefits law decline

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In 2002, Poland's State Labour Inspection found that, overall, compliance by employers with labour law in terms of payment of remuneration and other employee benefits improved somewhat. However, the total value of unpaid wages and benefits rose sharply, in a context of economic difficulties for employers and the economy.

In 2002, the State Labour Inspection (Państwowa Inspekcja Pracy, PIP) carried out 1,532 inspections examining compliance with labour law in terms of payment of remuneration and other employee benefits. It found a 'violation rate' of 12.2% in terms of the rules on the calculation and disbursement of pay and benefits, compared with 13.0% in 2001, 15.2% in 2000 and 20% in 1999. Over 2000-2, the number of employees whose rights were breached remained roughly constant, though there was a substantial increase (of some 32%) in the combined value of outstanding pay and benefits.

While, as mentioned, the total number of employees affected increased only slightly (by 0.5%) over 2000-2, there was a substantial increase of 13.5% in the number of employees affected by non-payment of remuneration, and a rise of 6.5% in those affected by non-payment of bonuses and awards. However, there were major falls in the number of employees who had not been issued with working clothes or did not receive maintenance allowances (by 21.2%) and in the number of employees not receiving money due to them in respect of termination of their employment relationship (by 28.7%).

A breakdown of the overdue 'receivables' payable to employees indicates that more than 63% of amounts outstanding are in respect of remuneration for work. There has been a rise in the amount of unpaid overtime and of unpaid bonuses and awards (mainly due to non-payment of extra annual remuneration) and a slight rise in the combined value of unpaid sums due for unused vacation time. The value of outstanding payments in other areas, such as severance payments for employees made redundant for reasons related to their employer, has fallen

According to PIP, the principal reason why wages and benefits go unpaid relates to a shortage of funds. In 2002, this reason has been cited as the principal one in 54.2% of cases (compared with 41.8% in 2000). Notably this was the reason why employees did not receive amounts due to them in respect of: court awards (78% of cases); remuneration – often unpaid for considerable periods (76%); sickness benefits (81%); severance payments and other benefits payable to employees made redundant for reasons related to their employer (69%); and retirement and pension payments (73%). Organisations whose output is destined for export were found to be in a particularly difficult situation. The problems seemed particularly endemic in the construction industry, because of payment backlogs and a shortage of new work.

At the same time, PIP notes a sustained fall in the incidence of other reasons for non-payment, such as unfamiliarity with the relevant laws, erroneous calculations and refusal of payment.

Overall, the compliance record for payment of remuneration and other employee benefits suggests that observance of the law continues to be unsatisfactory. Violations of one sort or another were discovered at more than 90% of the employers subject to inspections. The majority of inspection proceedings concerned employers against which complaints had been lodged by employees, or which had become the target of criticism by trade unions.

The value of unpaid remuneration rose considerably in 2002 (PL0210105N). Not only was remuneration not paid in keeping with the time frames stipulated by the Labour Code, the delay in payment often amounted to many months. The financial standing of many of the employers concerned, PIP points out, bodes ill as regards the possibility of effectively enforcing the employees' claims. Employers and PIP officials agree that the main reason for this state of affairs lies in Poland's difficult economic situation.

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