Poland: Latest working life developments – Q4 2017

Protests by doctors at public healthcare facilities, delays in trade union legislation, and the government’s hasty removal of the limit on income subject to social security contributions are the main topics of interest in this article. This country update reports on the latest developments in working life in Poland in the fourth quarter of 2017.

Tensions in public healthcare

Doctors working in public healthcare facilities continued to protest throughout the final part of the year. The main reason for their discontent was insufficient pay, with the pay for a doctor with resident status being equal to only 70% of the average national wage. Furthermore, pay had not effectively risen since 2009.

In August 2017, the government approached the problem by adopting a law on the rules for calculating the minimum basic wage (PDF) for medical personnel in healthcare facilities. However, the doctors did not consider the new law satisfactory enough to discontinue their action. Their key demands are:

  • an increase in expenditure on public healthcare to 6.8% of Poland’s gross domestic product (GDP) by 2021
  • an immediate increase in the pay of specialist and resident doctors, nurses and other occupational groups in the system, amounting to 3, 2 and 1.5 times (respectively) the average monthly national pay (approximately PLN 4,500 gross (€1,078 as of 18 January 2018)).

These demands (and others) are included in the draft regulation delivered to parliament by medical professionals as a civic initiative in May 2017. Although the draft was blocked in parliament, the government offered an incremental increase of public spending to 6% of GDP by 2025, and subsequently translated it into Law 2017/2434 (PDF).

Nevertheless, the debate dragged on until it reached the point of doctors starting to invoke opt-out clauses in the last quarter of the year. By the end of 2017, roughly 3,500 doctors (2.6% of all certified doctors in Poland) had done so. The process has continued, meaning the ultimate scale of the understaffing is likely to grow (unofficial estimates suggest the number may be as high as 5,000 doctors). The protest action could lead to the temporary closure of selected hospital wards due to unavailability of doctors for emergency and night duties.

New trade union legislation yet to be seen

Although negotiations on the shape of the much-needed and long-awaited amendments to trade union legislation began in 2016, it took over a year for the draft legislation (No. 1933) to be submitted to parliament. In autumn 2016, after common ground had been reached between the employers and trade unions within the Social Dialogue Council (RDS), the government took responsibility for preparing the draft legislation and incorporating a major input of the negotiations in the Thematic Team for Labour Law of the RDS.

In summer 2017, the draft was officially discussed at an internal government meeting and, in October, formally presented to parliament as a government initiative. The ultimate delivered version was widely criticised by both unions and employers as the text deviated considerably from what had been agreed the previous year within the RDS. Unions pointed to ‘watering down’ of coalition right extension, while employers complained about too many entitlements for people not employed on the basis of non-employment contracts. After the first reading in November, the draft was sent to the parliamentary Social Policy Committee for further discussion.

Social partners against modification of social security laws

On 31 October 2017, the government surprised the public and the social partners by submitting draft legislation (No. 1974) that removed the ‘30 times cap’ (that is, the upper limit of income from employment that is subject to mandatory social security dues). The mechanism means that once an employee’s gross annual income reaches an amount equal to 30 monthly average payments the obligation to pay social security contributions no longer applies (in 2017, the threshold was PLN 127,890 (€30.645)). 

The parliamentary process proceeded hastily as the government was determined to have the regulations enacted by the end of the year. This led to widespread disapproval of the project (as exemplified not only by the joint position of five national social partner organisations, but also by a number of critical opinions by independent experts) being ignored. The key counterarguments brought against the initiative were:

  • damage to the social security system once the exceptionally high old-age pensions started to be paid;
  • a rapid increase in the employer’s share of the social security burden on paid wages, with those employers most likely to be affected most being innovative companies from hi-tech and hi-knowledge sectors (as they pay well above the average).

Under pressure from the government, the parliamentary majority voted the draft into law with no further deliberation. However, President Andrzej Duda became concerned about the regulation and was reluctant to sign it. The final outcome was still undecided at the end of the year.

Commentary

After two years in power, the ruling party opted for a ‘political reset’ in December, replacing Prime Minister Beata Szydło with her deputy Mateusz Morawiecki; although the composition of the cabinet stayed almost the same (as of the end of 2017). Despite economic prosperity and its high popularity with the public, the ‘new/old’ government faces a number of challenges both domestic (as highlighted above) and external (tensions with the EU). Whatever the ultimate outcome of these processes, it is certain that the climate surrounding industrial relations and social dialogue is becoming intense.

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