EMCC European Monitoring Centre on Change

Guaranteed employee benefits fund

Poland
Phase: Management
Type:
  • Response to COVID-19
  • Income support for workers
Sidst ændret: 04 September, 2020
Lokalt navn:

Fundusz Gwarantowanych Świadczeń Pracowniczych

Engelsk navn:

Guaranteed employee benefits fund

Coverage/Eligibility

All employees who are in an employment relationship are eligible except those who are close relatives of the entrepreneur and members of his/her extended family. In the case of employer's insolvency, all claims of workers, previous workers and their surviving dependents are guaranteed by the guaranteed employee benefits fund (Fundusz Gwarantowanych Świadczeń Pracowniczych - FGSP).

Insolvency is considered as a situation in which the employers cannot fulfil their obligations. If such situation is permanent, the employer should start a liquidation process (article 3 of the Act of 13 July 2006 concerning the protection of workers' claims in the event of the insolvency of their employer). After a liquidation process the court shall issue:

  • An order of insolvency, or
  • An order of dismissal of the application because of a lack of resources for the liquidation process, or
  • An order of dismissal of the application because of a mortgage or pledge which charged the debtor’s assets.

These three court orders (or others which are mentioned in articles 4 - 8a of the Act of 13 July 2006 on the protection of workers' claims in the event of the insolvency of their employer) have the same impact on the right of employee for payments. 

Payments will only be made in the first case of insolvency of the same employer to the same employees. If this occurs for the second time, the benefit is not payable. There is no minimum duration of the employment relationship in order for employees to become eligible.

Main characteristics

In the case of employer insolvency, all claims from workers, previous workers and their surviving dependants are guaranteed by the guaranteed employee benefits fund (Fundusz Gwarantowanych Świadczeń Pracowniczych).

The fund covers all claims stemming from the employment relationship or its termination that have not been paid to the employee due to the employer's insolvency or economically difficult situation.

These costs include work income, compensation for non-worked hours that arose and are not due to the employee, sickness and holiday payments, severance payments, and retirement payments that arose up to three months before the start of the insolvency procedure or the end of the employment relationship (as long as this did not happen more than nine months before the insolvency). The total monthly payment from the fund cannot exceed (including for example severance pay or sickness pay) the employee's average salary from the previous quarter.

The fund is mainly financed by employers’ contributions (0.1% of monthly pay for each employee), supplemented by debt collection, recovery of funds from employers and other sources, donations, voluntary payments of employers or subsidies. Payments to employees are made independently from the employers paying their contributions.

In 2017, the act was amended. Article 8a, stating that the insolvency of the employer also occurs in the case of non-payment of employee claims due to lack of financial resources in the event of the actual cessation of the employer for more than two months was deleted. This will definitely significantly reduce the number of cases when a former employee who needs support does not receive it.

Pursuant to the Act of 31 March 2020 amending the Act on special solutions related to the prevention and eradication of COVID-19, other infectious diseases and crisis situations caused by them, as well as certain other acts, the funds of the guaranteed employee benefits fund are used to finance the reduced working time and economic downtime (article 15g and subsequent). In the case of reduced working time, the maximum amount of funding (from the FGŚP) per employee will be PLN 2,452.27 gross (€ 557) including social security contributions due from the employer on the benefit granted. The amount of co-financing is based on working time.

Co-financing shall not apply to the remuneration of employees whose remuneration received in the month preceding the month in which the application was submitted was higher than 300% of the average monthly salary.

Entrepreneurs, during periods of economic downtime or reduced working time, are entitled to funds from the guaranteed employee benefits fund to pay social security contributions of employees due from the employer.

Funding

  • National funds
  • Companies

Involved actors

National government
Legal framework.
Anden
Guaranteed employee benefits fund.

Effectiveness

In 2018, benefits were paid to 13,568 employees for a total of PLN 114,750,000 (€26, 079 545) (Ministry of Labour, 2019). This is visibly less than in 2017 when such benefits  were paid to 15,669 employees for a total PLN 124,611,000 (€29,669 286)  (Ministry of Labour, 2018). 

In previous years, the number of beneficiaries was 15,764 (2016) and 18,966 (2015).

Strengths

As a state-managed fund, FGSP always has adequate resources to cope with even the most difficult employee situations. In recent years, there has regularly been a safe surplus in the fund's budget.

Weaknesses

According to the social partners' opinion, the unused part of FGSP in a given year should be allocated for additional purposes, such as maintaining jobs in periodic difficulties (partial compensation for each termination of employment, monthly subsidies for partial pay for reduced working time or debt relief). The instrument's procedures are perceived as too complicated and time-consuming, requiring simplification and shortening.

Eksempler

No information available.
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