Industrial relations and work in foreign hypermarket chains

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The 1990s witnessed the rapid development in Poland of chains of large supermarkets, or hypermarkets, operated by foreign-owned companies (principally from Germany and France). In 2002, there are approximately 20 foreign retail chains with operations in Poland; between them, they run some 400 large outlets employing around 80,000 Polish workers. Trade unions have experienced considerable difficulties in establishing a presence in these firms, while research carried out by the State Labour Inspection indicates that foreign hypermarket chains frequently do not abide by the Polish Labour Code.

From the mid-1990s, large foreign-based retail multinationals began establishing operations in Poland, as did large foreign-based food manufacturers. Differing from many other sectors (such as the machinery industry), these commercial and foodstuff processing operations were, in the majority of cases, new 'greenfield' investments, a fact which has had considerable implications for employment and industrial relations developments.

Foreign investors and industrial relations

In the case of Polish state-owned enterprises taken over by foreign capital during the 1990s, collective 'social agreements' were often drawn up, involving the investors on one hand and the trade unions on the other. These pacts generally incorporated guarantees concerning employment and observance of the Labour Code and quite often expanded upon the basic employee rights and entitlements. The typical pact of this kind was concluded for a period of three years and included an undertaking on the part of the investor that no redundancies would be made during that time.

As regards large foreign corporations establishing their Polish operations 'from scratch', matters were quite different. They were not hindered by social pacts and, accordingly, they were free to shape labour relations and the composition of employment at their operations as they saw fit. The sociological literature as well as media articles soon began advancing theories that the details of the social situation at such enterprises vary according to the national origin of its owners, with some patterns discerned as regards the methods of Scandinavian, French, German, and US companies. For example, Scandinavian investors – it was said – generally provide for some form of participation in management by the staff, while French investors shun such solutions. These observations, however, tended to be of a fragmentary character, and no systematic, representative studies which might provide the basis for generalised conclusions have been carried out.

During the first years of their presence in Poland, foreign investments had one distinguishing feature – no matter what the details of their employment relations, trade unions were avoided. While there have been some changes in this respect as of late, the representation of trade union organisations at foreign-owned companies continues to be modest (PL0208105F).

This ease with which the organisation of foreign-owned companies' employees into unions was prevented was indicative of the weakness of Poland’s trade union movement as well as of a general absence of established industrial relations models which would oblige foreign investors to abide by rules of one sort or another, for instance as regards employee representation institutions. This state of affairs was the result of loopholes in the labour laws, for the existence of which the unions were at least partially responsible. For a period of more than 10 years up until 2001, trade unions had very strong representation in the Polish parliament, but they failed to convey this potential into legislative solutions guaranteeing employee representation in non-unionised commercial operations.

Foreign retail chains

The presence of foreign capital in Poland has been particularly manifest in the retail sector. The various chains which proliferated across Poland in the 1990s - rapidly gaining dominance over their fledgling Polish counterparts - were predominantly of German and French origin, although other countries were also represented. Currently around 20 foreign-based retail multinationals - operating chains such as Jumbo (owner based in Portugal), Axem SA (France), Leroy Merlin (France), Auchan (France), Ikea (Sweden), E Leclerc (France), Carrefour (France), Castorama (UK), Tesco (UK), Géant (France), Billa (France), Praktiker (Germany), Obi (Germany), Hit (Germany) Makro Cash&Carry (Germany), Minimal (Germany), Real (Germany) and Nomi (UK) - are represented in Poland. Between them, they employ some 80,000 people at 400 commercial outlets, mainly large supermarkets or hypermarkets. In objective terms, these outlets provide quite an encouraging base for the existence of trade unions – the average hypermarket employs several hundred people with similar positions and interests, while their management, rather than relying on modern human resource management methods, tends to be of the autocratic type. All this ought to be conducive to the expansion of trade unions. Since the late 1990s, unions have in fact gained a foothold in the large supermarket chains operating in Poland, but this is still a marginal phenomenon. Trade unions are present in only in six of these chains, and in approximately 40 of their retail outlets.

Research carried out in 2000 by Juliusz Gardawski (Związki zawodowe na rozdrożu[Trade unions at a crossroads], Institute of Public Affairs, Warsaw 2001) involved interviews with a group of employee relations directors from a number of retail chains. It found that, the large number of competing retail chains in Poland notwithstanding, the personnel policies they follow are very similar. In most cases, the holders of employee relation management positions are Polish nationals - there is widely held opinion among employers and trade union activists that Poles are more ruthless and hostile in dealing with trade unions than foreign managers. According to the findings of the research, the personnel directors were often in touch with their counterparts from other companies, pursuing a type of unified remuneration policy and employing the same tactics towards trade unions. The stated assumption was that employees have no use for institutionalised representation independent of the employer, as the latter, acting through its personnel services, can adequately provide for the protection of their interests. While the personnel directors were aware that the managers of individual branches may be guilty of worker exploitation, they took little action to counteract such practices.

Labour law violations at foreign retail chains

Two recent documents set out detailed information about the employment law situation at large retail chains: Przestrzeganie przepisów prawa pracy w supermarketach[Abidance with labour laws at supermarkets], State Labour Inspection (Państwowa Inspekcja Pracy, PIP), Warsaw, December 2000; and Sytuacja socjalna pracowników w zagranicznych supermarketach, Julian Auleytner and Mirosław Grewiński, Polityka Społeczna no 1, 2002. These reports and their associated analyses indicate that Polish supermarket employees work under conditions considerably less advantageous than those extended to their counterparts in many other countries. Auleytner and Grewiński state that 'the employers do not abide by the provisions of the Polish Labour Code [and] violate the regulations and [in-house] by-laws concerning working conditions, working time, granting of leave and remuneration, as well as the occupational health and safety rules.' These authors also confirm the findings of other researchers that 'in spite of flagrant abuses, it is only rarely that employees voice their complaints due to fear of losing their jobs.'

Over 1999 and 2000, labour inspectors carried out control proceedings at 58 supermarkets belonging to more than a dozen companies (in some cases, a single operation was inspected more than once). The outlets inspected in 2000 employed a total of more than 21,000 people. The main violations of labour law provisions recorded are set out in the table below.