2002 Annual Review for Poland

This record reviews 2002's main developments in industrial relations in Poland.

Political developments

The current government is a left-wing coalition of the Democratic Left Alliance (Sojusz Lewicy Demokratycznej, SLD), Labour Union (Unia Pracy, UP) and Polish Peasants Party (Polskie Stronnictwo Ludowe, PSL), elected in 2001. Municipal elections were held in October/November 2002. A low turn-out (44.23%) encouraged the media to claim that society was growing tired with politics and disillusioned with the dominant political parties. Despite winning the elections (in terms of aggregate votes at national level), the ruling coalition received noticeably weaker support than in the 2001 parliamentary elections. Failing to secure a comfortable majority in most local assemblies (Sejmiks), the SLD and UP had no choice but to form alliances not only with their usual partner, PSL, but in some regions (voivodeships) also with the radical Self-Defence (Samoobrona) party. SLD and UP candidates lost to centre and right-wing opponents in the mayoral elections in 11 out of 16 major cities, including Warsaw.

The most significant political event of the year was the European Council's decision on EU enlargement, taken in December in Copenhagen (EU0301201N), whereby 10 new Member States, including Poland, will join the Union in 2004. Despite the opposition's fierce criticism, both inside and outside parliament, of the Polish negotiating team (and naturally the government behind it) for perceived submissiveness to the EU, public opinion generally appeared to view the agreed membership conditions as a realistic compromise.

Collective bargaining

Collective bargaining has a limited impact on industrial relations in Poland. In general, issues such as pay are regulated either directly by law or by the social dialogue bodies (tripartite commissions at national and regional levels). Multi-employer agreements may also regulate these issues (provided their provisions are at least as favorable to employees as the law).

According to data from the State Labour Inspection (Państwowa Inspekcja Pracy), at the end of 2001, some 9,000 collective agreements were in force in Poland - in almost all cases single-establishment agreements (PL0210108F). Multi-establishment agreements are rare and the conclusion of agreements is much more common in the public sector than in the private sector. Nevertheless, according to the Ministry of Labour and Social Policy (Ministerstwo Pracy i Polityki Społecznej, MPiPS), there were 143 multi-employer agreements and 111 additional protocols to such agreements (an additional protocol is a legally required form of amendment of an existing agreement) registered with the Ministry as at 15 February 2002, covering approximately 750,000 employees.

Pay

As noted above, bargaining has only a limited role in pay setting in Poland. According to figures from the Central Statistical Office, across the national economy average pay increased by 1.7% in the year to the end of the third quarter of 2002, a marked fall on the 2001 figure of 7.2%. The statutory minimum wage was frozen in 2002, following a 9.4% rise in 2001. Similarly, in the public sector, due to the rising national budget deficit, pay was frozen in 2002 at 2001 levels.

Surveys of private sector enterprises have found a growing tendency among employers to delay the payment of wages in recent years. For example, in 2001 the State Labour Inspection found that nearly two-thirds of companies audited breached regulations in this area. Late payment was initially restricted to small firms, but has recently become common in large enterprises as well (PL0210105N).

Working time

Information concerning bargaining activity on working time is scant, as are data on working hours more generally. However, according to Eurostat, the usual weekly hours of full-time employees stood at 41.5 hours in 2001. In terms of legislation, the new Labour Code adopted in the summer of 2002 (PL0209107F) (see below under 'Legislative developments'), amends working time rules as follows:

• overtime. Each hour of overtime work on weekdays, as well as Sundays and holidays where these are normal working days, is remunerated at a premium of 50% on top of normal pay. Overtime at nights, and on Sundays and holidays which are normally free, is remunerated with a premium of 100%. This replaces the previous system under which the first two hours of overtime on normal working days was remunerated with a premium of 150% and subsequent overtime, plus overtime on holiday days, at night and on Sundays with a premium of 200%;

• interrupted working time. Depending on the type of job, the employer may introduce interrupted daily working time, with a break of up to five hours which is not calculated as working time. Previously, unpaid interruptions in working time were not permitted, except in transportation; and

• breaks in the working day. The new Labour Code makes it possible to introduce a one-hour daily break which is not counted as working time. Previously, employees working at least six hours in a 24-hour period had the right to a 15-minute break, counted as working time.

Job security

The privatisation of Polish industry and services which has taken place since 1990 has engendered much debate about job security. A total of 6,845 state-owned enterprises had undergone ownership transformation by the end of 2001, amounting to more than 78% of those in existence at the time the process began. Of these enterprises, 22.1% were commercialised (ie converted into a company with the state as the sole shareholder), 28.2% underwent direct privatisation, 25.4% were liquidated for economic reasons and 24.2% were state-owned agricultural holdings, which had been liquidated and made part of the resources of the Agricultural Property Agency of the State Treasury (Agencja Własności Rolnej Skarbu Państwa, AWRSP). Privatisation on this scale has had a major effect on employee job security as well as more widely on industrial relations and employee representative structures (PL0209103F).

In terms of individual disputes over restructuring and closures, workers at the Fabryka Kabli cable and wire plant in Ożarów began strike and other action in April 2002 in protest at the decision to close the factory taken by its new owner, Tele-Fonika (PL0208104N). The employees slated for redundancy were offered substantial severance packages and 220 new jobs in an assortment of operations owned by Tele-Fonika in several locations across Poland. The trade unions declined to accept the offer formulated by Tele-Fonika management, and protests continued until late in the year (PL0212101N). In June 2002, the Szczecin Shipyard- formerly held up as example of successful privatisation - went into bankruptcy, faced with massive debts and other problems. The future of the company's 6,000 employees is uncertain, and its failure will have knock-on effects throughout the economy (PL0207101N).

Equal opportunities and diversity issues

Equal opportunities issues do not appear prominently in collective bargaining. However, there were some legislative developments in 2002. In July, the Polish government amended the legislative provisions specifying the types of work which women are not allowed to perform. The aim is to improve occupational health and safety standards and, in particular, to protect pregnant and nursing women. The prohibition is not regarded as contradicting equal opportunities provisions (PL0210102N). Further, the introduction of an explicit ban on sex discrimination (as unconstitutional) in employment contracts, collective agreements and any legal or contractual relations was introduced as part of the new Labour Code, adopted in the summer of 2002 (see below under 'Legislative developments').

Legislative developments

During the course of 2002, important developments took place in terms of labour legislation. In July, the Labour Code was amended, resulting in considerable liberalisation (PL0209107F), despite trade union opposition. Some of the major changes included:

• allowing employment on unlimited number of fixed-term contracts (previously three fixed-term contracts of up to three months each were permitted), until Poland’s accession to the EU;

• the introduction of 'substitution agreements', under which, during the justified absence of an employee - eg sick leave and maternity leave - it is possible to temporarily appoint another person in their place;

• the reduction of overtime premia;

• the introduction of unpaid interruptions in working time

• the introduction of a provision allowing employers in an 'extremely difficult financial situation' to suspend (by mutual consent with the trade unions active within the company) the provisions of a collective agreement for up to three years; and

• introduction of an explicit ban on sex discrimination (as unconstitutional) in employment contracts, collective agreements and any legal or contractual relations (PL0211105F).

In October 2002, parliament passed a new law on the minimum wage, which should come into force in early 2003 (PL0211109F). The new legislation increases the minimum wage, amends the way in which it is set - it will be negotiated within the Tripartite Commission (Komisja Trójstronna) on the basis of government proposals - and sets a lower rate (80% in the first year of their employment and 90% in the second) for recent school-leavers in an attempt to reduce the high level of unemployment among young people.

The organisation and role of the social partners

The most important event in terms of the role of the social partners in 2002 was the introduction of regional (voivodeship) commissions for social dialogue, based on legislation passed in July 2001 (PL0210106F).

In late September, the Independent and Self-Governing Trade Union Solidarność (Niezależny Samorządny Związek Zawodowy Solidarność, NSZZ Solidarność), one of the two largest trade union organisations in Poland, held its four-yearly congress (PL0210103N). Delegates elected new officers and agreed changes to the union’s policies. The previous chair, Marian Krzaklewski, lost the position following criticisms of his record, and especially of excessive involvement in politics. A new national trade union centre, the Trade Unions Forum (Forum Związków Zawodowych, FZZ) was established in 2002 (PL0212109F). In November 2002, the Forum consisted of 36 trade unions and had approximately 300,000 members. A significant number of unions associated with Forum were formerly involved with All-Poland Alliance of Trade Unions (Ogólnopolskie Porozumienie Związków Zawodowych, OPZZ). Having fulfilled all the requirements set by law, the new centre is now seeking a seat on the Tripartite Commission.

In July 2002, representatives of workers from a number of Polish companies facing financial crisis set up an All-Polish Inter-company Protest Committee (Ogólnopolski Międzyzakładowy Komitet Protestacyjny, OMKP) (PL0209101N). This initiative grew from a protest committee set up outside the official trade unions by workers at the bankrupt Szczecin Shipyard. The new movement was criticised by both the main trade unions and the Minister of Labour and Social Policy. OMPK announced a set of demands, including measures to protect the national economy, and organised demonstrations, though with little success.

Over the past 20 years, trade union density in Poland has dropped from 80% of the workforce to 14% in 2002 (PL0208105F).

Industrial action

Data for 2002 concerning strikes and industrial conflicts were not available at the end of the year. However, it is expected that the incidence of strike action will be slightly higher in 2002 than in 2001. In general, since the mid-1990s, the number of strikes in Poland has fallen to a low level, with trade unions tending to avoid using the 'strike weapon' both in the private sector, where unions are either very weak or absent, and (to a lesser extent) in the public sector, in the light of prevailing economic and labour market conditions (PL0207103F).

In terms of individual strikes, the most widespread actions were taken in the ship-building industry, where unions expressed their anger during the early part of the summer at the bankruptcy of the Szczecen Shipyard (PL0207101N). In addition, in October 2002, NSZZ Solidarność organised two demonstrations in Warsaw (PL0211101N). In both cases, violence occurred between the protesters and the police. The protests were directed against the present government's policy regarding some branches of industry, and were also a response to the liberalisation of the Labour Code (see above under 'Legislative developments').

Other actions included an incident in October 2002, when activists from a little-known organisation called the Defence Movement of the Unemployed (Ruch Obrony Bezrobotnych) briefly occupied the premises of STOEN, a publicly-owned Polish energy distribution company (PL0211102N). They were protesting against the sale of the majority of the company's shares to a German company.

Employee participation

The main development in the field of employee participation in 2002 was the adoption in April of legislation to implement the EU Directive (94/45/EC) on European Works Councils, which will come into force on the date of Poland's accession to the EU (PL0208106F). Although Poland is not yet covered by the Directive, Polish representatives have already been included on the EWCs of up to 20 multinationals operating there.

At national level, trade unions are the main channel for representation of workers' interests in Polish companies. However, the unions' increasing marginalisation and declining membership tends to hamper such representation. There are a number of non-union forms of company-level employee representation in place in some types of state-owned or formerly state-owned enterprises - mainly workers' councils and employee representation on supervisory boards. However, these are limited in scope and largely ineffective. A high proportion of workers have neither trade union nor non-union representation of their interests.

Telework

There are no data available concerning the incidence of telework in Poland. However, this practice is not widespread.

Vocational training

Most of the debate on training and lifelong learning in 2002 related to enabling people to gain a foothold in the labour market. Accordingly, in June, the Ministry of Labour and Social Policy formulated a programme to stimulate employment for young people, known as First Job (Pierwsza praca). The programme provides, among other employment promotion initiatives, for a number of education and training measures which include schooling in entrepreneurial skills, continuing education (organised by labour offices) and initiatives in schools to promote employment (the creation of 'professional careers offices') (PL0208101N). The implementation of the programme over its first six months was regarded as relatively successful (PL0212107F).

New forms of work

Changes in labour relations and the organisation of the economy have proved conducive to the development of new forms of employment. Although the contract of employment based on the Labour Code remains the most widespread form of employment in Poland, other more flexible forms of employment are also attracting considerable interest, notably forms of employment based on the Civil Code – known as civil law contracts (PL0210109F). These include 'contracts of mandate' (essentially contracts for the performance of services), contracts to perform a specified task or work, and 'contracts of management' (for management staff).

In September 2002, the government presented proposals to regulate the legal status of temporary work, which is a relatively new phenomenon in Poland (PL0210104N). Despite the current lack of precise statutory regulations, this form of employment - including temporary agency work - has become increasingly popular in recent years. The need to deal with the current legislative uncertainty has been advocated mainly by temporary work agencies, which argue that temporary work is a solution to high unemployment. In their activities, these agencies have so far been walking a 'legal tightrope', risking conflicts with labour inspection bodies or even facing court cases. The Association of Temporary Work Agencies (Związek Agencji Pracy Czasowej), the body lobbying for these agencies, prepared a draft of a law on temporary work which it submitted to the government.

Other relevant developments

In late 2002, the government decided to increase employers' contributions to the Guaranteed Employee Benefits Fund (Fundusz Gwarantowanych Swiadczen Pracowniczych), which is used to cover the wage arrears due to the employees of bankrupt businesses (PL0212103N). The most recent control performed by the Social Insurance Institution found that the Fund is not properly managed and is almost empty.

One of the statutory instruments accompanying Poland's national budget for 2002 abolished the 'pre-retirement allowance', which allowed people meeting certain age and employment requirements to cease work before retirement age (PL0211108F). No new benefits of this sort are now being paid, although the payment of pre-retirement allowances allocated in the past is being continued. As of August 2002, almost 350,000 registered unemployed people were collecting such benefits. The amendment of the pre-retirement benefit laws has been challenged before Poland's Constitutional Tribunal independently by four parties, including the country's two principal trade union organisations, OPZZ and NSZZ Solidarność.

Outlook

In political terms, the crucial event of 2003 will be the national referendum on joining the EU. Voting will take place in June 2003 and the government has been preparing a massive media campaign to provide information on the EU and the consequences of Poland’s proposed membership. The need for information seems urgent, since the average Pole’s knowledge of these issues remains insufficient, according to opinion polls.

In industrial relations terms, the new Labour Code will mark the start of a new era in many areas of labour regulation. With regard to specific issues, temporary work will be high on the government’s agenda and that of all interested parties. The draft legislation issued in September 2002 will no doubt be the subject of much debate throughout the year. (Juliusz Gardawski, Rafał Towalski and Jan Czarzasty, Institute of Public Affairs (Instytut Spraw Publicznych, ISP) and Warsaw School of Economics (Szkoła Główna Handlowa, SGH)).