Government proposes introduction of employee councils

The period in office of the employee representatives or employee council members would be two years, and the representatives would enjoy statutory protection from termination of their employment relationship for the duration of their mandate as well as for one year thereafter.

Information and consultation obligation would apply only to those enterprises which carry on commercial activity. They would be obliged to provide employees with information about the economic standing, employment structure, and organisation of work at the employing establishment, at the written request of the employee council/representatives or whenever changes of some sort are being contemplated. This data would have to be furnished in such a form, and within such a time frame, as to enable the council/representative to analyse it and to duly prepare for consultation. Consultations would deal with changes regarding employment and the organisation of work. The council/representative would be able to call on the assistance of experts in the relevant fields. The council/representative and any experts appointed would be bound to maintain confidentiality with respect to data furnished by the employer.

Are new structures necessary?

In recent years, a decline in trade unionism has been observed in Poland (PL0208105F). At present, unions represent some 15% of all workers, and a union organisation is active in one in 10 employing establishments. Analysts have voiced concern about a deepening 'representation gap' between those sectors/industries in which unions continue to be relatively strong and those in which there are no unions.

As matters stand at the moment, employees’ rights to information and consultation are effectively guaranteed only in those areas of the economy in which unions continue to operate. Furthermore, observers argue that employee rights have been successively limited by way of amendments to the Labour Code in the past few years (PL0311108F and PL0209107F). Some experts believe that, contrary to the position taken by employers' organisations on the issue, these changes are something more than simple reduction of bureaucratic 'red tape', an example being a new provision introduced in 2002 whereby the management of a company faced with difficult financial circumstances may indefinitely suspend any collective agreement or similar arrangement in force at the company (PL0212108F).

Representatives of the Ministry responsible for labour matters maintain that representatives selected by employees, as proposed under the new legislation, will inject social dialogue with new life, especially in those employing entities that currently have no employee representation.

Experts have also emphasised that employee councils may open up new possibilities for instituting values common to employees and owners/management and, accordingly, making the employing entity an object of shared responsibility. In an enterprise in which there are a number of different trade unions, the employee council - the reasoning goes - will be in a position to force them to cooperate, to the mutual benefit of the employer and of the employees.

Social partner doubts

While there appears to be a general consensus that the establishment of some form of legal framework for information and consultation is inevitable, the draft legislation proposed by the government has met with doubts on the part of employers, trade unions and independent legal experts alike. The points of concern raised with respect to the government proposal range from the specific to the all-encompassing.

For example, the question has been raised as to who will remunerate the experts that the employee council may refer to should it so wish. The use of the Directive's option to apply it to establishments with 20 or more employees, rather than to undertakings with at least 50 employees, has also been questioned. Some parties worry that application of the new EU rules will ultimately leave the social partners enmeshed in even a greater thicket of regulation than is now the case - labour relations and employment matters in Poland are already regulated by the Labour Code, the Act regarding trade unions, the Act regarding employers' associations, the Act regarding collective disputes and various other sources of law. Accordingly, it has been suggested that any revision of the legal status quo ought to be preceded by a review of the current laws and that the various rights and duties of employers, employees and their associations/unions should then be systematised and enshrined in a single legal instrument. How such a gargantuan task might be achieved, however, remains unclear.

These points aside, there is one question which appears to be of critical importance, namely that some of the parties concerned believe that the new employee councils ought to operate only in those employing establishments where there are no trade unions. Such a solution has been adopted, for instance, in the Czech Republic, to take a nearby example. If this option were adopted, all those involved would be saved the trouble of organising relations between the new councils and the existing union organisations. Furthermore, at least some employees might then prefer to create an efficient union organisation vested with real powers.

This 'either/or' solution (either employee council or unions) may also be more palatable to employers. This is suggested by the results of a study of private enterprises with 10-250 employees carried out by Juliusz Gardawski in 2002 (PL0206102F). This study centred on the institution of an in-house delegate (or 'moderator') chosen by employees to facilitate communication between the company and the workforce, but its results provide some general indication of the extent to which employers would be willing to countenance a form of employee representation other than trade unions. Almost 60% of the private company owners polled indicated that they found the concept of an employee representative to liaise with the owners/management of the business to be a good one. One in 10 business owners, meanwhile, would be willing to accept a union-plus-delegate arrangement in the company. Almost 40% of the business owners supported the institution of a delegate while rejecting unions, and one in three wanted nothing to do with either one or the other. These results can be taken as suggesting that many employers may be able to accommodate forms of employee representation other than trade unions.

With regard to trade unions' views of the proposed legislation, while union officials are the first to acknowledge that their clout in the industrial relations system is diminishing, they have met the prospect of obligatory employee representation in establishments with moderate scepticism. The unions have officially complained that, even though the government devoted considerable time to preparing its legislative proposal, they were not consulted. Furthermore, union activists do not understand why the government, having finally produced its proposal, wants to implement it at such short notice. The unions want an implementation date in 2007, rather than 2005. There has also been some discussion of the size of the proposed employee councils, and some union officials believe that five members is too many. Overall, observers suggest the possibility that at least some elements among the unions view the proposed employee councils as unwelcome competition which, in the long run, might dilute the influence of the unions even more.

Commentary

It appears that the somewhat agitated response with which the proposed legislation on employee councils has been met by employers and trade union organisations owes much to a skewed understanding of the proposed councils’ role. Employers, perhaps guided by negative connotations with the works councils that existed under the command economy prevailing in Poland prior to 1989, are worried that a new force will arise that will meddle in the management of their enterprises. The proposed law, however, does not vest the employee councils with any powers analogous to those held by unions. Furthermore, the experiences of EU Member States that have already applied similar solutions indicate that, in practice, works council-type bodies do not constitute competition for trade unions.

The legislation proposed by the government simply embodies another EU standard that must be applied in Poland. Given the current situation, the solutions proposed therein are quite desirable, especially in the case of those enterprises whose employees now have no representation whatsoever. Insofar as the fears of the employers are understandable enough, those of the unions give rise to some reservations. (Rafał Towalski, Institute of Public Affairs [Instytut Spraw Publicznych, ISP] and Warsaw School of Economics [Szkoła Główna Handlowa, SGH])