Mixed reactions to draft Labour Inspectorate bill

The Tripartite Commission has been discussing draft amendments to the National Labour Inspectorate legislation, presented by the president of Poland. The proposed changes aim to strengthen the inspectorate’s powers of coercion and increase its effectiveness in combating violations of employee rights. Trade union reaction to the draft proposal has been positive, while employers have expressed some concerns. Meanwhile, the president is preparing further draft legislation to introduce severe penalties for employers in cases of unlawful practices towards employees.

Limited powers of labour inspectorate

As a public institution, active at national and regional level, the National Labour Inspectorate (Panstwowa Inspekcja Pracy, PIP) is primarily responsible for controlling and protecting employee rights. PIP operates under the National Labour Inspectorate Act of 1981.

Although PIP is regarded as an important feature of the institutional framework for employee rights protection, in recent years it has attracted increasing criticism, mainly with regard to the limited range of its control activities and inability to enforce the law effectively. However, in its annual reports, PIP has claimed otherwise and argued that the main problem of inefficiency on its part is due to shortcomings in the existing legislation: for example, at present, the maximum fine that can be imposed on an employer found guilty of breaching employee rights amounts to PLN 5,000 (approximately €1,300) – arguably a negligible fine for large corporate employers.

After the double victory of the Law and Justice Party (Prawo i Sprawiedliwosc, PiS) in last year’s parliamentary and presidential elections, it became evident that amendments to the National Labour Inspectorate Act would be proposed to strengthen the inspectorate’s powers of coercion. The leading coalition party had emphasised the issue of social solidarity as its political priority.

Main content of amendments

Thus, in June 2006, the President of Poland, Lech Kaczynski, presented a number of amendments to the 1981 act. The major revisions included the following:

• PIP’s scope of responsibilities are widened, with new control prerogatives concerning legality of employment;

• labour inspectors are given the right to enter any workplace on presentation of identification without prior notice in order to examine the safety of working conditions;

• the maximum fine for employers for breach of employee rights is increased to PLN 30,000 (approximately €7,760).

Reaction of the social partners

In August, the draft was discussed by the Tripartite Commission (Komisja Trójstronna, KT) and received mixed reviews. In general, the trade unions seemed satisfied with the new proposal, whereas the employer side was more critical towards the draft. In particular, employer organisations claimed that intensified control activities of labour inspectors would cause an additional burden for enterprises, already complaining about over-regulation of economic life. The draft proposal has since been submitted to the parliament and is currently being considered in parliamentary committees.

Tough penalties for unlawful practices

Apart from the amendments to the National Labour Inspectorate Act of 1981, further draft legislation being prepared by President Kaczynski is a source of concern to employers. The forthcoming legislation pertains to responsibility for employee rights violation. The draft proposal is to include tougher penalties for unlawful practices by employers. Criminal offences – such as persistent breach of employee rights or failing to report an accident at work to the authorities – could result in a fine of up to PLN 20 million (€5.17 million), or 20% of the enterprise’s annual revenue, while misdemeanours such as delays in wage payments could result in a fine of up to PLN 100,000 (approximately €15,860).

Employer concerns

Again, employer organisations are unhappy about these latest proposals, arguing that most cases of legal violations on the part of businesses are due to constant changes in the national legislation. Moreover, employers are annoyed by a certain distinction introduced by the upcoming draft proposal: under the proposed regulation, the category of ‘employers’ is narrowed to include only commercial operations, while public institutions, such as central and local government, are excluded – thus exempting them from the new strict measures. According to the employer organisations, such a distinction would in fact instigate inequality of employers of various types before the law; such discrimination would likely be found unconstitutional.

Jan Czarzasty, Institute of Public Affairs (ISP) and Warsaw School of Economics (SGH)