Employees increasingly assertive in pay demands

Polish employees are putting forward ever-new demands for wage increases. This attitude may come as some surprise given the steady increase in unemployment in recent times. Trade union representatives, however, argue that they cooperated with business owners and management during the financial crisis in 2009 and that – now that the Polish economy seems to be recovering – there is no reason why this soft approach to employee benefits should be continued.

Economic situation in Poland in early 2010

Estimates from the Polish Central Statistical Office (Główny Urząd Statystyczny, GUS) indicate that the country’s gross domestic product (GDP) grew by about 1.7% in 2009 year-on-year. The government welcomed this result, and it looks particularly respectable compared with the GDP figures for other European countries. However, the optimistic picture is marred by two issues. Firstly, the increase in GDP during 2009 was lower than in previous years. Secondly, the slight rise in GDP was accompanied by an increase in unemployment and by a decline in the total number of workers actively employed in the Polish economy.

The complex circumstances shaping the economic and social dynamic throughout 2009 have led many employees to refrain from coming forward with wage demands. Nevertheless, the recent news of the first signs of an economic recovery are now encouraging some workers to abandon what they considered to be a meek attitude and to call for pay rises.

Trade unions seeking wage increases

As of early 2010, trade unions are taking an offensive stance in relation to pay demands. One protest aiming to secure pay increases was held at the metalworking company Zakłady Wyrobów Metalowych SHL S.A. in the southeastern city of Kielce, which in 2009 cut its workforce by 100 employees to 330 persons. In support of their demands, the trade union officials argue that, when the circumstances – that is, the peak of the economic crisis – called for it, they responsibly joined their employer in planning for the company’s future and that it is now up to the employer to accommodate their pay demands.

A similar approach is being taken by the Independent and Self-Governing Trade Union ‘Solidarity’ (Niezależny Samorządny Związek Zawowody ‘Solidarność’, NSZZ Solidarność). Its members at the automobile plant of the Fiat Group in the southern city of Tychy stepped forward in January 2010 with demands for a PLN 650 (€164 as at 23 February 2010) pay rise per month. However, only some of the trade union organisations active in the Tychy plant are backing these demands; others fear that the factory’s Italian owners are considering a scenario under which the new Fiat Panda car model would be manufactured in Italy (IT1002019I), a decision which would most likely entail redundancies in Poland.

Another company whose employees are advancing pay demands is the Kompania Węglowa coal mining agglomerate, with a workforce of 65,000 persons; yet another is KGHM Polska Miedź S.A., the copper mining group with 18,500 employees. In the latter case, the debate is not limited to pay issues; trade union activists have launched an internet campaign in an effort to have KGHM recognised as a strategic company which cannot be privatised. As matters currently stand, the Polish State Treasury is planning to divest 10% of the shares in the company; its aggregate stake amounts to 41% of KGHM’s share capital.

Employer reactions to pay demands

It appears that the trade unions can hope that their demands will be partly met. Uncertainty prevails as to the economic situation in the spring of 2010. The proposals made in response to the trade union demands can probably be described as moderate; the management of Fiat, for instance, has agreed to offer a pay increase of PLN 100 (€25). However, employer organisations such as the Polish Confederation of Private Employers ‘Lewiatan’ (Polska Konfederacja Pracodawców Prywatnych ‘Lewiatan’, PKPP Lewiatan) have urged caution in respect of pay increases.

Commentary

It is beyond dispute that, given the economic climate prevailing around the world, companies must be careful in formulating long-term plans. Nevertheless, some employers appear to have yielded to the temptation to economise at the expense of their employees, even if the overall standing of their company seemed stable enough. Be that as it may, the overall economic situation remains uncertain. This has not stopped the trade union organisations in Poland from initiating a debate on the minimum legal wage, arguing that it should be increased to 50% of the average monthly salary – from the present 42% – and that this issue should be urgently discussed by the Tripartite Commission for Social and Economic Affairs (Komisja Trójstronna ds. Społeczno-Gospodarczych).

Piotr Sula, Institute of Public Affairs (ISP)

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