EIRO 2005 ANNUAL REVIEW

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1. Political data

The Polish political calendar for 2005 was a very busy one. In September, Poles cast their votes for representatives in Parliament; October, meanwhile, witnessed a two-round presidential election (PL0510103F).

The parliamentary election brought another corroboration of the principle governing the Polish political scene since 1989 whereby the ruling camp never succeeds in retaining its power beyond the next election. In a surprise outcome, the first place in the election was taken by the conservative Law and Justice party (Prawo i Sprawiedliwosc, PiS), which came in slightly ahead of the liberal Civic Platform (Platforma Obywatelska, PO), which had held the lead in most pre-election surveys. The two parties took 27% and 24% of the vote, respectively. In the tally of votes for the Senate, the PiS lead was much more decided.

The parliamentary elections brought a debacle for Poland’s left; the Democratic Left Alliance (Sojusz Lewicy Demokratycznej, SLD), which controlled the government since 2001 - its image tattered by a succession of high-profile scandals involving its politicians - took a mere 11% of the vote. The Polish Social Democrats (Socjaldemokracja Polska, SdPL), a new party established by dissenting SLD members, failed to clear the 5% hurdle and did not enter Parliament at all. Apart from the three parties already mentioned, parliamentary seats were also taken by the populist Self-Defence (Samoobrona Rzeczpospolitej Polskiej, Samoobrona), by the rightist League of Polish Families (Liga Polskich Rodzin, LPR), and by the Polish Peasants’ Party (Polskie Stronnictwo Ludowe, PSL).

In accordance with pre-election expectations, the two winners, PiS and PO, embarked on coalition talks geared at forming a joint government. In practice, however, these talks didn’t get off the ground, among other reasons due to the fact that the presidential election soon came down to a bitterly contested runoff between Lech Kaczynski of PiS and Donald Tusk of PO. Tusk won the first round of the presidential ballot (held on 9 October), but he failed to secure the absolute majority stipulated by Polish electoral law. The second round (held on 23 October) went to Lech Kaczynski, hereto the mayor of Warsaw (and the twin brother of Jaroslaw Kaczynski, the PiS party chairman), who walked away with 55% of the vote.

This double electoral triumph of PiS did not seem to help the coalition negotiations, which eventually broke down. PO became an opposition party, and no other coalition formula was devised in lieu of the much anticipated alliance between PiS and PO. Kazimierz Marcinkiewicz, designated by PiS as prime minister, and his cabinet were eventually installed by a somewhat loose alliance forged on an ad hoc basis with the three smaller parties in parliament (obviously SLD was not involved); Jaroslaw Kaczynski, perhaps the logical choice for premier, decided not to seek that post to avoid an ambiguous situation. Thus, PiS now finds itself running a minority government, forced to bargain for support before every parliamentary vote. A major test for the PiS government will be presented in the next few weeks in the vote on the national budget, inherited from the SLD-supported government of Marek Belka. Dissolution of the Polish parliament and early elections remain a real possibility, especially if the budget will not be accepted.

Elections for the local self-government bodies are scheduled for 2006.

2. Collective bargaining update

The State Labour Inspection (Panstwowa Inspekcja Pracy, PIP), charged with the registration of collective labour agreements, yet has to publish official figures for the year 2005. Accordingly, we are in no position to provide details concerning the number of agreements executed last year. We will, however, endeavour to assess the incidence of collective labour agreements.

The industrial relations scene in Poland generally operates subject to the rule that an enterprise which has a trade union active among its workforce is likely to be covered by a collective agreement. According to the Public Opinion Research Center (Centrum Badania Opini Spolecznej, CBOS) surveys, some two-fifths of Polish employees work in entities with a union presence; by way of a simple analogy, then, it can be ventured that roughly two-fifths of Polish employees benefit from a collective agreement.

Other studies - concentrating on the steel and iron processing, coal mining, power generation, and railway transport industries - suggest that the occurrence of collective labour agreements may be even wider. A collective labour agreement was found to apply in more than 90% of the entities operating in these four sectors. Of course, these four branches of the economy are traditional union strongholds, so any extrapolation of this data must be pursued with caution; that said, study of these four industries yields some interesting observations concerning the provisions of collective agreements.

• Pay: The provisions regulating pay are a touchy subject, with only slightly more than half of the respondent union activists conceding that their collective agreements do a good job of addressing this issue. The general tendency is for collective agreement provisions concerning wages to be drafted in reliance on projections of the Central Statistical Office for Poland (Glówny Urzad Statystyczny, GUS) and of the National Bank of Poland (Narodowy Bank Polski, NBP).

• Working time: The working time provisions received a positive assessment from almost 88% of union members and from more than 90% of managers. It appears safe to assume that, when it comes to questions of working time, most collective agreements simply reiterate the provisions laid down in the Polish Labour Code, as was the case in previous years.

• Job security: No data available.

• Equal opportunities and diversity issues, including efforts to close pay inequalities: No data available.

• Training and skills development: No accurate information is to be had as to the extent to which training and skills development might be regulated by collective agreements. One would assume that this is a topic of secondary importance in collective bargaining; some 80% of the respondent union activists and managers nonetheless consider the relevant provisions to be satisfactory.

• Any other issues which have featured significantly in your country: By the end of 2005, the minister charged with labour issues had registered 165 collective agreements applying to more than one employing entity. Agreements of this sort were executed, among other groups, for employees of the local-self-government working in education (but not being professional teachers) and in utilities, public sector employees, and for employees of:

  • the power generation sector;

  • brown coal mines;

  • the metal processing industry;

  • the defence and aviation industries;

  • member entities of the Union of Railway Employers (Zwiazek Pracodawców Kolejowych, ZPK);

  • Telekomunikacja Polska S.A., the national telecom operator.

By and large, the provisions of these agreements are assessed somewhat less favourably by the employees actually covered by them.

3. Legislative developments

2005 saw the enactment or material amendment, or the effective coming into force, of the following statutes of relevance to industrial relations in Poland.

In June 2005, the Trilateral Commission received new powers with respect to adjustment of pension and disability benefits. Now, the index for these benefits’ adjustment is to be defined by way of negotiations within the Trilateral Commission, irrespective of the inflation rate (PL0507102N). 2005 also saw some changes of the laws regulating social dialogue at the regional level (PL0502105F).

The legislative Act regarding employment promotion and labour market institutions received a major overhaul in July 2005 (PL0508102N). Some of the changes arose from the need to adapt the statute to pertinent provisions of the legislative Acts regarding freedom of business activity (PL0410109F) and regarding the National Development Plan (PL0411103F). Another change, intended to facilitate legal employment of household help, had the objective of shrinking the grey area in which most domestics in Poland work and earn their pay. However, the results of the new legislation observed so far have been quite disappointing as only a low number of housekeepers have come out of the shadow economy.

Seeing as the previous Parliament had not prepared a statute concerning bridge pension benefits, the mining unions brought pressure to bear on the new assembly, leading to the adjustment of the legislative Act regarding pension and disability benefits from the Social Insurance Fund so as to guarantee retirement rights to all miners who had worked underground for 25 years, irrespective of their age. The same round of amendments also extended early retirement rights to remaining employee groups working under special conditions through the end of 2007 (PL0508101N). These changes were opposed by the previous cabinet, and also by employer organisations. Yet, in the end, the amendments became law, and the application for a finding that they are unconstitutional - as submitted to the Constitutional Tribunal (Trybunal Konstytucyjny, TK) by the Belka cabinet in October 2005 (PL0508101N) - was withdrawn by that cabinet’s successors in power. The Polish Confederation of Private Employers has announced its intent to once again bring the miners’ pensions before the Constitutional Tribunal.

July 2005 also witnessed the amendment of the legislative Minimum Wage Act (PL0507104F). The method of defining the minimum remuneration was changed; it will now be increased every year by the inflation index plus two-thirds of the GDP increase, until such a time as it attains half the average monthly salary in Poland (at the moment of the amendment, this proportion stood at 35%).

The Minister of the Economy and Labour’s ordinance concerning entry in the register of entities managing employment agencies and the information submitted by employment agencies was amended in October 2005.

Perhaps the single legal development with the greatest importance for the long term is presented in the proposal for enactment of a new Labour Code. To be accurate, the proposal drawn up by the Labour Law Codification Committee actually speaks of two separate codes, one dealing with individual employment law and the other with collective employment law (PL0510105F).

4. The organisation and role of the social partners

The year 2005 did not bring any appreciable improvement in the situation of the trade unions. CBOS survey data indicates that, in 2005, some two-fifths of all Polish employees worked in enterprises in which there was a union presence. Of these, slightly more than half declare that there is more than one union active at their workplace. More than half of the employees working in enterprises with a union presence admit to union membership. Every fifth hired employee is a union member.

A considerable swath of the Polish economic landscape continues to be a union desert dominated by employers.

Some are tempted to argue that 2005 may have been a transitional year for trade unions in Poland. The flirtation of PiS politicians with unions before the elections are looked to as a source of some promise for the future now that PiS has installed itself in power.

Some tensions flared up between the unions and the employers. All-Poland Alliance of Trade Unions (Ogólnopolskie Porozumienie Zwiazków Zawodowych, OPZZ), the second largest union organisation in Poland, held a demonstration outside the headquarters of the Polish Confederation of Private Employers Lewiatan (Polska Konfederacja Pracodawców Prywatnych Lewiatan, PKPP Lewiatan). Many commentators viewed this as testifying to a renewed politicisation of social dialogue, to the detriment of the Trilateral Commission; they fear that the latter may have become little more than an arena for confrontation between employees and employers.

5. Industrial action

According to data from the Central Statistical Office for Poland, seven strikes were registered in the first six months of 2005; they involved 1,580 employees - 34.6% of the combined workforce at the enterprises concerned. The figures for the analogical period in 2004 were as follows: two strikes, 217 participants, 7.9% of the total workforce. Working time losses due to participation in strikes amounted to 3,200 man hours, which comes to approximately 2 hours for every strike participant (as juxtaposed with 2,900 man hours and 13 hours per participant in the first half of 2004); this working time loss roughly coincides with that for all of 2004. While official data for the latter half of 2005 has not been released yet, tensions and conflicts in the area of labour relations have shown little sign of abatement. 2005 also witnessed some 30 protests, demonstrations, pickets, and similar occurrences. The most notable protests were in:

• Health care. Most protests by medical personnel were concentrated in the first six months of 2005, when the programme for restructuring public health care in Poland was introduced;

• Telekomunikacja Polska. The employees were protesting against the planned redundancies; the climax arrived in May 2005, when TP employees (a significant stake in the company is held by France Telecom) were joined by those from other enterprises controlled by French investors for a march in Warsaw, apparently protesting against French capital in general;

• The automotive industry. Every few months, a protest flared up at some company in the sector, with employees contesting remunerations and employment downsizing;

• Mining. In what has become something of a regular ritual, miners descended in force on central Warsaw to vent their grievances, some in a rather violent fashion.

6. Employee participation

In March 2005, the Polish government passed a legislative Act regarding the European economic grouping and the European company. The statute devotes much attention to employee participation in management of the European enterprise. Employees of actual or prospective European enterprise members are represented by a special negotiation team, which is charged with agreeing with the management of the companies the terms of employee involvement in running the European enterprise. The negotiation team is convened promptly upon announcement by the participating companies of their intent to - as appropriate - merge, establish a European enterprise holding, to transform a joint stock company into a European enterprise, or to establish a European enterprise subsidiary. The participation of the European enterprise employees (and also of the employees of its subsidiaries, branches and of their representative bodies) in the EE’s management essentially boils down to the right to appoint, designate, or recommend supervisory board and/or administration council members or to object to candidatures - up to the highest number occurring in the participating companies before the European enterprise’s registration.

A legislative Act regarding information and consultation, meanwhile, is still somewhere in the pipeline. Although they held many meetings on this topic, the social partners have not been able to attain a compromise as to the final formula governing operation of employee councils. The European Commission, meanwhile, has set - in late 2005 - an absolute two-month deadline for adoption of this statute. The new government, prodded on by an increasingly less indulgent Commission, submitted to the social partners yet another draft and invited their comments. During the ensuing negotiations, the government went so far as to ask the unions and the employers to reach a joint position which the government - as it promises - will accept no matter what its details.

7. Labour migration

Poland is one of the countries which have consistently supported the Bolkenstein Directive. From the perspective of Poland, the opening of labour markets and practical implementation of the principle of free movement of people are very important objectives. In 2005, the Polish government launched a media campaign addressed to citizens of the older EU member states in which the Polish plumber and the Polish nurse - the two symbolic bogeymen summoned in the West in substantiation of the fears of a deluge of immigrant workers from the East - are put to work in an attempt to topple negative stereotypes about Polish workers or, indeed, Poland in general.

Following Poland’s accession to the European Union on 1 May 2004, only three older member states chose to open their job markets without restriction. Two of these, the United Kingdom and Eire, have become the destination of sizeable numbers of Polish job seekers. It is estimated that, at present, there may be up to 150,000 Poles in Eire, with 52,271 Poles applying for an Irish social insurance number through the end of June 2005 (official Irish figures). Britain, meanwhile, has registered 170,000 applications by Poles for entry to the employee register between May 2004 and September 2005.

Sweden, the third of the countries which opened its gates to workers from the new member states, has drawn considerably less Polish migrants (even though it has been a prominent destination for Poles in the past). The Swedish authorities have registered some 13,000 applications for residency permits from Poles by the end of 2004.

For a fuller picture, it should be added that Polish workers have also headed out to a number of other older member states which have opened their labour markets subject to certain restrictions. Germany is proving to be an invariably popular destination, taking in approximately 350,000 officially registered Polish employees (most of whom work on a seasonal basis). Through August 2004, Italy has issued 37,000 work permits to Polish citizens; in the same period, the number of Polish employees officially working in Holland attained 20,000.

At home, these travels to the fifteen older EU countries are alleviating the effects of persistently high unemployment, especially in the less economically developed regions of Poland.

8. Corporate social responsibility

Research by many academic centres points to the existence of a number of factors limiting or impeding the implementation of standards and safeguards for good corporate citizenship. These include the precarious economic standing of many Polish companies, low levels of consumer awareness, and an archaic management culture (especially in the SME sector). Penetration of the corporate social responsibility ethic is also slowed by high unemployment, which fosters feelings of impunity among less scrupulous employers and of helplessness among the workforce.

As a result, every year sees an increase of Poles declaring their desire to work in the public sector; those hoping for careers in the private sector appear to be a minority. The prevailing view among survey participants is that private business owners take advantage of the high unemployment rates and of the weakness of union organisations to abuse their workers; thus, the public sector is elevated to the status of a safe haven of sorts.

The social partners are aware of this problem, and they have been active in the promotion of responsible corporate practices. One expression of their concern is presented in the programme, now underway, entitled Improving Awareness re Corporate Social Responsibility, focused first and foremost on the small and medium-sized enterprise sector.

The Forum of Responsible Business is a new non-governmental organisation dedicated to corporate responsibility issues. It cooperates with 20 strategic partners and, occasionally, with the public administration and the social partners. The Forum promotes responsible business, assists enterprises in implementing CSR practices, and cooperates with the business community for the good of society at large.

9. New forms of work

Autonomic negotiations on implementation of the telework agreement, as pursued by the social partners as part of the European Integration Round Table, have made considerable progress. The newest round of talks is scheduled for January 2006.

Temporary work continues to be considerably less prevalent in Poland than in the fifteen older EU countries. While accurate data is hard to come by, estimates of the number of temporary workers approach 200,000. There are more than 400 employment agencies operating in Poland; according to the Union of Temporary Work Agencies (Zwiazek Agencji Pracy Tymczasowej, ZAPT), a group assembling large temporary work placement firms, 2004 has seen a marked increase of their activities (between them, the Union’s members have some 65,000 employees). In February 2005, another trade association - the Employment Agency Association (Stowarzyszenie Agencji Zatrudnienia, SAZ) - was established, initially with 12 members.

Various part-time work schemes are becoming more common, particularly in the services sector. Employing workers part-time is a common practice among the large hypermarket chains operating in Poland.

10. Other relevant developments

One item worth mentioning here is the declaration by Lech Kaczynski, Poland’s new president, of his intent to foster the reconstruction of social dialogue in the country. As Kaczynski settled in in the presidential palace, a delegation of Solidarity union officials was among the first to visit him; press commentators have interpreted this in terms of not only a harbinger of new and improved relations with the unions, but also as a courtesy call following the successful election in which Kaczynski benefited from Solidarity’s endorsement.

11. Outlook

In its electoral programme, the new Polish government vowed to safeguard employee interests. Accordingly, many observers are now likely to watch the new cabinet closely to see how good this promise may be in practice, and the first assessments should not be long in coming. One of the first tests will be presented in the legislative Act regarding information and consultation, which must be passed before elapse of the imminent deadline.

The Polish Labour Code will likely be another area worth watching; there is a consensus that it is ripe for significant amendments. The question of whether the new Code will be one favouring employees or employers remains open.

There is also the possibility that the new government will seek to back up its slogans about solidarity- a term pregnant with connotations in the Polish public discourse - with efforts towards a wider social contract concentrating on issues of unemployment. (Jan Czarzasty, Rafal Towalski, Institute of Public Affairs (Instytut Spraw Publicznych, ISP) and Warsaw School of Economics (Szkola Glówna Handlowa, SGH)