Social partners agree minimum wage in construction
In February 2003, trade unions and employers' organisations in the Polish construction sector reached agreement on a minimum wage rate for 2003, which is 50% above the national statutory minimum wage. The deal is seen as an important development in industrial relations in the industry.
In February 2003, a meeting was held between the following construction sector employers' and trade union organisations:
- the Federation of Construction Industry Employers and Enterprises (Federacja Pracodawców i Przedsiębiorców Przemysłu Budowlanego);
- the National Union of Construction Employers (Krajowy Związek Pracodawców Budownictwa);
- the National Construction Section (Krajowa Sekcja Budownictwa NSZZ Solidarność) of the Independent and Self-Governing Trade Union Solidarność (Niezależny Samorządny Związek Zawodowy Solidarność, NSZZ Solidarność);
- the National Construction and Timber Industry Secretariat (Krajowy Sekretariat Budownictwa i Przemysłu Drzewnego NSZZ Solidarność) of NSZZ Solidarność;
- the BUDOWALNI Trade Union (Związek Zawodowy BUDOWLANI).
This meeting culminated in agreement on a minimum hourly pay rate for construction and installation work carried out in Poland in 2003, which was set at EUR 1.80. The 2003 statutory national minimum monthly wage for the whole economy (PL0211109F) - EUR 191, based on an average full-time working time of 162 hours - was used as the basis for the minimum rate in construction. The national minimum rate works out at EUR 1.20 per hour, and this was increased by what are known as the 'basic encumbrances'- retirement fund contributions, Labour Fund (Fundusz Pracy) contributions (PL0212106F) etc - as well as supplementary contributions applicable to the construction industry - holiday entitlement, the allowance for work clothes etc. As a result, the minimum wage in the construction industry for 2003 should exceed the minimum wage for the Polish economy as a whole by more than 50%.
The construction minimum wage rate applies from the date of the agreement’s conclusion until the next adjustment is effected. Adjustments are allowed for in response to changes to the statutory national minimum wage and in other remuneration-related laws which have an impact on calculation of the minimum wage.
The parties to the agreement hope that the majority of employers active in the construction sector will abide by the new minimum wage. They have also declared their willingness to apply all legal and organisational measures needed to make the agreed minimum wage an effective instrument in combating unfair competition within the industry. The parties see the negotiation of minimum pay rates as addressing the need for active involvement in the 'rationalisation of labour' in the construction industry, and as fostering conditions conducive to fair competition and the prevention of violations of labour law.
Poland is generally regarded as having an underdeveloped sectoral social dialogue - as indicated, for instance, by the small number of sectoral collective agreements (PL0210108F). This is particularly manifest in those sectors of the economy where state ownership is marginal and the development level of the social partners low. According to commentators, the fact that trade unions and employers’ organisations in the construction sector – dominated as it is by private ownership – have reached agreement on a minimum wage may constitute an important step towards a better organisation of industrial relations in this sector. Importantly, this gradual process of institutionalising industrial relations in construction was set in motion by the social partners rather than by the state.