Mixed reaction to anti-crisis legislation

In July 2009, the Polish parliament adopted an anti-crisis legislative package. While the package follows the general direction set out by the bipartite agreement reached by the social partners in March, some of the original concepts provided by the agreement have been omitted in the legislation. The social partners seem moderately satisfied with the outcome, while public reaction to the regulations was mixed.

From autonomous agreement to government legislation

The autonomous agreement on combating negative effects of the economic slowdown reached by the peak national social partners in March 2009 received public praise and was considered a success of social dialogue. The social partners’ anti-crisis package was then presented to the government, which was to incorporate the agreement’s provisions into draft legislation in order to submit it to the parliament (Sejm) for adoption (PL0906019I). In early July, the government put forward two draft bills, which were subsequently passed into law without much delay – despite trade union concerns (PL0907019I).

Government anti-crisis regulations

The government’s package of anti-crisis legislation includes an amendment to the Personal Income Act and a bill to alleviate the effects of the economic crisis by rendering working time more flexible and offering financial support to companies in difficulty. The regulations are all temporary and remain in force until the end of 2011.

The amended Personal Income Tax Act allows for tax exemptions on allowances paid by trade unions and on company benefits in the form of vouchers for goods or services.

The Act on Alleviation of Economic Crisis Effects on Employees and Employers provides for the flexibilisation of working time combined with public subsidies for enterprises suffering from ‘temporary financial difficulties’. These are defined as a ‘decrease in sales by at least 25% experienced over three consecutive months after 1 July 2008, compared with the sales volume over a similar period between 1 July 2007 and 30 June 2008’.

In order to take advantage of the state subsidies, enterprises are expected to have duly paid all of the social security and health contributions for their staff, as well as all of the taxes due. The financial support offered by the state is primarily destined for company training funds to cover costs of vocational training and continuous education from the Labour Fund (Fundusz Pracy) for periods of up to six months in the case of vocational training or up to 12 months in the case of postgraduate studies. The act also includes provision for partially covering wage costs of employees whose working time has been reduced or who are temporarily off work due to a halt of operations. In this case, the subsidies will be taken from the Guaranteed Employee Benefits Fund (Fundusz Gwarantowanych Świadczeń Pracowniczych, FGŚP) and granted for a period of up to six months.

The flexibilisation of working time is to be achieved through various measures. The reference period for calculating working time has been increased from four to 12 months, and a 24-hour work cycle of flexible working hours has been introduced. Moreover, companies have the possibility to reduce the contractual working time by up to 50% over a period of up to six months. New regulations have also been introduced regarding fixed-term employment contracts, which are now allowed to last for a period of up to 24 months.

Trade union and expert reactions

The trade unions were dissatisfied with the regulations on fixed-term employment contracts. They had hoped for more restrictive measures in this regard, reflecting the social partner agreement’s provision for introducing greater restrictions on this type of employment. However, the government’s predilection for tight constraints on such employment contracts evaporated as the macroeconomic slump proved not as severe as previously expected. As a result, the new legislation effectively suspends until the end of 2011 the Labour Code Clause 25/1 stipulating that only two consecutive fixed-term employments contracts are allowed and that any subsequent contract is by law a permanent employment contract. For this reason, trade unions as well as parliamentary opposition parties accused the government of restraining employee rights.

Several experts commented on the issue of eligibility for public subsidies set out by the new legislation, pointing out that the conditions to be fulfilled by enterprises are relatively strict, while also being incoherent. The flexible working time patterns, nonetheless, have been reviewed rather favourably.

Commentary

The new legislation package came into force in August 2009. It is thus too early to assess its impact; yet, it has already been criticised by the employers, as well as a number of labour market and economic experts. The social partners, and the trade unions in particular, are apparently not entirely satisfied with the outcome. They claim that the government has ignored a substantial part of the original anti-crisis package provided for in the agreement that the social partners jointly drafted. Ultimately, the government seems to have brought forward its own agenda, embracing only those features of the bipartite agreement that fit with the dominant line of its current public policy.

Jan Czarzasty, Institute of Public Affairs (ISP)

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