Delays in payment of wages increase

Download article in original language : PL0210105NPL.DOC

Surveys of private sector enterprises in Poland have found a growing tendency among employers to delay the payment of wages in recent years. For example, in 2001 the State Labour Inspection found that nearly two-thirds of companies audited breached regulations in this area. Late payment was initially restricted to small firms, but has recently become common in large enterprises as well.

The provisions of the Polish Labour Code concerning remuneration are clear: Article 85 stipulates that 'remuneration should be paid at least once a month by the date determined in advance', while, according to Article 94, 'remuneration should be paid in a regular and timely manner'. These provisions, however, have been repeatedly violated.

In 2001, the State Labour Inspection (Państwowa Inspekcja Pracy) carried out more than 1,700 audits in enterprises employing a total of 155,000 persons. The aims of these audits included checking whether employees' rights are observed. The inspectors found that pay regulations were violated in 62% of the audited enterprises. The average amount of back wages amounted to PLN 1,000 per employee in these enterprises, representing a growth of 34% over the previous year. When asked why wages were paid irregularly, 45% of employers pointed to cash-flow problems, which they said were caused by customers not meeting their commitments on time. It should be noted that this argument was used only by 22.5% of employers during the audits in 1999. Research conducted among small and medium-sized private enterprises in 1999-2000 found that 'wages are often late and irregular, which means that employees actually provide a credit for employers ... While it is true that employers might have had cash-flow problems, they seem to have easily accustomed themselves to taking short-term credit from their employees, and often resort to that practice' (A returning class. The private sector in the Third Republic of Poland, J Gardawski, Warsaw 2001).

The national commission of the Independent and Self-Governing Trade Union (Niezależny Samorządny Związek Zawodowy Solidarność, NSZZ 'Solidarność') is currently conducting a survey on employment relationships in large enterprises. The analyses conducted to date confirm that delays in the payment of wages have become increasingly common. In the 115 defaulting enterprises analysed to date, wages have been temporarily suspended in 66% in cases, and not paid at all in 9%. According to the preliminary findings, recently privatised enterprises and healthcare institutions (hospitals and daycare clinics) are strongly represented on the list of defaulting employers.

One of the most notorious companies for late salary payments is the Szczecin Shipyard, which stopped paying its 10,000 employees in March 2002 (although it has recently resumed pay-outs) (PL0207101N). Other prominent examples include the Jelcz Silesian Car Factory, where wages are paid with a few months delay, or the Biston-Bial Machine Factory in Białystok, whose employees have not been paid for six months. Not long ago, there was widespread public shock over events at Odra, a clothing factory that had not paid its (female) sewing staff for several months. The women asked the workers at the Szczecin Shipyard, who were on strike at the time, for help. Scenes of shipyard workers assaulting the president of Odra’s management board were filmed and broadcast on television. The police, who were present during the incident, did not intervene (one high-ranking police officer was eventually dismissed, while the workers who assaulted Odra’s president are facing trial). The incident led to a change in the management board and a partial payment of back wages. However, on the whole, the market situation is so bad that employees, particularly those in small firms, accept delays in the payment of wages, as do the trade unions. Very rarely do workers go on strike because they are not paid on time.

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