2003 Annual Review for Poland

This record reviews 2003's main developments in industrial relations in Poland.

Political developments

The ruling left-wing coalition of the Democratic Left Alliance (Sojusz Lewicy Demokratycznej, SLD), the Labour Union (Unia Pracy, UP) and the Polish Peasants Party (Polskie Stronnictwo Ludowe, PSL), which came to power after the 2001 parliamentary elections, split up in March 2003. The PSL left the government of Prime Minister Leszek Miller and the SLD-UP coalition continued in office as a minority government. However, a number of independent deputies backed the government in numerous important votes.

A sharp decline in the popularity of the government (in December, its approval ratings fell to as low as 18% in public opinion polls) prompted speculations about a possible reshuffle or even the dismissal of the cabinet. This did not take place, but several members of the cabinet lost their jobs during the year. In June, the Deputy Prime Minister and head of the Ministry of Finance (Ministerstwo Finansów, MF), Grzegorz Kołodko, resigned after criticism from both inside and outside the government of his programme for repairing public finances that was to be launched in the spring of 2004.

Mr Kołodko’s successor as the Deputy Prime Minister in charge of economic policy was Jerzy Hausner, who also became the head of a new Ministry of Economy, Labour and Social Policy (Ministerstwo Gospodarki, Pracy i Polityki Społecznej, MGPiPS) consisting of two previously separate ministries. Mr Hausner soon came up with a rigorous programme (the 'Hausner plan') on public expenditure reductions (PL0312107F) in order to prevent a further increase in the national budget deficit (4.8% of GDP in 2003) and public debt (51.5% of GDP in 2003). The main proposals included: cutting public administration costs; auditing state-operated earmarked funds and State Treasury (Ministerstwo Skarbu Państwa, MST) agencies; decreasing public expenditure of proven poor efficiency (in particular in forestry and agriculture); merging selected government bodies; increasing efficiency in government revenue collection; changing the financing of national defence; altering public aid policy; and restructuring coal mining, national railways and healthcare. Another objective was a profound reform of the social security system, aimed at: gradually equalising the retirement age for women and men at 65 years; changing disability pensions policy; returning people with disabilities and older workers (over 50) to the labour market; and changing pensions policy for farmers.

A referendum on EU membership was held in June. A relatively high turn-out (59%) and the fact that the vast majority of those voting (77%) were in favour of joining the EU confirmed the high degree of 'euro-enthusiasm' that has consistently prevailed in Poland since 1989.

In the final monitoring report on the accession countries’ readiness to join the EU, published by the European Commission in November 2003, Poland was found to be the least prepared candidate. Nine areas of 'serious concern' (out of 41 identified by the Commission), where preparations for membership were not satisfactory, were related to Poland. Therefore, during the first four months of 2004, Poland will have to make a concerted effort to meet the accession requirements prior to joining on 1 May.

The most important political event of 2004 will be the elections to the European Parliament, the first in which Poland will participate. 2004 will also see preparations for the presidential elections in 2005, when the highly popular Aleksander Kwaśniewski will leave office after serving his second term.

Collective bargaining

Collective bargaining has relatively little overall impact on industrial relations, with many issues regulated either by legislation or by tripartite bodies at national and regional levels. According to data from the State Labour Inspection (Państwowa Inspekcja Pracy, PIP), at the end of 2002, nearly 9,000 single-employer collective agreements were in force. In 2002, 310 new single-employer agreements were registered, covering over 117,000 employees ( PL0308104N). Up to 30 June, 230 new single-employer agreements were registered in 2003, covering approximately 96,000 employees. During the same period, 199 collective agreements at workplace level were suspended partially or entirely. A total of 8,332 single-employer collective agreements were reported to be in force after the first half of 2003.

Multi-employer agreements are still relatively rare and their conclusion is more frequent in the public sector than in the private sector. However, a steady growth in such agreements has been observed in recent years. According to the Ministry of Economy, Labour and Social Policy, there were 157 multi-employer agreements and 137 additional protocols to such agreements (an additional protocol is a legally required form of amendment to an existing agreement) registered with the Ministry as of 30 May 2003, covering approximately 1 million employees working for more than 4,300 employers.

Pay

Bargaining has only a limited role in pay-setting in Poland. Collective bargaining at company level does deal with remuneration, but focuses mainly on components of the remuneration package and their value, principles governing the extension of assorted payments and bonuses and retirement/disability severance (PL0308104N).

In September 2003, after reaching agreement with the social partners in the national Tripartite Commission for Social and Economic Affairs (Komisja Trójstronna do Spraw Społeczno-Gospodarczych) (PL0210106F), the cabinet adopted an ordinance raising the gross minimum wage from PLN 800 to PLN 824 a month. Thus, after remaining unchanged (at PLN 760 a month) for two consecutive years, the statutory gross minimum wage rose overall by 8.4%. The tripartite agreement also provides that until the end of 2005 employers may reduce the minimum wage offered to new labour market entrants by 20% for the first year of employment and by 10% for the second year (PL0312105F).

In February 2003, trade unions and employers' organisations in the construction sector reached an agreement on a minimum wage rate for 2003 set at 50% above the national statutory minimum wage (PL0306102N).

In 2002, the State Labour Inspection found that nearly 70% of audited enterprises breached pay regulations (PL0307102N). According to various surveys, a number of employers delay payment of wages (a tendency regularly observed in recent years). For instance, in a survey commissioned by the Warsaw School of Economics (Szkoła Główna Handlowa, SGH) conducted in May 2003, over 8% of surveyed employees stated that they had not been paid their remuneration on time. The problem seemed more acute in private enterprises than in public companies. An earlier survey (in October 2002) produced very similar results in relation to the general workforce, though it found that employees working in public administration and services suffered most frequently from late payment.

According to the Central Statistical Office of Poland (Główny Urząd Statystyczny, GUS), average earnings rose by 2.6% in the year to November 2002, having increased by 3.4% in 2002.

Working time

Working time issues - such as the rules for various working time systems, schedules and settlement periods - are an important theme in company-level collective bargaining (PL0308104N). Relatively few collective agreements include working time provisions more favourable to employees than those stipulated in labour legislation, though some provide for a shorter working week or more favourable terms governing matters such as overtime and work on Sundays or holidays. Official weekly working time, as stipulated by the Labour Code, is 40 hours (with a number of exceptions for certain occupations and activities) (PL0308102F).

According to GUS, the actual weekly hours of full-time employees stood at 41.9 hours (for an employee’s main job) at the end of third quarter of 2003, compared with 40.3 hours at the end of the third quarter of 2002. The average number of hours worked in an employee’s main and additional job together was 43 hours a week in the third quarter of 2003, compared with 41.3 hours a week a year earlier. Men tend to work longer hours than women: in 2003, the average number of hours worked in a person’s main and additional job was 45.5 hours a week for men and 39.7 hours for women, while in 2002 the figures were 43.9 and 38.2 hours respectively (all figures as of the end of the third quarter of each year).

Job security

In summer 2003, the French-based food multinational, Danone, took the decision to close one of its plants in Poland by the end of 2004, with the loss of 460 jobs. The company agreed a major social package of financial and job-finding measures to accompany the redundancies, a very unusual move in Poland’s private sector (PL0312101N). Otherwise, little bargaining is reported on job security issues, though the employment effects of restructuring in many industries continued to be a source of conflict during the year (see below under 'Industrial action').

Poland still ranks among the countries with highest unemployment rates in Europe. In November 2003, GUS reported almost 3.1 million jobless people (17.6% of the total workforce). Although the GDP growth rate in 2003 was estimated at 3.6% (compared with 1.4% in 2002), there was no net gain in the number of jobs. Unemployment among young people (aged 15-24) remained particularly high, at 42%. At the same time, the employment rate is low, at 51.7% compared with an EU 15 average of 64.2% (2002 figures from Eurostat). In particular, the picture is least encouraging among the oldest category of workers (aged 55-64), since only one in four people in this age group continues to work.

Equal opportunities and diversity issues

Equality and diversity issues have been a focus of attention for legislators several times in recent years. For example, in 2003 the draft of a new Equal Status Act was prepared and handed over to a parliamentary committee for further work, while a number of new rules were adopted on equal treatment and discrimination (see below under 'Legislative developments'). However, it does not appear that these issues feature to any significant degree in collective bargaining. Pay inequalities have not narrowed and there is a noticeable gap between the average earnings of women and men. According to data collected in an official earnings survey by GUS in October 2002 (the most up-to-date figures available), average gross earnings for women amounted only to 83% of those for men.

Training and skills development

There is no information available about the extent and nature of collective bargaining on training and skills development issues.

Legislative developments

Harmonisation of Polish employment law with EU standards continued during 2003. As a result, it was a very busy year for the legislators. A number of new regulations were passed and the bulk of the legislation adopted in 2002 came into force. The year's main developments were as follows:

  • many significant amendments to the Labour Code that were passed into law in July 2002 (PL0209107F) became effective as of 1 January 2003 (PL0212108F). These included regulations on sick leave, holiday entitlement, business travel, working time, overtime pay, company social funds and trade union organisation. More 2002 amendments came into force in July 2003, introducing new rules on collective redundancies and the protection of trade union activists (PL0306101N);
  • in October 2003, another set of amendments to the Labour Code was adopted. This revision introduced notions that were previously unknown in Polish law, such as direct and indirect discrimination, harassment and sexual harassment, and bullying. Under the new regulations, all these types of behaviour are unlawful and employers are obliged to counteract them. Moreover, certain types of discrimination (based on ethnic origin, religion, sexual orientation, full-time or part-time employment, and fixed-term or open-ended employment) have been explicitly prohibited (PL0311103N). Other issues dealt with include sick leave, working time, annual and childcare leave and the employment of minors (PL0311108F);
  • in July, a Temporary Agency Work Act was adopted. The new law defines temporary agency work and sets out rules governing its use and relating to the employment conditions of agency workers (PL0308103N); and
  • in April, a new law on 'social employment' came into force, aimed at providing support and employment to the country's large number of people faced with social exclusion, such as long-term unemployed people, alcoholics and drug addicts, former prisoners, and people with mental illnesses (PL0306103F). The legislation sets up social integration centres to provide assistance and integration programmes, and creates a system of subsidised employment to encourage employers to take on people from the target groups;

The organisation and role of the social partners

In 2003, a new national trade union centre set up in 2002 (PL0212109F), the Trade Unions Forum (Forum Związków Zawodowych, FZZ), was awarded a seat on the national Tripartite Commission for Social and Economic Affairs (Komisja Trójstronna do Spraw Społeczno-Gospodarczych) (PL0210106F), in line with representativeness criteria laid down in legislation adopted in 2001. During the year, a number of non-governmental organisations (NGOs) received invitations to the Commission’s meetings.

In terms of social dialogue, the key development of 2003 was arguably a failed set of negotiations over a proposed wide-ranging social agreement. In March (PL0307104F), the Minister of Labour proposed a draft 'pact for labour and development' to representatives of trade unions and employers at a session of the national Tripartite Commission. The aim was to come up with a comprehensive solution to address many of the problems currently facing the country. After the Independent and Self-Governing Trade Union Solidarity (Niezależny Samorządny Związek Zawodowy, NSZZ Solidarność) rejected the idea of such a pact, negotiations instead progressed from May over a 'social agreement'. For several months, the negotiations proceeded briskly, and the signing of an agreement seemed close. In early September, employers' organisations and some trade unions agreed a joint position on minimum wages, public sector wage increases and the reduction of taxes on businesses. However, NSZZ Solidarność did not sign up the joint position (PL0309106F). On 2 December, at a plenary session of the Tripartite Commission, the Labour Minister and Deputy Prime Minister, Jerzy Hausner (the Commission’s chair), officially announced the conclusion, without success, of the social agreement negotiations. The main outcome of the whole process was the development of a bilateral dialogue involving the employers’ associations and the trade unions except NSZZ Solidarność, resulting in the agreement in September and another in December.

During 2003, employers’ associations succeeded in a case that they had brought to the Constitutional Court. The Court ruled that certain regulations whereby an expired collective agreement remained in force until a new one was reached violated the Constitution.

Industrial action

No official statistics on strike activity in 2003 are yet available. Nevertheless, it is clear that 2003 was not a peaceful year. While in 2002 only one strike took place, a number occurred in 2003. Major protests and demonstrations were organised by railway workers, miners, steelworkers and public sector employees. The table below lists a selection of major industrial conflicts that occurred in 2003 (these are not based on official statistics on strike activity).

Major industrial conflicts in 2003
Date Sector/company Nature of action Main issues
March Healthcare (Lower Silesia) 12-hour strike Debt-cancellation demands
July Ostrowiec steel works Strike 'Social package' demands
August Fabryka Wagon rolling-stock producer and repairer Strike with 2,000 participants (PL0309104N) Overdue wage payment
August Polish National Railways (Silesia) Strike (claimed to be illegal by employer) (PL0308105F) Job losses
August Stalowa Wola steel works Local authorities’ premises occupied (PL0309103N) Job losses, social benefits, pre-retirement benefits
August Coal mining (Bytom) Strike with 100 participants (PL0309105N) Closure of company
August Tonsil electronics company Collective dispute NA
August Hetman clothing company (Elblag) Company premises occupied Job losses
September Coal mining industry Protest involving 10 miners (PL0310103F) Closure of mines
October Polish National Railways Strike Privatisation plans
October Coal mining Warning strike Closure of mines
October Healthcare (Częstochowa) Picket Contracts
November Coal mining Warning strike with 35,000 participants Restructuring
November Uniformed services Picket NA
November Healthcare Demonstration by 11,000 people Restructuring
November Resanus supported-employment enterprise Company premises occupied by 27 people Wages
November Healthcare, coal mining, railways, fire service 'Protest days' involving demonstrations and pickets around the country, with 50,000 participants (PL0311102N) Government policies
December Polish National Railways Hunger strike with five participants Closure of regional lines
December Polish National Railways Hunger strike with 80 participants and blockades of lines throughout the country Restructuring

Source: Rafał Towalski 2004.

Employee participation

With regard to implementation of the EU national information and consultation Directive (2002/14/EC) (EU0204207F), it should be noted that trade unions are the main channel of representation of workers' interests in Polish companies, though the unions' increasing marginalisation and declining membership tends to hamper such representation. Non-union forms of company-level employee representation exist in some types of enterprises, but such channels - mainly workers' councils and employee representation on supervisory boards - are limited in scope and largely ineffective (PL0208106F). The Ministry of Economy, Labour and Social Policy has for some time been preparing regulations introducing a new non-union institution to exercise employees’ rights to information and consultation.

No developments were reported in 2003 with regard to implementation of the employee involvement Directive (2001/86/EC) linked to the European Company Statute (EU0206202F). National legislation implementing the European Works Councils (EWCs) Directive (94/45/EC) was adopted in 2002 and will come into force when Poland joins the EU. EWCs have so far been established in about 60 out of 250 multinationals based elsewhere that have operations in Poland.

Stress at work

Stress at work was not a specific issue of debate among the social partners during 2003. However, certain factors that might contribute to the level of stress experienced by employees at work (such as bullying and sexual harassment) became a subject of examination and discussion, and appropriate legislation followed (see above under 'Legislative developments').

Poland participates in the work on stress conducted by the European Agency for Safety and Health at Work. Furthermore, the Central Institute for Labour Protection (Centralny Instytut Ochrony Pracy, CIOP) conducts research on stress at work. Recently, CIOP has been working on a project entitled 'direct participation, stress and safety'. The programme (covering 2002-4) aims to apply EU standards to working conditions in Poland.

Undeclared work

Despite a high unemployment rate, there is a growing evidence of the 'shadow economy' in Poland. The level of undeclared work is estimated at 800,000 people. No significant legislative or other developments were reported in this area in 2003.

New forms of work

Telework is not widespread in Poland and there are no official statistics on the subject available, though the number of teleworkers has been estimated at 2% of the adult population. A relatively low level of internet access (17% of the households, according to 2003 research) and the expense of its use (with Poland ranked the third most expensive country after Hungary and Turkey) has prevented the rapid expansion of telework. No specific regulations concerning telework have been implemented so far, although three alternative proposals have been considered: the first advocates adopting new legislation dealing with telework exclusively; the second suggests amending an existing regulation on domestic work; and the third takes the approach that some existing provisions of the Labour Code apply to telework.

Temporary agency work was regulated for the first time in 2003 (see above under 'Legislative developments') and the new legislation came into force on 1 January 2004 (PL0308103N). Although precise figures on the extent of agency work in Poland are not available, the number of workers involved is estimated at approximately 100,000. According to data voluntarily submitted by a number of temporary agencies to a survey conducted by Personel magazine (12/153, 2003), 86,000 workers were hired by those agencies in 2002. The market is expected to grow rapidly in the coming years.

As noted above (under 'Legislative developments') , a number of labour law amendments in 2003 related to part-time and fixed-term work - eg banning discrimination against the workers involved, in line with EU Directives. According to Eurostat figures for 2002, some 10.7% of employment was part time and 15.5% of employees were on fixed-term contracts (both figures were considerably above the average for acceding countries).

Outlook

EU accession on 1 May 2004 is expected to have serious social consequences in Poland. These new challenges may result in an 'integrating effect' within society and will in particular affect trade unions. The Spanish post-accession scenario may be repeated in Poland, with the major trade unions - NSZZ Solidarność and the All-Poland Alliance of Trade Unions (Ogólnopolskie Porozumienie Związków Zawodowych, OPZZ) - rising above ideological divisions and conceiving a new joint worker representation strategy. Closer cooperation between employee representatives and employers’ associations may also be expected. The EWCs law passed in 2002 will come into force on the date of EU accession, strengthening the trade unions’ position. Social dialogue should improve and engage NGOs to a greater extent. (Julisz Gardawski, Jan Czarzasty and Rafał Towalski, Warsaw School of Economics and Institute of Public Affairs [Instytut Spraw Publicznych, ISP])

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