2004 Annual Review for Poland
This record reviews the main industrial relations developments in Poland during 2004.
The most important political event of 2004 in Poland was the country’s accession to the European Union on 1 May.
The social democratic coalition government of the Democratic Left Alliance (Sojusz Lewicy Demokratycznej, SLD) and the Labour Union (Unia Pracy, UP), headed by Prime Minister Leszek Miller, was dismissed in 2004 over a corruption scandal and in June, the lower house of parliament (Sejm) gave a vote of confidence to a new government headed by Marek Belka, made up of the same parties. This government has set itself the objective of accelerating privatisation, improving the performance of civil servants and signing the EU Constitutional treaty. In the opinion of many observers, The Belka government has devised the best state budget in recent years.
Collective bargaining - which occurs primarily at single-employer level - has relatively little overall impact on industrial relations, with many issues regulated either by legislation or by tripartite bodies at national and regional levels. However, 2004 saw an increase in the number of collective agreements and amending protocols signed, which covered more than 1 million workers. By contrast, agreements registered before the end of 2003 covered only 200,000 workers. However, agreements rarely contain more favourable regulations than general labour law provisions.
No figures are available for average collectively agreed pay increase. According to the Central Statistical Office of Poland (Główny Urząd Statystyczny, GUS), average earnings increased by 5.1% in the year to the third quarter of 2004, having risen by 2.6% in 2003.
Pay issues are in some cases regulated by company-level collective agreements. However, employers prefer to sign 'pay regulations', which are much more flexible regulations than collective agreemenst. The statistics indicate that in 2004 an increased percentage of employers (61%) violated the provisions of agreements in the area of the payment of wages. During the previous two previous years the figure was 50%. The most anomalies were observed in the area of employers reducing remuneration for overtime work and non-payment or reduction of the bonuses provided by agreements (such as bonuses for dangerous work or linked to seniority) or failing to pay the amount fixed by the agreement (eg for night work). Almost 18% of agreements provided more advantageous payment terms than the Labour Code for overtime work, 14% for working on Sundays and holidays, and 26% for working at night.
Collectively agreed working time regulations usually copy the provisions of the Labour Code - including a 40-hour week - or specific regulations in this area that cover certain professions such as drivers or teachers and are usually contained in sectoral agreements. Research has found that over 60% of trade unionists believe that working time is regulated well. There has been a decrease in the number of breaches of regulations governing the length of working time (from 18% to 13% of employers examined).
The restructuring of the Polish economy continued during 2004, with trade unions concentrating on ensuring that privatisations (PL0406105F) do not result in job losses. For example, in July, trade unions representing employees at the Polfa Warszawa pharmaceuticals producer called on the government to scrap plans to merge the various state-owned entities in the sector into a new organisation, Polish Pharmaceuticals Holding (Polskiego Holdingu Farmaceutycznego, PHF). Polfa Warszawa is the industry's most successful firm and its employees are concerned about the effects of its incorporation into a new holding structure (PL0408102N).
The sale of Polish Steelworks (Polskie Huty Stali, PHS), Poland's largest steel producer, to the Indian-based LNM Group was completed in March 2004, after the new owners reached agreement with trade unions over a 'social package' to protect the interests of the company's 16,000 staff. No such provisions had been included in the original privatisation agreement between LNM and the government. The deal includes employment guarantees and a privatisation bonus for all employees (PL0401106F).
The country’s petroleum industry in general, and the major enterprise PKN Orlen in particular, is undergoing restructuring and privatisation. April and May 2004 saw disputes and protests over planned job losses and management attempts to impose wage restraint (PL0405104F).
Equal opportunities and diversity issues
In 2004, equal opportunities and diversity became a main point of focus for the social partners. However, there is no hard data on this subject. The implementation of anti-discrimination regulations in the workplace has brought the issue to the attention of the social partners.
Training and skills development
Training and skills development are both traditionally regulated by collective agreement, usually at company level.
There were significant changes to labour law during 2004 owing to Poland’s accession to the European Union. The most important reforms were made in the following areas:
- fixed-term contracts. New legislation stipulates that if a fixed-term contract is renewed for the second time, it must be for an indefinite period;
- posted workers. If an employer located in another EU Member State is posting workers to work in Poland, these workers are entitled to terms and conditions of employment that are at least in line with the provisions of the Polish Labour Code, as well as other provisions regulating employees rights and obligations; and
- employment of young people. The employment of minors aged under 16 is allowed only by government authorisation, with the written agreement of the parents, with a permit issued by labour inspector, and only if the minor is engaged in work activities of a cultural, artistic, sporting or publicity nature or in show business.
Changes were also made to the length of paid annual leave - employees who have worked one year or more are entitled to at least 20 days of paid annual leave.
Further changes were introduced to collective labour law. Since the beginning of 2004, specific rules for terminating the employment relationship for reasons unconnected to the employee have been in force (the relevant legal act was passed on 13 March 2003), implementing EU legislation governing collective redundancies. The new regulations entail a reduction in the period during which redundancies are deemed to be collective from three months to 30 days, the introduction of an obligation to inform and consult employee representations (where there are no trade unions) on the intention to make collective redundancies and the introduction of an entitlement for all redundant employees to receive severance payments.
Legislation governing temporary agency work has been in force since the beginning of 2004 (passed on 9 July 2003).
The organisation and role of the social partners
During 2004, some 17% of the total workforce were members of trade unions. A slight increase in the number of union members (in comparison with previous years) did not change an apparent general perception among activists of a crisis of union representation. In a survey, three-quarters of respondent members of the Independent and Self-Governing Trade Union Solidarność (Niezależny Samorządny Związek Zawodowy Solidarność, NSZZ Solidarność) said that the trade union had too little impact on the shaping of labour law. A feeling of powerlessness was observed in other areas as well, with more than half of respondents saying they would like to have more impact on the education of young people. The feeling of impotence was especially strong when, after unions had collected nearly 680,000 signatures in support of a draft Act that restored pre-pension benefits, the Sejm totally neglected this initiative. At this point, NSZZ Solidarność started to consider a return to active involvement in politics. However, opinions on this differed considerably. Some activists pointed out that after the experience of Solidarity Election Action (Akcja Wyborcza solidarność, AWS), the union's focus has been on street protests, which seem to have gained little. They thus believe that only by being present in parliament can NSZZ Solidarność achieve results. However, others oppose a return to politics, preferring to take better care of union members.
In an opinion poll, union members were asked how NSZZ Solidarność could regain an impact on politics. Half of the respondents said they would support the NSZZ Solidarność leader in general elections. Nearly 20% were willing to grant the support of the entire trade union to a specific political party - 61% would vote for the Law and Justice Party (Prawo i Sprawiedliwość, PiS), 16% for the Polish Families League (Liga Polskich Rodzin, LPR) and 8% for the Civic Platform (Platforma Obywatelska, PO.
The NSZZ Solidarność leadership declared that it would first talk to the PiS, and later with the LPR and PO. For the time being the national commission of the NSZZ Solidarność has not taken any position on a return to politics. The debate should re-emerge when the president of NSZZ Solidarność presents the outcome of talks with the PiS in January 2005.
It has been rumoured that the other main national trade union centre, the All-Poland Alliance of Trade Unions (Ogólnopolskie Porozumienie Związków Zawodowych, OPZZ), is in difficulties. OPZZ derives its income from contributions paid by affiliated industry unions and federations. However, the funds transferred to the headquarters are insufficient and do not cover current operations, and the industry organisations are unwilling to share their money. A then senior official of the OPZZ has already tried to cope with the problem by suggesting transforming the alliance of sovereign organisations into a single union like NSZZ Solidarność. The leadership of such a union would have real power over the industry structures and could compel them to contribute more funds. However, this plan did not work out, mostly because the official concerned resigned. OPZZ is rumoured to be talking about merger with the Trade Unions Forum (Forum Związków Zawodowych, FZZ), but so far the bone of contention has been politics. OPZZ want to engage in politics, while FZZ is not interested.
There was less public debate about employers’ organisations in 2004, but changes in labour law and the outcomes of the work of the the Tripartite Commission for Social and Economic Affairs (Komisja Trójstronna do Spraw Społeczno-Gospodarczych) (PL0210106F) seem to be making them more high profile and effective.
The number of collective labour disputes in 2004 was lower than in 2003. However, although official data are not yet available, the number of strikes is expected to be below 10, fewer than in 2003. The most notable disputes of 2004 were:
- a strike by workers at the public transport company PKS Kozienice Sp zoo, as a protest against planned job losses;
- a protest action by the staff of Jedynka Wrocław SA against planned lay-offs (in this case the management hired security staff who reportedly used force to pacify the protest) (PL0405106F and PL0406101N);
- a protest action by the regional NSZZ Solidarność section in Pomorze Zachodnie in defence of jobs and in support of the restoration of pre-pension allocations and benefits;
- a strike at the Eastwood company, demanding the payment of overdue wages;
- a protest at the UPC-Telewizja Kablowa cable television company. The management allegedly breached the law by sacking the president of the local trade union organisation;
- a strike by railway workers in December, in protest against the reduction of regional services as part of a restructuring agenda (PL0501101N);
- a protest by the staff at the PLL LOT SA (Polish Airlines) against restructuring plans prepared by the management board; and
- a solidarity strike with their German colleagues organised on 19 October by workers at the Gliwice Opel car factory.
As a new EU Member State, Poland must adopt EU standards with respect to workers’ rights to information and consultation. In 2004 the government thus consulted with social partners on a draft Act under which each company employing more than 20 persons should have an employee council (PL0409102F). During the debates of the Tripartite Commission for Social and Economic Affairs on the implementation of the information and consultation Directive, the social partners were unwilling to accept the governmental draft. It was decided that an autonomous dialogue, without the government’s participation, would commence on the issue (PL0411102N). If the parties find a compromise, their common draft Act will be presented to the government and hopefully endorsed. In the opinion of the experts, the 'Czech concept' will prevail (this provides for the establishment of either a works council or another form of representation), which will conserve the plurality of trade unions in an establishment.
The Polish European Works Councils Act was passed in 2002. According to research conducted by trade unions, there are both positive and negative aspects of this institution for workers' representatives (PL0409102F). One of the negative aspects is a view that the breaks between the EWC meetings are too long. Another is a perceived lack of effectiveness of the EWCs’ actions, which, some commentators argue, results from the indistinct provisions of the EWCs Directive and consequently of the regulations enforced in the individual Member States. On the other hand, the positive aspects include wider access to information about companies, contact with workers’ representatives from other countries and better opportunities to conduct information campaigns among workers.
The social partners have also been presented with draft legislation implementing the EU’s European Company Statute, prepared by the Ministry of Justice (Ministerstwo Sprawiedliwości, MS). With few exceptions, the draft was received positively by the trade unions.
New regulations came into force in 2004 obliging employers to consult with employees or their representatives on all action relating to health and safety at work (PL0502101N).
Absence from work
The statutory working week is 40 hours and the statutory working day is eight hours. However, the average working week in 2004 was nearly 43 hours (additional hours included). In a country where the unemployment rate amounts to around 20%, absence from work is not a common problem for employers - staff avoid taking sick leave and parents restrict their maternity leave to the necessary minimum.
Further, legislation states that a prolonged absence of an employee from work is always a serious inconvenience to the employer. For this reason an employee’s unpredicted, prolonged and repeated absence from work, which forces the employer to take actions such as arranging replacements, is a justified cause for terminating the employment contract, even if the absence is not the employee’s fault and is formally justified. However, the termination of the contract would not be defensible in the following cases:
- if the employee’s absence from work did not interfere with the company’s production plan;
- if the employee’s illness was temporary and definitively cured before the termination of the contract; or
- if the employee’s absence from work did not result in the employer incurring extra costs relating to overtime for other staff members or the employment of a substitute.
The amended Labour Code requires equal treatment of employees with respect to commencing and terminating an employment relationship, the conditions of employment, and promotion and access to training in order to increase professional skills. Moreover, the Labour Code makes a distinction between direct and indirect discrimination. It also extends the notion of discrimination and extends and tightens up definition of discrimination based on sex. Discrimination based on sex also includes sexual harassment.
Research conducted by the OPZZ shows that almost 60% of employees have been affected by discrimination or sexual harassment, but only a small percentage decided to seek their rights. In spite of this, in 2004 the National Labour Inspectorate (Państwowa Inspekcja Pracy, PIP) received 101 formal complaints about discrimination, including three sexual harassment complaints (which were not confirmed by PIP inspectors). It is important to note, however, that these cases are very complicated as far as evidence is concerned. Courts face the same difficulties as the PIP. Almost 50% of discrimination cases are dismissed and 15% are referred.
Research finds that the most widespread forms of harassment of employees by their superiors are: forcing employees to stay after hours; refusing to grant leave and holidays; and threatening dismissal. Sexual harassment is also mentioned, but is last on the list.
New forms of work
In January 2004, the Interim Work Act entered into force (PL0308103N). It introduced the notion of work through temporary agencies and of temporary agency workers, who are employed exclusively to perform project work for entities other than the temporary employment agency that employs them. It has been observed that employers tend to use the services of temporary employment agencies to an increasing extent. The scope of tasks given to temporary workers is also constantly growing. This way of organising work is profitable to user company management as temporary workers are usually young and relatively low-paid. However, the widespread practice of replacing employees with standard employment contracts with temporary workers who work for lower wages is regarded as incompatible with the law inasmuch as it infringes on the rule of equal treatment in employment. Commentators note that this is an increasingly frequent occurrence - there are many cases in which the difference in pay for the same job is considerable.
A tiny percentage of the population are employed in telework. In 2004, negotiations were undertaken to implement the 2002 European agreement on telework.
Self-employment is becoming increasingly popular - the number of self-employed people increased by 28,000 (0.9%) in 2004.
Other relevant developments
In 2004, much attention was devoted to events taking place at the Biedronka retail chain. Highly unusually, an employee won an employment law case against a large employer. The court verdict triggered an unprecedented wave of legal cases against Biedronka and, soon after the media alleged instances of labour law violations, its stores were inspected by the PIP. The inspections found that the chain’s staff worked over 11 hours a day without overtime pay, their wages were below the norm, and women were required to lift weights that greatly surpassed the norm. Seven cases were submitted to the prosecutor’s office (these related to the forgery of employees’ signatures).
In May 2004, a NSZZ Solidarność trade union section was established at Biedronka (PL0410104N). Trade unions have also started to appear in private security services, a sector that employs more than 200,000 people. This indicates that unions are attaching more and more attention to the sectors that have been so far deprived of trade union representation.
Cooperation between the state institutions defending workers' rights was tightened in 2004. An agreement was concluded between the General Labour Inspectorate and the National Prosecutor on counteracting and preventing offences against the rights of employees.
2005 is likely to be dominated by the parliamentary and presidential elections. The political groupings apparently heading for power and already clearly perceived as the alternative to the ruling social democrats are led by the Civic Platform, which in 2004 underwent a significant evolution from a liberal to a conservative party, and its conservatism includes radical elements. On the other side of the fence, there is no left-wing counterbalance. Therefore, in 2005 Poland is likely to move to the right in political terms, although the precise details of this are still hard to define because the political parties that claim to be conservative, Christian democratic and national Catholic mostly present election manifestos on the need for radical state reform. There are grounds to suspect that as far as politics are concerned, 2005 will be characterised by conflict, while the outcome of the election (voter turn-out is expected to be poor) is not expected to result in a mandate strong enough to govern for any party. It is therefore expected that the establishment of possibly unstable, or even unusual, coalitions will be necessary. (Rafał Towalski, Institute of Public Affairs [Instytut Spraw Publicznych, ISP] and Warsaw School of Economics [Szkoła Główna Handlowa])