Hypermarkets in the spotlight again

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The operations of large supermarket chains in Poland were in the headlines in November 2005. Trade unions demanded that Independence Day, the Polish national holiday on 11 November, should be a day off for hypermarket employees, as it is for most workers. Furthermore, Teresa Lubińska, the newly installed Minister of Finance, reportedly made comments to the effect that large supermarket chains are not welcome in the country. Finally, the leading party in the new government, Law and Justice (PiS), proposed legislation placing limits on the opening of large stores.

Industrial relations in large supermarket/hypermarket chains have been a high-profile issue in Poland of late (PL0211104F). In some instances, this has been due to violations of employee rights identified by the State Labour Inspection (Państwowa Inspekcja Pracy, PIP). On the other hand, the huge retail facilities springing up around Poland in recent years have become a major growth field for trade unions, which have made considerable inroads among supermarket and hypermarket employees. Finally, in a phenomenon observed in many other countries, the hypermarkets have become the target of regular attacks by small store-owners and merchants who view the bourgeoning operations of the large retail chains and the terms of competition imposed by them as a danger to their own livelihoods.

Working conditions at large supermarkets may be problematic due to factors such as long opening hours and the fact that the stores remain open on Sundays and on some public holidays. All the supermarket chains operating in Poland open at weekends, and the outlets of Tesco operate 24 hours a day. Such working schedules may cause discontent among employees and generate tensions which, every now and again, flare up into open conflicts.

Union protests against work on public holiday

A conflict arose in 2005 in relation to work on Independence Day - a public holiday on 11 November marking Poland’s re-emergence as an independent state after World War I. Most employing establishments remain closed on this day. This year, Independence Day fell on a Friday, translating into an attractive three-day weekend for those workers who were not required to work. However, hypermarket employees were expected to work as if this were any other day. The trade unions active within the hypermarket chains appealed to the employers for a day off on the holiday. When their appeal was refused, they decided to mount a protest on 9 November, setting up picket lines outside Géant and Auchan outlets in the Warsaw area and handing out leaflets in the hope of generating public support for their cause. The Retail Employees National Section of the Independent and Self-Governing Trade Union Solidarność (Niezależny Samorządny Związek Zawodowy Solidarność, NSZZ Solidarność) also addressed an open letter to members of Polish parliament in which it called for the institution of a blanket ban on trading on Sundays and holidays. This, the trade union stated, is not the end of the matter.

Hypermarkets 'not welcome' in Poland?

Another recent development that has brought hypermarkets to the public’s attention was an interview given to the Financial Times by Teresa Lubińska, the new Minister of Finance. The Financial Times quoted Minister Lubińska as saying that activities of hypermarket chains such as Tesco constitute 'the kind of non-productive investment not needed in Poland'. These remarks have since been repeated by many news outlets in Poland as well as abroad. In substantiation of this view, Ms Lubińska explained that the jobs created by the supermarkets do not call for high skills. The fact that - to all appearances - Poland’s new Prime Minister, Kazimierz Marcinkiewicz, found nothing amiss in these remarks further contributed to their resonance. Even the European Commission took a stance on the matter, reminding those concerned that a Member State is bound by EU law to extend equal treatment to all business entities.

The Polish Organisation of Retail and Distribution (Polska Organizacja Handlu i Dystrybucji, POHiD), an umbrella group representing supermarket chains, expressed its surprise at what it regarded as the Minister of Finance’s dismissive comments about investments which - as it pointed out - have created 160,000 jobs in the Polish economy to date. Once it became aware of the negative reaction, the Prime Minister's office embarked on damage-control exercises, especially seeing as the entire affair took place before the new cabinet had received a vote of confidence in parliament.

Towards statutory regulation of large retail chains

Trade union efforts at imposing restrictions on hypermarkets may well prove successful; one of the first pieces of legislation to be presented to the new parliament deals with operation of large-area retail entities. This legislative initiative was brought by the Law and Justice (Prawo i Sprawiedliwość, PiS) party, the most successful party in the September 2005 parliamentary election and the new 'kingmaker' in Polish politics. Attempts at stricter regulation of hypermarket operations have already been made on several occasions over the past few years, and this new legislative project comes as no surprise. One draft statute was brought forward by a group of deputies in 1998, but it ultimately failed - only to be taken up again in 2004 at the behest of PiS, but again with no success. This time around, however, the newfound strength of PiS - bolstered by its allies, the populist Samoobrona of the Republic of Poland (Samoobrona Rzeczpospolitej Polskiej, Samoobrona RP) and the hard-right League of Polish Families (Liga Polskich Rodzin, LPR) (whose politicians take an equally critical view of hypermarkets) - may well result in passage of the bill. As it now stands, the legislative proposal would introduce a number of limitations on the opening of new retail outlets; in no event, however, will it mandate closure of stores which are already operating.

Commentary

The recent events demonstrate once again that, for some reason, large supermarkets occupy a very special place in the public discourse in Poland, and that they have avowed adversaries who dispose of considerable potential for mobilisation. While trade union drives for more advantageous working conditions or legislative initiatives geared at regulating a specific branch of the economy are understandable enough, condemnations of named foreign corporations uttered by prominent members of the cabinet cause justified disquiet among investors. Given the persistently poor situation in the Polish job market, members of the government might do well to refrain from actions which could impede the creation of new jobs - whatever their opinion of those jobs’ quality. (Jan Czarzasty, Institute of Public Affairs [Instytut Spraw Publicznych, ISP] and Warsaw School of Economics [Szkoła Główna Handlowa, SGH])

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