Government accepts anti-crisis package submitted by social partners

In early June 2009, the government approved two draft laws comprising the vast majority of the ‘Anti-crisis package’ drafted by the Tripartite Commission for Social and Economic Affairs in March. The package of measures consists of 13 initiatives with the aim of combating and preventing the negative social and economic effects of the current economic crisis. The autonomous agreement is widely seen as a revival of social dialogue.

Background

The need for the conclusion of a social pact in Poland has been emphasised since the turn of the century. Two major attempts to conclude such a pact were made in 2003 and 2006, but without much success. Talks have not advanced beyond the stage of negotiations in the tripartite social dialogue bodies. The only case of a national-level social pact adopted after 1989 was the ‘Pact on state-owned enterprises undergoing transformation’ signed in 1993, which paved the way for the establishment of the Tripartite Commission for Social and Economic Affairs (Trójstronna Komisja ds. Społeczno Gospodarczych, TK).

Economic crisis stimulates talks on social pact

As the economic slowdown continued in late 2008 and early 2009, the collective actors of labour relations were becoming increasingly aware of the urgent need for adjustments in public policy to alleviate the negative effects of the global economic recession at the domestic level. Subsequently, trade unions and employers launched autonomous talks with a view to reaching a consensus over fundamental socioeconomic issues.

Social partners propose anti-crisis package

In March, the social partners announced that they had reached an agreement on a package of anti-crisis measures, which comprised the following 13 proposals:

  • offering social support for less affluent families and increasing welfare benefits for redundant employees;
  • introducing a tax exemption on allowances paid by trade unions and on benefits from company social funds;
  • making vouchers convertible to goods or services exempt from personal income tax;
  • repealing the Act on the negotiation system of fixing the average pay growth in corporations and revoking the Act on remuneration of management executives in state-owned companies (stipulating a ‘salary cap’);
  • gradually increasing the national minimum wage to 50% of the national average wage;
  • introducing a 12-month working hour settlement period;
  • establishing enterprise training funds;
  • rationalising a 24-hour work cycle in the context of the working hour settlement period;
  • recognising social benefit packages as a source of labour law;
  • introducing flexible working hours as a way of reconciling family and work responsibilities;
  • stabilising employment with constraints on fixed-term employment contracts;
  • introducing accelerated amortisation;
  • subsidising employment as an alternative to group dismissals.

Government approves draft legislation

The government decided to transform these concepts into legislation. In early June, it approved two draft laws proposed by the Ministry of Labour and Social Policy (Ministerstwo Pracy i Polityki Społecznej, MPiPS) and the Ministry of Finance (Ministerstwo Finansów, MF). The draft law prepared by MF relates to personal income tax exemptions of allowances paid by trade unions and of vouchers convertible to goods or services. The draft law concluded by MPiPS deals with the negative effects of the economic crisis on employers. The latter law covers such issues as: a 12-month working hours’ settlement period, enterprise training funds, a 24-hour work cycle of flexible working hours, constraints on fixed-term employment contracts, as well as subsidised employment.

Uncertainty regarding implementation and impact of package

Despite the abovementioned developments, the process of implementing the package of measures remains unclear. First, it is difficult to predict when the legislative process will be concluded. Furthermore, even if the legislative process is concluded, secondary legislation will also be required to make its execution feasible. In addition, some specific solutions proposed by the government do not entirely reflect the intentions of the social partners and hence may become a source of tension. Moreover, a number of social partners’ proposals have been omitted by the government, raising the question of whether those claims have been rejected or are simply pending. Lastly, the package has caused an outburst of high hopes, which could shortly turn into disappointment, as the circle of beneficiaries may prove more narrow than expected – for example, only enterprises that have been duly delivering social security contributions for their staff are eligible for the ‘subsidised employment’ provision.

Commentary

Regardless of the final result of the legislative process and government actions, the autonomous agreement reached by the social partners is a vivid sign of social dialogue gaining a new momentum. Should the government be able to secure implementation of the legislation and ultimately to treat it as a positive step towards an efficient anti-crisis socioeconomic policy, then social dialogue will clearly prove its vital role in the public sphere.

Jan Czarzasty, Institute of Public Affairs

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