Collective agreements in focus

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At the end of 2001, some 9,000 collective agreements were in force in Poland - in almost all cases single-establishment agreements. Multi-establishment agreements are rare and the conclusion of agreements is much more common in the public sector than in the private sector. This feature examines the development of collective agreements and their legal regulation since the 1970s, and outlines current bargaining practice.

This feature examines the development of collective agreements in Poland, their legal regulation, and the current situation in this area.

History and position in labour law

Collective agreements have existed in Polish law since 1974. The Labour Code passed at that time introduced the collective agreement as an institution determining the mutual relationships between employers and employees within a branch of the economy or an occupation. In particular, collective agreements were supposed to establish, in specific branches of the economy, the conditions of remuneration and the granting of other benefits, as well as the working conditions - including employee privileges, workplace safety and hygiene, and the satisfaction of employees’ social and cultural needs. The parties had a margin of freedom to establish rights and obligations other than those mentioned above. The important feature was the possibility of introducing more favourable conditions for employees through collective agreements than those specified in the national regulations. Additionally, the institution of a 'single-establishment collective contract' was created, which was to function at the level of establishments possessing the right to use an internal remuneration system.

In the period of socialism and the centrally controlled economy, in which the trade unions were part of the state apparatus, a collective agreement was just a facade and its role was limited to legitimising the remuneration conditions in a given branch of the economy.

The political and economic transformation in 1989 initiated changes in industrial relations in Poland, forcing the social partners to redefine their roles. As a result of this process, acts modelled on European standards regarding trade unions, employers’ organisations and the settlement of collective disputes were passed.

The 1994 amendments to the Labour Code focused almost entirely on collective agreements, making them the basic instrument of labour law. The institutions of a multi-establishment collective agreement and a multi-establishment trade union organisation, which was authorised to negotiate and conclude this kind of agreement on behalf of the employees across the entire sector, were defined at this time. The 'single-establishment collective contract' became a 'single-establishment collective agreement'. The transformations were fundamental, and the regulations regarding the agreements became much more detailed. The specification of the employment relationship became the object of collective agreements, and issues which could not be covered by agreements were enumerated - these included: special protection for employees against termination of the employment relationship; employees’ rights in cases of unjustified or illegal termination of the employment relationship; responsibility with respect to order and discipline; maternity and childcare leave; and the protection of remuneration for work. An obligation was introduced to register collective agreements.

The legal framework for collective agreements was revised again two years later. Among other changes: conciliation commissions appointed by the parties were introduced in order to settle disputes concerning the interpretation of collective agreements; the jurisdiction of labour courts with regard to the provisions of agreements concluded was unequivocally established; and the list of potential violations of employees’ rights was extended - adding the conclusion of civil law contracts instead of contracts of employment (PL0209107F), delays in concluding contracts of employment in writing and failure to maintain documents concerning employment relationships. The list of work safety and hygiene regulations, the violation of which was subject to penal sanctions, was also extended, and the powers of the State Labour Inspection (Państwowa Inspekcja Pracy, PIP) with regard to supervising and ensuring the observance of employees’ rights, including those granted by collective agreements, were more precisely formulated.

The most recent amendments to the Labour Code, made in 2002 (PL0209107F) have introduced a very important change with regard to collective agreements, making it possible to suspend (for up to three years) a collective agreement in force, through a joint declaration of the parties, when this is justified by an employer’s financial difficulties.

Collective agreements may be concluded for a definite or an indefinite period, and may be amended by additional protocols.

Collective agreements in practice

As mentioned above, 1994 was an important watershed in the functioning of collective agreements in Poland. The newly introduced obligation to register such agreements - single-establishment agreements with provincial labour inspectorates, multi-establishment agreements with the Ministry of Labour (Ministerstwo Pracy i Polityki Społecznej, MPiPS) - required the registration of all agreements, including those reached earlier. Since 1995, concluded agreements have been recorded, although the current methodology does not count the number of employees covered by the agreements. Data from the State Labour Inspection show that by the first half of 2001, a total of over 11,000 collective agreements had been concluded (over 9,000 of which were still in force at the end of the year) and over 30,000 additional protocols had been registered. Table 1 below indicates the number of collective agreements and additional protocols for which applications to register were made over 1995-2001, along with the number of successful registrations and refusals.

Table 1. No. of collective agreements and additional protocols (applications to register, registrations and refusals), 1995-2001
. Total 2001 2000 1999 1998 1997 1996 1995
Applications to register: 46,980 3,617 4,420 6,806 5,535 6,708 7,441 12,453
- collective agreements 13,017 431 549 689 678 978 1,389 8,303
- additional protocols 33,963 3,186 3,871 6,117 4,857 5,730 6,052 4,150
Registered: 43,452 3,157 4,144 6,286 5,265 6,462 7,181 10,975
- collective agreements 11,784 361 498 622 614 882 1,464 7,343
- additional protocols 31,668 2,796 3,646 5,646 4,651 5,580 5,717 3,632
Registration refused: 497 101 77 47 68 64 97 43
- collective agreements 155 23 16 10 11 25 43 27
- additional protocols 342 78 61 37 57 39 54 16

Source: State Labour Inspection, 2001.

Table 2 indicates the total number of collective agreements registered from 26 November 1994 to 31 December 2001, and the number of agreements in force at the end of 2001.

Table 2. Total no. of collective agreements registered, 1994-2001, and in force at end of 2001
Amended agreements registered New agreements registered Total agreements registered Agreements currently in force Remarks
6,287 5,497 11,784 9,134 Some agreements terminated for reasons specified in section XI of the Labour Code

Source: State Labour Inspection, 2001

The reasons for the termination of some agreements, as specified in section XI of the Labour Code (article 241 paragraph 1), include a joint declaration by the parties, the expiry of the period for which the agreement has been concluded and the expiry of the period of notice to terminate the agreement by one of the parties.

Immediately after the law was amended, the majority of registered agreements were those concluded earlier, which explains the high level of registrations in 1995. In the subsequent years, the influx of registrations slowed down (1999, when the number slightly grew, was an exception). The explanations for the decreasing number of concluded collective agreements include the reluctance of employers to conclude them but also the saturation of the labour market with such agreements: most of the enterprises for which collective agreements are suitable already have them.

As regards multi-establishment agreements, around 140 of them and over 100 additional protocols have been registered (up to the first half of 2001). The overwhelming majority of these agreements have been concluded in the public sector and, in particular, the 'budgetary agencies' (agencies falling within the scope of the state budget). Eleven multi-establishment collective agreements have been concluded outside the domain of budgetary agencies. Multi-establishment collective agreements do not introduce anything new with regard to their content, essentially duplicating the provisions utilised in single-establishment agreements.

The reluctance to conclude collective agreements exhibited by private sector employers is often explained by their unwillingness to accept additional formal restraints (the newly introduced possibility of suspending the agreement is a concession towards them). Moreover, the law gives employers a simpler tool: they may introduce 'rules of remuneration', which may serve to implement an agreement concerning remuneration. There are now relaxed criteria of national representativeness for the purposes of concluding multi-establishment collective agreements. These apply to both trade unions (a trade union organisation eligible to conclude a multi-establishment agreement must organise at least 10% or 500,000 of the employees covered by the statute of the particular union, but when many trade unions are active in a given sector, the largest trade union organisation becomes representative) and employers’ organisations (any registered organisation is considered to be representative), and are meant to encourage the social partners to utilise multi-establishment agreements on a wider scale.

The effectiveness of collective agreements as an institution regulating labour relations is called into question when we take into account the fact that employers often breach the provisions of these agreements. The picture which emerges from the State Labour Inspection data is rather gloomy – in 2001, irregularities with regard to agreed employee benefits were found in as many as 50% of the establishments inspected (193 were inspected) (PL0210105N). At the same time, a certain improvement was observed with regard to the implementation of the provisions concerning working conditions.

Certain occupational groups are excluded by the law from concluding collective agreements. Such exclusions pertain to persons employed on a basis different from a contract of employment – ie elected, appointed or nominated employees. This means that state administration officials (those belonging to the civil service as well as elected and nominated officials), local administration officials, and judges and prosecutors may not enter into collective agreements.

Commentary

Since 1994, the institution of collective agreements in Poland has been similar to European models. The problem to be solved in the coming years is the small number of multi-establishment collective agreements, whose influence on labour relations is currently limited, especially in the private sector, which employs the majority of the workforce. The legal changes introduced recently are aimed at reducing the reluctance of employers to enter into collective agreements, which tend to be associated with excessive financial burdens in times of recession. (Jan Czarzasty, Warsaw School of Economics (Szkoła Główna Handlowa, SGH) and Institute of Public Affairs (Instytut Spraw Publicznych, ISP))

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