Single-establishment bargaining in 2003 examined

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According to figures published by the Polish State Labour Inspection (PLP) in 2004, the number of single-establishment collective agreements concluded rose in 2003, for the first time in some years. The individual establishment is the main bargaining level in Poland. The 441 agreements signed in 2003 dealt mainly with pay issues, with some containing provisions on matters such as work organisation. An increasing number of employers are suspending all or part of agreements in force, citing financial hardship.

Amendments made to the Labour Code in 1994 gave a central role to collective bargaining (PL0210108F). However, according to State Labour Inspection (Państwowa Inspekcja Pracy, PIP) data, the number of new single-establishment collective agreements concluded still stood at only 400 or so in 2003 - collective agreements covering a single employing entity ('single-establishment' agreements) are the predominant form of collective bargaining in Poland, with collective agreements covering more than one employing entity ('multi-establishment' agreements) rare - and even this marked an increase in comparison with previous periods. New flexibility introduced to the negotiating rules in 2001 gave rise to fears that the number of agreements would shrink further. However, the PLP data for 2003 - examined below - indicate that these fears, at least for the time being, are unfounded.

Number and scope

The data collected by PLP indicate that, in comparison with the preceding two years (PL0308104N), there was an increase in the number of registered collective agreements, as well as of additional protocols to such agreement. Of 441 single-establishment agreements concluded in 2003, 318 (ie more than 72%) were signed following the dissolution of a previous agreement, while 123 were the first collective agreements executed within the given employing entity. The scope of the agreements registered in 2003 extended to a total of 174,600 employees.

The general tendency was for the provisions of collective agreements to apply to all employees of the entity in question. Under the pertinent laws, collective agreements do not apply to the management staff administering the employing entity on behalf of its owners. With respect to their remuneration provisions, some 2003 collective agreements included clauses excluding young workers employed as trainees, marketing staff, consultants/advisors and agents. In some instances, exclusion clauses were applied to workers employed in public intervention works projects.

Contents

According to PLP, the single-establishment collective agreements signed in 2003 regulated first and foremost remuneration issues - remuneration systems, and the elements and value of the pay package - as well as other pay-related benefits accorded to employees - 'anniversary awards', severance benefits, annual bonuses etc. Work organisation issues - eg working time systems, settlement periods and definitions of night work - were a somewhat less popular theme. There is an increasing tendency for the parties to collective agreements not to include provisions concerning working conditions, leaving such issues to the in-house 'work rules'. A few collective agreements did deal with health and safety at work, covering topics such as the issue to employees of working clothes or of protective gear. Some agreements established rules governing relations between the employer and trade union organisations active within the establishment, for instance with respect to: providing unions with facilities and equipment needed for their work; terms of cooperation; procedures to be followed in the event of disputes; and assessing the practical effectiveness of the agreements. Some agreements dealt with further learning by, and training of, employees or with recruitment issues.

It was only rarely that the parties to collective agreements agreed terms which were more favourable to employees than the minimum stipulated by labour laws. Of all the single-establishment agreements registered during 2003, 18% included more favourable terms (as compared with the minimum set by the Labour Code) with regard to overtime, 14% with regard to work on Sundays and public holidays, and 26% with regard to night work.

The PLP data suggests that a tendency to limit the scope and value of benefits extended to employees is still strong. This trend is particularly manifest in the case of collective agreements concluded in the place of previous ones. While a majority of the registered agreements provide for anniversary awards or severance payments to departing employees higher than those required by law, entitlement to these benefits is generally tied to the duration of employment with the given employer rather than to the combined length of the employee’s working career. The length-of-service bonus has clearly become a less popular element of the remuneration package, and annual bonuses/awards often depend on whether or not the employing establishment has made a profit for the year in question.

Effectiveness of provisions

Many employers find it difficult to abide by all provisions of their collective agreement on account of financial hardships; accordingly, there have been many agreements suspending application of all or some provisions of previous collective agreements. At total of 75 such 'suspension agreements' were registered in 2000, 152 in 2001, 239 in 2002 and 303 in 2003. The elements of collective agreements most affected by such temporary suspension included those providing for anniversary awards, overtime rates higher than set in the Labour Code, seniority bonuses, and bonuses for work in difficult/dangerous conditions. In some cases, employing establishments that had run into financial difficulties did not suspend selected provisions but definitively rescinded the entire collective agreement.

Control proceedings conducted by PLP have brought to light some instances where the formal requirements concerning implementation of collective agreements have not been observed. These include: concluding agreements and additional protocols without registering them with the pertinent authorities; and failure to report the suspension of an agreement or its amendment. In some isolated cases, employers neglected to notify their employees that a collective agreement had come into force, that it had been amended, or that it has been dissolved.

There has been a decline in the number of collective agreements incorporating provisions contrary to pertinent laws (this problem applies manly to collective agreements incorporating earlier remuneration deals). In 2001, 65% of the collective agreements submitted for registration featured legal irregularities, but in 2003, only 23% required adjustment to bring them in compliance with labour law.

Another positive development is a reduced incidence of employer violations concerning working conditions, especially working times. Such violations decreased from 18% of cases examined by PLP in 2002 to 13% in 2003. On the other hand, there has been an increase, up to 61%, in the percentage of employers in breach of collectively agreed provisions governing disbursement of pay-related benefits. In the previous two years, the incidence of such violations had oscillated around 50%. The greatest number of irregularities was recorded with respect to overtime payments and bonuses due solely on the basis of a collective agreement rather than law (eg for work in dangerous conditions or length of service) or whose amount is set by such an agreement (eg for night work). Other employers paid out wages irregularly or in incomplete amounts, while some employers stopped remunerating their employees altogether (PL0307106F).

Commentary

According to the authors of a recent report entitled The social partners and work: the opportunities for social dialogue: 'Poland’s accession to the European Union gives rise to an obligation to ensure clear incorporation in the country’s collective labour law, but also in the customs shaping relations between employers and employees, of full possibility for executing the right to information and consultation... among other elements, the significance of agreements law will grow. The greater the modernisation of the Polish economy and the greater the need for labour relations to keep up with high technology, efficient work organisation, and individualisation of labour, the greater the significance of conditions conducive to social dialogue within the company and of various forms for its institutionalisation.' It could be that the increase in the number of collective agreements registered in 2003 testifies to an improvement of the condition of social dialogue at the level of individual employers. It is too early to predict whether this tendency will continue. Some disquiet arises with respect to the number of collective agreements that are being suspended; one can only hope that this practice will become less frequent as the overall economic situation in Poland improves. (Rafał Towalski, Institute of Public Affairs [Instytut Spraw Publicznych, ISP] and Warsaw School of Economics [Szkoła Główna Handlowa, SGH])

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