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Labour market reforms in Poland - background summary

The labour market policy in Poland under the second coalition government of the Civic Platform (Platforma Obywatelska, PO) and the Polish Peasants’ Party (Polskie Stronnictwo Ludowe, PSL), from 2011 until 2015, was marked by growing unilateralism, which ultimately resulted in trade unions abandoning the tripartite social dialogue in 2013. Nevertheless, the coalition cabinet introduced a number of significant modifications to the labour law. The major reforms effectuated during the four year term were as follows:

The Act on employment promotion and labour market institutions

  • In the spring of 2014 the Act on employment promotion and labour market institutions was amended by implementing certain provisions of the EU Youth Guarantee into Polish law.
  • In particular, a separate category of unemployed people below 30 years of age was recognised by virtue of the amended law.
  • The amendment introduced certain measures of the Active Labour Market Policy (ALMP), including a training voucher (bon szkoleniowy) which guarantees that the holder will be able to participate in the training programme of his/her choice and that any incurred costs will be reimbursed. The voucher may have a face value of up to 100% of the average salary.
  • The traineeship voucher (bon stażowy) guarantees that the holder will be able to work as a trainee at the establishment he chooses for a period of six months, as long as the employer undertakes to employ the unemployed person for a period of six months on completion of the traineeship. Employers who employ an unemployed person for the declared period of six months are entitled to a PLN 1,500 (about 360 EUR) bonus. The traineeship voucher is used to pay for travel to and from the traineeship location and the necessary medical or psychological examinations.
  • The employment voucher (bon zatrudnieniowy) is issued to the employer as a guarantee of partial reimbursement of the costs incurred in the hiring of the unemployed person to whom the traineeship voucher was issued; namely wages and social insurance contributions. An employer who receives reimbursement on the basis of the employment voucher is required to employ the unemployed person for 18 months. The amount of the reimbursement, equal to the amount of unemployment benefit, is paid for a period of one year, following which the employer is required to continue the person’s employment for another six months.
  • The settlement voucher (bon na zasiedlenie) is granted to unemployed persons who take up employment, another form of paid work, or start a business outside of their previous place of residence; provided that their income is at least equal to the minimum wage and that they are covered by the social insurance scheme. The voucher is equal to two months' average wages and must be used to cover the cost of accommodation.

New regulations of fixed-term employment contracts

  • Following the complaint filed in 2012 by “Solidarność”, which cited improper application of Council Directive 99/70/EC in Poland, the European Commission launched an investigation, and in December 2013 it declared some of the union’s claims to be valid.
  • Solidarność” specifically pointed to the following shortcomings of the Labour Code, with regard to the fixed-term employment contract regulations: 1) no existing framework preventing abuse arising from successive fixed-term employment contracts; 2) exclusion of fixed-term contracts for specific work and trial period contracts; 3) too short a gap permitted between contracts to prevent them being deemed successive (only one month); 4) exclusion of periodically performed tasks which paved the way for concluding multiple successive fixed-term contracts.
  • The Commission concluded that: 1) the differences between the notice period for fixed-term and permanent contracts meant that fixed-term employees were discriminated against without any objective justification; 2) the one-month gap between two fixed-term contracts to prevent them being deemed successive was too short; 3) the notion of ‘periodically performed tasks’, allowing for an indefinite number of subsequent fixed-term contracts, would not prevent the use of an excessive number of such contracts; 4) Polish law wrongly excluded apprenticeships, public/ publicly-financed training, and integration or re-skilling programmes from the Labour Code’s protective measures against an excessive number of successive fixed-term contracts.
  • Trade unions addressed the government with a joint position, calling in particular for: 1) the introduction of a maximum period (18 months) during which fixed-term contracts can be concluded between a company and a particular worker; 2) the possibility of modifying the maximum duration of a series of fixed-term contracts in collective employment agreements (up to 30 months); 3) making the notice period dependent on the length of the contract.
  • In June the parliament finally amended the Labour Code (signed into law in August) with regard to fixed-term employment contracts. The amendment limits the number of consecutive to fixed-term contracts to three, the total duration of which cannot exceed 33 months. Trial-period employment contracts concluded for three months can precede the first fixed-term contract; so after 36 months at most, each employee gains a right to a permanent employment contract (even if the parties agree otherwise, a fixed-term contract legally transforms into a permanent one). The amendment also equalizes the length of notice for both fixed-term and permanent contracts, erases an ‘employment contract concluded for the time of completion of a specific task’, and lifts the obligation from employees to perform work whilst in the notice period. The new regulations came into force on 22 February 2016.

New tripartite legislation and new social dialogue bodies

  • Following the exit of trade unions from the Tripartite Commission in the summer of 2013 and a subsequent ‘tripartite stalemate’, trade unions and employers engaged in bipartite talks on new legislation for tripartite social dialogue that would replace the Tripartite Commission with a new central level social dialogue body.
  • In March 2015, the bipartite talks produced draft legislation on a new tripartite body, which was endorsed by the government and passed into legislation in June 2015.
  • The new law established the Social Dialogue Council (Rada Dialogu Społecznego, RDS) to replace the former Tripartite Commission as the national tripartite council, and established regional social dialogue councils (wojewódzkie rady dialogu społecznego, WRDS) to act as tripartite (de facto quadripartite) councils at the provincial level (województwo).
  • The main prerogatives of RDS are as follows: 1) RDS is responsible for conducting dialogue ‘aimed at facilitating conditions for socio-economic development, as well as increasing competitiveness and social cohesion’; 2) RDS is to fulfil the principles of ‘participation and social solidarity in the field of employment relations’. This is significant, considering that the Tripartite Commission’s powers were limited to the ‘maintenance of social peace’; 3) RDS enjoys the right to a legislative initiative on all the issues for which it has responsibility, including ‘socio-economic development, the enhancement of national economic competiveness, and social cohesion’; 4) all members of RDS are nominated by the President of Poland, after being proposed by the government and each social partner (trade unions and employers); 5) the chair of RDS will rotate each year between the three parties; 6) RDS has a separate budget and a regular administrative unit serving its needs.
  • The Social Dialogue Council (and the regional social dialogue councils) launched their operations in October 2015, shortly before the parliamentary elections that brought the main opposition party, Law and Justice (Prawo i Sprawiedliwość, PiS), to power.