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Changes In Polish Employment Laws Bring New Costs:Benefits Equation

This Autumn brings quite a few changes for Polish employers. Not only do new pension plans called PPK (Pracownicze Plany Kapitałowe) became a reality for the biggest Polish employers in the fourth quarter of 2019, but the Labour Code and Code of Civil Procedure see changes too. Some of them result in a need to change workplace policies and procedures, while others increase operational costs.

Employee Capital Plans (PPK)

Employee Capital Plans were launched this year to “allow” (require, actually) employees to systematically contribute to a pensions savings scheme. PPK apply from July 1 to employers having at least 250 employees as at December 31, 2018. From January 1 next year they will also cover employers with at least 50 employees as at June 30, 2019 and as of July 1 2020 to those with at least 20 employees as at the end of 2019. The remaining employers will be covered by the PPK regulations from January 1, 2021.

The system provides for the automatic enrollment for all employees aged 19 through 55, as from the end of the third month of employment (with an optional PPK participation waiver) and so effectively increases the gross cost of employment. The biggest employers are obliged to conclude agreements with suitable benefits providers for the management of their schemes by 25 October 2019 and agreements for program participation for eligible employees by 12 November. Other employers will need to kick off preparations for starting the program shortly.

Changed definition of discrimination and unequal treatment

An open catalogue of discrimination/unequal treatment grounds is expected to make it easier for employees to proceed with claims of discrimination/unequal treatment against their employers. The following are listed at present as protected characteristics in the Polish Labour Code: sex; age; disability; race; religion; nationality; political beliefs; trade union membership; ethnic origin; creed; sexual orientation, employment for a definite or indefinite period of time, working full-time or part-time. The new wording of the Labour Code makes it explicit that these protected characteristics are just examples and that other characteristics may be brought up as well if not objectively justified. This marks a move away from prohibiting treatment which is discriminatory to prohibiting that which is unfair. It potentially places heavy new burdens on employers to be able to justify differences of treatment not just from the employment relations perspective but now from the legal/litigation angle too.

Where employers included the exact wording of the current Labour Code provisions in their internal policies or procedures, they should look to adjust them to the new wording. The changes come into force on 7 September 2019.

Damages for bullying

Until 7 September 2019 an employee whose health suffered from bullying could seek compensation from the employer for personal injury/detriment to health. However, only if bullying resulted in that employee terminating the employment relationship could he/she then seek damages (i.e. recompense for costs incurred, e.g. of medical treatment) from the employer. From 7 September 2019, the ability to claim damages for bullying will not depend on the termination of the employment relationship.

This is an important change for employees who often were faced with a difficult choice of whether to remain at the employer with no financial compensation or to seek damages for bullying but to lose their employment for the privilege. It also reduces the risk to the employee if he resigns but is then unable to show that this was justified by the treatment he received.

Work certificate

As of 7 September again, the employer is obliged to issue a “work certificate” to a departing employee on his/her last day of employment if it does not intend to enter into a new employment relationship with him/her within the following 7 days. The employees will have more time to request amendment of the work certificate as the 7 day deadline can be prolonged to 14 days. They will be able to ask the court to order the employer to issue a work certificate. Employers will be penalized for the lack of timely supply of the work certificate, and not only for a failure to produce it.

Right to be reinstated to work

Under the current procedural rules, the court may oblige the employer to keep the employee on the books until the final court ruling in an unfair dismissal case only when the decision of the court is reached during the notice period. In practice, given the workload of the employment courts and resulting delays in hearing dates, this rule is hardly ever applied in practice. As of 7 November however, the court will be able to decide, at the request of the employee, that he/she is to be employed by the employer until the case is resolved by the final judgement regardless of how long that takes. It is yet to be seen what the practice of courts will be in the case of such requests from the employees.

Social Benefits Fund

An employer employing at least 20 Full Time Equivalents as at 1 January of any year should create a Social Benefits Fund (unless it opts out in a special procedure). Only for the second time since 2011, this contribution was increased since January 2019 and is now based on the average salary in the national economy in the second half of 2013 instead of 2012. In practice, this means that starting from January 2019, the basic contribution amounts to PLN 1229.30. The contributions are to be made in full by 30 September, while 75% of the amount must be contributed to the Fund by 31 May. The proposed increase in the contribution is to cover the period from 1 August 2019 and the increased contribution is PLN 1271.21. The increased contributions are proposed to be made by the end of October 2019, adding an additional deadline to the existing rules but also new financial and administrative burdens on the employer to calculate, contribute and agree rules of spending of the increased amounts. This legislation is still pending.

© Copyright 2019 Squire Patton Boggs (US) LLP

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About this Author

 Małgorzata Grzelak Labor and Employment Attorney Squire Patton Boggs
Partner

Małgorzata Grzelak’s practice focuses on labor and employment, corporate and real estate issues. She advises clients in the energy industry, hotel industry, commercial and service sectors, and various other industries. 

Małgorzata provides advice to investors outside Poland in the course of their commercial activities on investment processes including all aspects of setting up a business presence in Poland, acquisition or leasing of real estate, structuring of labor and employment relations, immigration, and various corporate and contract law...

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