AMENDMENTS TO LAWS

Minimum wage in 2015

As of 1 January 2015, the gross minimum wage will increase from PLN 1,680 to PLN 1,750. The amount of the minimum wage is defined in the Regulation issued by the Council of Ministers on 11 September 2014 on the Amount of the Minimum Wage in 2015 (Journal of Laws of 2014 Item 1220).

DRAFT AMENDMENTS TO LAWS

New principles of employment for a definite term

On the website of the Ministry of Labor and Social Policy, a bill to amend the Labor Code was published concerning rules for entering into and terminating employment contracts for a definite term.

According to the assumptions for the bill, it will not be possible for the term of employment based on a definite term contract to exceed 33 months. This limit will also be binding in the case of employing one person under several such contracts. Furthermore, it will not be possible to enter into more than three such contracts.  After the maximum period or number of contracts is exceeded, the contract will be treated as an employment contract for an indefinite term.

However, the above restrictions will not be binding for an employer who will indicate objective reasons on its part justifying employment for a longer definite term based on the employer’s temporary needs.

Furthermore, the new regulations will enable termination of definite term contracts in accordance with the applicable notice periods. The duration of the notice period will depend on the service time at a particular company in the same way as for indefinite term contracts.

The bill also provides for the possibility of entering into a subsequent contract for a probation period if the same employee is hired to perform work of a different kind. Even though such a possibility does not follow from the currently binding regulations, it was accepted by the Supreme Court (cf. judgment of 4 September 2013, II PK 358/12).

Compensation for work on days off

The current regulations provide for only one form of compensating employees for work performed on a day off resulting from a five-day (on average) working week (therefore, in most cases for work on a Saturday) due to the circumstances provided for in Article 151 § 1 of the Labor Code. Pursuant to Article 151[3] of the Labor Code, the employer should, in exchange, grant the employee another day off on a date agreed with him or her before the end of the current settlement period.

MPs presented a bill to amend the Labor Code with regard to the above issue (print no. 2777). The amendments proposed by MPs assume that if it is impossible to grant a day off, the employer will be allowed to compensate for such work with a pay supplement up to the amount specified in Article 151[1] § 1 Item 1 of the Labor Code (i.e. a 100-percent supplement) for each hour of work on a day off. It will be also possible to apply this form of compensation if the employee makes a request for a pay supplement instead of a day off. Currently, such an option may be applied only in respect of work on Sundays and public holidays (Article 151[11] § 3 of the Labor Code). The initiative to amend the law aims to make regulations in the above scope uniform.

An opinion on the bill has been presented by the Chief Labor Inspector (GIP). In her opinion, the proposed amendment does not raise any doubts to the extent that it provides for the possibility of a pay supplement for each hour of work on a day off if it is impossible to grant in exchange another day off (e.g. because of the employee’s illness or because the employee worked on the last day off in the relevant settlement period). What raises doubts, however, is the solution which makes it possible to compensate an employee for work on a day off with a pay supplement disbursed at the employee’s request. This is because situations in which an employer cannot grant another day off until the end of the settlement period should be treated as exceptional (and therefore occurring occasionally). On the other hand, introducing the possibility of disbursement of a pay supplement at the employee’s request may lead to the adoption of a common practice of compensating work on a day off with such a supplement, which would violate the principle of five-day (on average) working week as referred to in Article 129 § 1 of the Labor Code.

Social insurance contributions on mandate contracts

The Sejm passed amendments to the Social Insurance System Act (print no. 2242). As of 1 January 2016, the duty to deduct social insurance and disability benefit contributions will to apply to all mandate contracts for an amount at least equal to the minimum wage (PLN 1,680 in 2014 and PLN 1,750 as of 1 January 2015).

The amendment also includes the provision that as of 1 January 2015, compulsory social insurance and disability benefit contributions will be deducted from remuneration of supervisory board members. Their social insurance contributions will be payable regardless of whether they are obligated to pay them on account of other titles (e.g. on mandate contracts) and regardless of whether they receive old age or disability pension. The base for the calculation of contributions will be income received for membership in a supervisory board and the payer will be the company of the supervisory board. To date, the only contributions deducted from income of supervisory board members have been health insurance contributions. The bill will now be processed by the Senate.

Parental leave for a single father

The Ministry of Labor and Social Policy has prepared a bill providing for the possibility of parental leave to be taken also by single fathers. At present, the right to a leave is derivative, because it depends on the acquisition of the rights by the mother. Therefore, the father may take such a leave on the condition that the mother is employed and has used the first 14 weeks of the maternity leave, which is reserved exclusively for her. The bill assumes that in the event of the mother’s death or abandonment of the child, or if her health condition prevents her from taking care of the child, the father or another insured member of the close family will be able to take a parental leave.

Also amended will be the rules for calculating the base for the calculation of a benefit in the event of a sickness insurance period shorter than 12 months for persons conducting non-agricultural business activity and other professional groups for whom contributions are calculated based on a declared amount of earnings.

Reduced scope of archiving employee files

The Council of Ministers would like to reduce the scope of employers’ duties with regard to archiving employee documentation. It is proposed to abolish the duty to store documents for 50 years, except for selected files. The proposal is to archive for 50 years only those documents that may be relevant from the perspective of the right to pension (in particular: employment contract, non-competition agreement, agreement on professional development, employment certificate supplemented by data currently recorded in RP-7 forms, e.g. the amount of income paid. The amended regulations are to provide a detailed list of such documents. As a rule, other employee documents will have to be stored for at most 5 years from the employment termination date.

It is not known yet when exactly the parliamentary work on the bill will commence.

MOST INTERESTING CASE-LAW

Employment contract cannot be terminated after an absent employee returns to work

An employer may terminate an employment contract without notice if the employee’s inability to work due to an illness lasts longer than the periods prescribed in Article 53 § 1 of the Labor Code. The employer, however, has no right to do so if the employee returns to work when the cause of his or her absence disappears. In other words, it is not possible to terminate an employment contract pursuant to Article 53 § 1 of the Labor Code if the employee recovers the ability to work and physically turns up at work. Such a stance was taken by the Supreme Court in its judgment of 21 May 2014 (I PK 290/13).

Payment of remuneration may be recognized to be unjustified

An employee may not waive the already acquired right to remuneration. The parties to the employment relationship, however, may enter into an agreement providing for cuts in the employee’s remuneration applicable to future payments, i.e. following the date of execution of the agreement.

In the event of an already acquired right to remuneration, assessment of whether it is justified to pay out particular remuneration components (in the specific case, a jubilee award) may be performed in light of Article 8 of the Labor Code (i.e. taking into consideration the principles of social coexistence and the socioeconomic purpose of the right to the specific remuneration component). Such a stance was taken by the Supreme Court in its judgment of 13 March 2014 (I PK 189/13). The Supreme Court admits such a possibility even though the prohibition on waiving the right to remuneration is binding. Such a view has been accepted in previous rulings issued by the Supreme Court (e.g. judgments dated 26 June 2012, II PK 275/11, 9 February 2007, I BP 15/06, or 15 November 2006, I BP 12/06). This applies to cases where actions taken by an employee to obtain a particular remuneration component (a jubilee award or compensation resulting from a collective agreement) were assessed to be unfair. An example may be a situation in which an employee first waives the right to a jubilee award or some other benefit in order to obtain certain favors from the employer and then the employee demands to receive the award or other benefit. Even though the employee’s waiver of the benefit is ineffective, the Supreme Court accepts in such cases the possibility of refusing to pay the benefit justified by reasons of an equitable nature. Everything depends on the circumstances of a particular case and is within the court’s powers to issue decisions based on its own assessment.

Accident must have some temporal or spatial connection with work

A connection between an accident and work must be temporal or spatial.

In the former case, the event causing the accident must take place during working time. This means not only the time of the effective performance of work but also the time of remaining at the employer’s disposal. A spatial connection exists if the event causing the accident occurred at the place of work or at a place within a danger zone caused by work. Such a stance was taken by the Supreme Court in its judgment of 27 May 2014 (I PK 275/13).

Collective agreement may be executed during a strike

Parties may enter into collective agreements ending negotiations or mediation at any stage of a collective dispute, also during a strike, industrial action or after their conclusion. In each case, it will be an agreement based on the regulation constituting the source of labor law. What follows from this is that negotiations and mediation are not restricted in time and may be conducted at any stage of a collective dispute. This reflects the so-called principle of social peace, which is one of the main principles of the conduct of collective disputes and which aims at resolving disputes in the first place by using peaceful methods. Such a stance was taken by the Supreme Court in its judgment of 8 July 2014 (I PK 312/13).