Work has begun in the Polish Sejm on the government’s draft reform of the National Labour Inspectorate (PIP), which is intended to give labour inspectors stronger tools to combat the misuse of civil law contracts, including so-called “sham” mandate contracts and B2B arrangements. According to the government, a key element of the reform is the power to order the conversion of such contracts into employment contracts, while maintaining oversight of inspectors’ decisions by labour courts.
“In the amended Act on the National Labour Inspectorate, unfortunately, contrary to what government representatives are saying, we see nothing that would change in favor of entrepreneurs. The act is complicated, difficult to implement, and if it benefits anyone, it will be law firms,” Marek Kowalski, Chairman of the Federation of Polish Entrepreneurs (FPP) and a member of the Presidium of the Social Dialogue Council, told the Newseria news agency. “The original act was six pages long; someone started amending it and it grew to 30 pages. The law is complex.”
The reform is part of the commitments included in Poland’s National Recovery Plan (KPO). Government communications have emphasized that fulfilling this “milestone” in strengthening the Labour Inspectorate is important for unlocking EU recovery funds, and that Poland has until the end of June to implement the required measures. The first version of the bill, which sparked strong controversy among entrepreneurs, was halted by Prime Minister Donald Tusk.
In the new version of the draft, adopted by the government on 17 February, the National Labour Inspectorate retains the power to convert sham civil law and B2B contracts into employment contracts through an administrative decision. However, the appeal procedure has been clarified. An employer would have 30 days to appeal an inspector’s decision to a labour court. The government also proposes an expedited court review, with cases to be examined within 30 days. According to the Ministry of Labour, at the appeal stage the labour court would be able to grant interim protection, ensuring that during the appeal proceedings the contract could be amended, terminated, or dissolved only under labour law rules.
“The proposed safeguards in this act are illusory. Today, it takes three to four years to obtain a ruling in court. With the number of cases that will arise, it may take five years. Until then, the entrepreneur will not know whether they are acting correctly or not, and after five years it may turn out they were wrong. The financial consequences could be so severe that the entrepreneur will not survive,” argues the FPP chairman.
“The draft assumes that an inspector will not only be able to reclassify a contract but also define its terms — including the type of work, the place of its performance, or the level of remuneration. An administrative authority should not independently create the content of a new contractual relationship between parties and is disproportionately interfering in an area previously reserved for common courts,” said Robert Lisicki, Director of the Labour Department at the Lewiatan Confederation, in a statement.
One of the most contentious aspects concerns B2B relationships. Entrepreneurs fear that without clear criteria and definitions, decisions to “reclassify” contracts may create legal and financial uncertainty, particularly where business activity involves investments, equipment purchases, or VAT settlements.
“How do you convert a B2B contract into an employment contract? In a B2B model we pay VAT and have fixed assets — what are we supposed to do with them? These are questions to which there are no answers,” Marek Kowalski stressed.
In his view, the economic consequences of introducing the law in its current form could be entirely negative, ranging from the risk of court paralysis to distorted competition if inspections and decisions affect companies unevenly.
“It introduces a high level of uncertainty. It will also undermine competitiveness in the market, because those who are inspected will find themselves in a much worse position than those who are not,” said the Chairman of the Federation of Polish Entrepreneurs. “If we were to consider the reform a success, we would be looking at 4 million cases, since there are 1.8 million people employed on mandate contracts and 2.2 million working under B2B arrangements. If we wanted to convert all these contracts into employment contracts, first of all we would need 87 years — we have calculated it precisely — and secondly, the Polish judiciary would not withstand it.”
The Federation of Polish Entrepreneurs proposes an alternative approach: gradually moving toward full social security contributions for mandate contracts, with a longer adjustment period to avoid a regulatory “shock” while also reducing competitive inequalities in the market.
“The market does not like shocks. Back in 2018, we said this change could be implemented over four years and the market would adapt perfectly,” Marek Kowalski recalled.
The Ministry of Labour has also proposed introducing an individual interpretation mechanism to be issued by the Chief Labour Inspector at the employer’s request. Its purpose would be to clarify how labour law provisions should be applied in determining whether a specific legal relationship meets the criteria of an employment contract.
