The regulatory changes in the labor market, which are announced by the Ministry of Family, Labor, and Social Policy (MRPiPS) in Poland, will increase the cost and risk of conducting business. These changes will negatively impact the income and freedom of entrepreneurs, employees, and contractors, and consumers will suffer from higher prices of goods and services. According to the Council of the Polish Economists Association, the ministry’s vision, led by Agnieszka Dziemianowicz-Bąk, of a harmful and utopian view of a labor market wherein everyone should work based on a contract of employment, regardless of objective economic circumstances, the nature of the work, and personal preferences, is highly concerning.
The first of the regulations considered in our position – a bill on the conditions for allowing foreigners to work in Poland – introduces many improvements, such as digitization of work permit procedures. However, it also requires employment based on a contract of employment, which means that entrepreneurs will not be able to cooperate with foreigners on the basis of more flexible civil law contracts. This negative change will make it difficult for foreigners to enter the Polish labor market as they will have to meet high requirements to make their employment profitable. Some may be pushed into the grey area, hindering their integration, and others may lose out to competition from richer countries or more open regulations. Future immigrant integration will be key for maintaining economic development and public spending due to an aging society and a low pensionable age.
Similar threats will arise if the State Labor Inspection’s (PIP) competencies are expanded as predicted. PIP is to have the right to demand the conversion of a civil law contract or a B2B contract into a contract of employment by way of an administrative decision. It is hard to imagine objective criteria under which PIP could issue such decisions, likewise, in the case of the so-called entrepreneur’s test proposed during the Law and Justice government. Such regulation will significantly raise the risk of business operations in Poland and lower the competition of affected companies. It could lead to abuse of power towards entrepreneurs and workers and originate lengthy court disputes, thus further costs for workers, employers, and the State Treasury.
Another significant consequence will be further, paternalistic limitations on the will of parties in the labor market as well as B2B contractors and the repercussions for civil law. The possibility of transforming an agreement between independent entities by way of administrative decision paves the way for further interference in the fundamental market economy principle of freedom of contract.
Directly related to the predicted PIP reform is the issue of implementing the Directive on improving working conditions provided through internet platforms (PWD). The essence of the Directive’s regulation is the presumption of an employment relationship for persons providing services through internet platforms, which will have to be introduced into the legal systems of member states. However, in Poland, the issue of compatibility of such regulation with the Constitution and the risk of extending such presumption to all workers to prevent violation of equality arises. Such a broad change will have significant consequences for the Polish model of labor law (which currently does not include such presumption), as well as for the economy.
The direct effect of implementing PWD in relation to internet platforms alone will be the elimination of easy-access jobs for Poles and foreigners that allow for extra income or an easy start to a career even for people without experience, less educated, in poorer regions, or not knowing the language. Besides, the increase in operational costs will directly translate into price increases for consumers. As for extending the mentioned presumption to all categories of workers, we must consider the scenario of the actual elimination of civil law contracts and B2B contracts from the broad labor market. This will significantly limit employment flexibility and depending on the possibility of shifting this cost and additional risk onto clients of a given company or industry – profitability may decrease or the prices of products and services may increase. In any case, the competitiveness of the Polish economy on the international stage will decrease.
The three labor market regulations indicated in this position of the TEP Council do not exhaust the list of harmful and populist projects which the ministry led by Agnieszka Dziemianowicz-Bąk is working on, or announced they would be working on. In this context, such initiatives as 1) a four-day work week; 2) introducing sick leave remuneration at 100% (currently it’s 80%); 3) opposition to relaxing trade on Sundays, should also be mentioned.
In conclusion, the TEP Council calls on the legislators and the ruling coalition for constructive dialogue, the conduct of thorough analyses of the effects of regulations, and the appropriate adjustment or abandonment of solutions that we believe to be harmful to the Polish economy. It is necessary to engage a wide range of experts in the field of labor law, civil law, and economics, so that the planned changes fit into the existing regulatory environment and do not lead to shocking changes of a systemic nature, in relation to both the law and economic trade. Lastly, the costly, utopian vision of a labor market where everyone should work based on a contract of employment, regardless of objective costs, benefits, the nature of work, and personal preferences, should be rejected.
Source: https://ceo.com.pl/stanowisko-rady-tep-w-sprawie-planowanych-przez-mrpips-regulacji-w-obszarze-rynku-pracy-39468
