Poland: New information and consultation legislation
Legislation implementing the EU information and
consultation Directive came into force in
The Polish parliament has finally ratified legislation implementing the information and consultation Directive (2002/14/EC) (EC: New working time and consultation Directives in force), after more than a year's delay due mainly to the inability of the social partners to reach agreement. The new legislation - the Act establishing works councils - came into force on 25 May 2006.
The deadline for
adopting the Directive into national law was 23 March 2005, although several
countries have still not transposed the Directive. Member states that did not
have an existing generalised system of information and consultation legislation
were granted a three-year transition period. These were the
Scope of the Directive
The Directive states that either undertakings employing at least 50 employees or establishments employing at least 20 employees should be covered by the scope of the legislation. It also allows member states to lay down particular provisions for undertakings or establishments that pursue a range of other aims (including political, professional, organisational, religious, charitable, educational scientific or artistic aims), as long as provisions of that nature already exist in national legislation.
Scope of the Act establishing works councils
The Polish government determined that the new legislation should apply to all commercial undertakings that employ at least 50 people and that certain categories of business should be exempt, including: state-owned companies; part state-owned companies employing at least 50 people; and other organisations, such as unions or national film institutions, in which employees are already covered by separate regulations.
For undertakings with fewer than 100 employees, the legislation will apply from 23 March 2008. For all other undertakings the legislation applied from 25 May 2006.
Definitions
Before the
implementation of the Directive, there was no general obligation in
The Directive leaves it up to member states to determine the practical arrangements for exercising the right to information and consultation at the appropriate level, although it lists three areas that should be covered by information and consultation arrangements:
- information on the recent and probable development of the undertaking's or the establishment's activities and economic situation;
- information and consultation on the situation, structure and probable development of employment within the undertaking or establishment and on any anticipatory measures envisaged - in particular, where there is a threat to employment; and
- information and consultation on decisions likely to lead to substantial changes in work organisation or in contractual relations.
The establishment of definitions of information and consultation that would cover the economic and financial aspects of the business was a source of controversy during the Polish discussions on how to implement the Directive. In the end, the government modelled its approach on the wording contained in art. 2 of the Directive: that information is the transmission by the employer to employee representatives of data to enable them to acquaint themselves with the subject matter and to examine it; and that consultation is the exchange of views and the establishment of dialogue between the employee representatives and the employer.
Topics covered by information and consultation in the Polish text include: economic issues; the enterprise's situation and any resource changes; planned redundancies; changes in the personnel structure; changes to the type of work to be carried out; working conditions; and working time.
Economic issues
The Act does not define precisely what is meant by "economic issues" and analysts have sought clarification on whether works council members can request access to a company's financial results when redundancies have been announced, arguing that without such information, the employee representatives will be unable to assess the company's true financial situation.
Other experts have claimed that the Directive itself is unclear about what should be included under economic issues and are calling on the government to be more specific. One suggestion has been for the government to compile a list of issues for consultation.
For their part, employers' organisations have said that companies will be reluctant to release figures on profits and losses in a highly competitive economic climate, since they do not have faith in the effectiveness of the confidentiality clauses contained in the legislation. These prohibit works council members from disclosing any confidential information for three years after they cease to be members of the council.
Under the Act, employers are not obliged to disclose information that may jeopardise or be disadvantageous to their economic position. Employers can potentially use this clause to refuse to inform and consult on a range of issues. Although works councils are entitled to take the employer to court if a conflict arises, judgments may take up to six months, draining the union's financial resources and acting as a disincentive to works councils taking employers to court.
Setting up a works council
The employer has 30 days to inform the
employment ministry in writing about the establishment of a works council. The
process has to be triggered by the employees, rather than there being an
automatic employer obligation to establish information and consultation (as,
for example, in
Size
The legislation sets out the following rules governing the size of the works council:
- at an enterprise with 50 to 250 employees, the works council should have three employee representatives;
- between 251 and 500 employees, five members; and
- more than 500 employees, seven members.
Companies with union representatives
At companies with two or more unions, all unions have to agree on the appointment of the works council members. Each trade union has the right to appoint at least one member.
If the number of unions exceeds the number of council members set out in the legislation, each union may still appoint one member, which means, for example, that there may be companies of 50 to 250 employees with more than three works council members.
Companies with no unions
In a company with no trade unions, a works council may be established by the employees themselves. They must send their application directly to the employer and it must be supported by 10% of employees before it is legally binding.
Elections
Employees have 21 days to put forward their candidates for election to the works council. In companies employing up to 100 people, candidates need to have the backing of 10 people. In practice, this means that candidates in larger companies will be union candidates, as unions have a strong presence in these companies. In large companies of over 100 employees, candidates have to be supported by at least 20 people.
It is up to the employer and the employees to agree on election arrangements. If, after 30 days, the parties have not agreed the rules, it becomes the employer's responsibility to finalise them. At the subsequent elections, the candidates with the highest number of votes will be elected.
Costs
This section of the Act provides that the employer or trade union will be responsible for the costs associated with works council activities, depending on how the council was appointed. If the company does not have a union, the employer is obliged to cover all costs and, in this case, the law requires that all expenditure be formally accounted for (such as the cost of using office facilities and office supplies).
Protection for works council members
The Act guarantees that members of the works council cannot be dismissed by the employer without first consulting the works council. Further, the employer cannot unilaterally force a change to works council members' working conditions or reduce their pay.
Employers' representatives have announced plans to contest this provision before the constitutional court. They have pointed out that there are already 40 categories of protected employees, which in their view hinders companies' competitiveness and prevents them from dismissing inefficient workers. The employers have suggested that, in the long run, the rules may have a negative effect because employers will not recruit people who enjoy employment protection in any of the 40 categories.
Pre-existing information and consultation agreements
Employers who already have an information and consultation agreement are not obliged to establish works councils, as long as, under the agreement, information and consultation takes place between the employer and elected employee representatives.
Knowledge of the Act
Although there are many companies that already consult employees on a number of issues, several surveys have found a high level of ignorance about the new rules and obligations. It has been reported that most employers questioned did not know of the four-month deadline - until 25 September 2006 - to inform employees about their right to set up a works council within the company.
If employees wish to exercise their rights to establish a works council, they have until 25 November 2006 to organise elections.
Agreement status
The employer is obliged to inform and consult with the works council on the issues set out under the Act. Both parties are expected to consult in good faith, with a view to reaching an agreement. Some analysts have expressed concern that this process will be no different from the negotiation of social agreements, the provisions of which some companies do not respect.
Possible shortcomings
Some experts have pointed to potential inconsistencies between the Polish legislation and the EU Directive, since the aim of the Directive is to guarantee employee representation and its wording simply defines employee representatives as representatives "provided for by national laws and/or practices". The Polish legislation, however, allows trade unions to retain a strong role in putting forward candidates in undertakings employing more than 100 employees.
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