Employment in Poland 2012
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1 BRIEFING NOTE Employment in Poland Employment Cost 2. Legal System 3. Employer s obligations 4. Types of employment contract 5. Working time 6. Holiday 7. Sick pay 8. Parenthood rights 9. Mass redundancy This Briefing Note has been prepared by TGC Corporate Lawyers as a general guide to legal and procedural issues relating to employment in Poland. We trust that you will find it useful, but it is not comprehensive and is not a substitute for taking professional advice. If you wish to discuss any matters set out in this Briefing Note, please contact us.
2 Market pay levels An employee is required to be compensated for work performed, whether at an hourly, daily, weekly or monthly rate. The base salary must be paid at least monthly. Employment Cost The minimum salary is stipulated by the Government for each calendar year. In 2012 it amounts to PLN 1,500 (approx. EUR 375). According to statistical data, the average gross salary at the end of 2011 was approx. PLN 3,600 (approx. EUR 900). The diversity of salary levels is significant Polish managers earn approximately 9 times more than blue collar workers. Salary calculation Gross monthly base salary includes social insurance (ZUS) and income tax (PIT) contributions of an employee. Employees also pay premiums for retirement, disability and sickness funds total approx. 18% of gross salary. PIT rates for 2012 are 18% and 32% depending on income level. Thus after deductions an employee receives as a net amount approx. 2/3 of gross salary. Polish labour law is quite detailed and gives employers a limited scope of issues for mutual negotiation with employees. There are three levels of employment regulation: 1. Labour Code mandatory for all employers acting in Poland and stipulating minimum rights and entitlements for employees. 2. Internal work and pay regulations these are mandatory for companies with more than 20 employees. Internal regulations apply to all staff of the relevant company and cannot be less favourable than the Labour Code provisions. Legal System 3. Employment contract this regulates specific terms of employment of an individual employee, taking into consideration generally binding rules of the Polish Labour Code and internal company regulations, if any. General terms of employment also apply to foreign employees posted to work in Poland for a fixed period of time, whether the employer is based in an EU member state or not. Compliance with labour law by employers is supervised by the National Labour Inspectorate (PIP), which can impose cash penalties. Employer s Obligations Polish labour law imposes several administrative obligations on employers in relation to personnel administration matters. The regulations are binding for all employers, regardless of the number of staff employed and the company's legal status, and are subject to supervision by the National Labour Inspectorate. On the day a newly established Polish entity employs its first employee, it must as an employer comply with certain legal requirements: 2
3 Employer s registration: filing registration forms with the Social Insurance Office (ZUS), Tax Office (US), State Labour Inspectorate and Sanitary Inspectorate. Social insurance (ZUS) registration of any new employee. Employer s Obligations Establishment of personnel files and other required HR records. Any changes to employment status such as pay rises, changes of position or scope of duties etc, should also be confirmed in writing and copied to employees personnel files. Each employment document for a Polish national should be prepared in the Polish language and the Polish version will prevail, irrespective of other foreign language versions in existence. Provision of new staff with preliminary medical examinations and health & safety training. Calculation of monthly payroll in accordance with Polish labour law, social insurance law and personal income tax provisions. Maintenance of HR records as well as processing of payroll calculations can be outsourced (for further detail, please refer to the website of our affiliate business support practice, Contract Administration, at Types of Employment Contract (a) (b) (c) Probationary term contract This is concluded for a specified period of max. 3 months. This type of contract may precede any other type of employment contract. Notice of termination for a 3-month probationary term is 2 weeks. Definite term contract This is a contract with a fixed duration e.g. for one year (the law does not clearly determine the length of such contracts). The contract is terminated at the end of the definite period. If termination happens earlier, the required notice period is at least 2 weeks. The parties may conclude only two consecutive definite term contracts; the third one must be for an indefinite term. Indefinite term contract A contract concluded for an indefinite time period is used where the parties intend for their relationship to be permanent. This contract is the most advantageous for an employee, as it offers him/her the widest scope of employee's rights in relation to termination. The termination period for an indefinite term contract depends on the employee's period of employment solely with the current employer: 3
4 Types of Employment Contract Period of Employment Notice Period less than 6 months 2 weeks 6 months 3 years 1 month 3 years + 3 months The most popular approach in Poland is usually for the first contract to be for a 3 month probationary term, and for the second contract to be for an indefinite term. Working Time Basic working time may not be longer than 8 hours in a 24-hour period and an average of 40 hours per five-day working week during a specific settlement period decided by the employer (max. four months). The overtime limit is 4 hours per day and 150 hours per calendar year. A different annual overtime limit may be regulated in the Company Work Regulations or individual employment contracts. An employee is entitled to at least 11 hours of continuous rest per day and at least 35 hours of continuous rest per week, including at least 11 hours of rest per day. The employer is obliged to keep records of working time, including overtime work. The Labour Code specifies the minimum amount of paid annual holiday entitlement. This right arises on 1 January of each year. Holiday Saturdays are not included as holiday. Annual holiday should comprise: 20 days if the employee has been employed for less than 10 years; or 26 days if the employee has been employed for at least 10 years. Sick Pay Parenthood Rights An employer is required to pay 80% of remuneration for up to 33 days of sick leave in a calendar year (in the event of an employee who reaches 50 years of age, this will be for only 14 days in a calendar year). In cases of longer sick leave, the Social Insurance Office bears the cost of the absence. For accidents on the way to work or from work, or illness during pregnancy, during the period specified above, an employee has the right to 100% of remuneration. An employer may not serve notice on a female employee or terminate her employment contract during her pregnancy or maternity leave, unless there are reasons which justify termination of the contract without notice through the employee's own fault, and any trade union active in the workplace which represents the employee concerned has consented to termination of the contract. During pregnancy or maternity leave, an employment contract may be terminated with notice by the employer only if 4
5 bankruptcy or liquidation of the employer is declared. The Labour Code provides for equal protection of employment for both parents during maternity or paternity leave. Parenthood Rights As of 1 January 2012 a female employee is entitled to maternity leave of: Single birth 20 weeks of basic leave + up to 4 weeks of optional leave Multiple birth 31 weeks of basic leave + up to 6 weeks of optional leave As of 1 January 2012 fathers of children under the age of 12 months are entitled to use an additional 2 weeks of paternity leave. After maternity leave, the mother or father of a child may apply for unpaid leave for the purposes of raising their child for a maximum of 3 years. This leave may be used until the child reaches the age of 4 years. The cost of child raising leave is borne by the social insurance system. There are specific rules relating to dismissal for economic reasons, operational requirements of an enterprise or due to structural, technological or production changes and these only apply if a company has at least 20 employees. The mass redundancy procedure applies where an employer terminates employment for economic reasons during a period not exceeding 30 days, with at least: Mass Redundancy 10 employees if the company employs employees 10% of the workforce if the company employs employees 30 employees if the company employs more than 300 employees The employment relationship is terminated at the end of a statutory or contractual period of notice. An employee terminated under the mass redundancy procedure is entitled to statutory compensation, the amount of which depends on the length of employment with the current employer as follows: Employment period: Redundancy compensation: less than 2 years 1 month salary 2 8 years 2 months salary more than 8 years 3 months salary 5
6 Our Expertise TGC Corporate Lawyers is an international corporate law firm with offices in Poland (Warsaw, Łódź, Wrocław, Kraków), Czech Republic (Prague, Brno), and Slovakia (Bratislava). We act for some of the world s leading companies, navigating them through the local business environment whilst understanding the international commercial environment. We offer the full range of legal services including corporate, M&A, litigation, finance, employment, real estate and tax. Together with our affiliate business support practices (Baker Tilly Poland, Baker Tilly Czech Republic, Baker Tilly Slovakia and Contract Administration), our 390 staff provide complete professional and administrative support to businesses operating in Poland, Czech Republic and Slovakia. Baker Tilly Poland, Baker Tilly Czech Republic and Baker Tilly Slovakia are leading professional practices specialising in accounting, audit, tax and IT consultancy. All are independent members of Baker Tilly International, the 8 th largest accounting and business advisory network in the world. Contract Administration is one of the largest providers of outsourced payroll administration and HR administration in central Europe, managing a portfolio of more than 100,000 payslips per month. Our Employment Team, which includes qualified lawyers as well as HR consultants, provides our diverse client base with a comprehensive service in both Polish labour law advisory and human resources management. We handle the entire employment cycle from analysis of the labour market, recruitment of required professionals, and drafting necessary employment documentation, through to solving on-going legal and management issues. 6
7 We provide comprehensive support in the following areas: Employment Law Our Employment Law Team includes lawyers with specialist knowledge in all aspects of local and international employment law and practice: Executive pay and benefit structuring Confidentiality and non-competition agreements Employment termination arrangements Consulting agreements Labour court litigation Share option schemes Mass redundancy and HR restructuring HR department documentation and policies On-going legal and regulatory support to management and supervisory board members HR Management Our HR Management Team includes business consultants, occupational psychologists and career advisers. We support employers in optimizing their personnel management and development policies: Job descriptions and competency profiles Performance appraisal systems Employee satisfaction surveys Telework and management of virtual teams Discrimination and mobbing: complex solutions including workplace diagnosis, prevention policies, and training Psychosocial risk management (i.e. work stress, burnout): identification and prevention policies, and work-life balance programs Management of organisational change and internal communication Outplacement programmes Staff recruitment Contact Details If you would like to obtain further information on the above issues, please do not hesitate to contact: Christian Fielding Solicitor, Group Acquisitions Director TGC Corporate Lawyers Crown Tower ul. Hrubieszowska Warsaw, Poland Tel.: (+48 22) cfielding@tgc.eu Agnieszka Janowska Director of Employment Team TGC Corporate Lawyers Crown Tower ul. Hrubieszowska Warsaw, Poland Tel.: (+48 22) ajanowska@tgc.eu Dorota Strzelec Consultant/ Director StaffPoland Sp. z o.o. Crown Tower ul. Hrubieszowska Warsaw, Poland Tel.: (+48 22) dstrzelec@tgc.eu 7
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