NEWSLETTER 05/2007
REVOLUTION IN LABOUR OVERSIGHT AND INSPECTION
A new Act on the State Labour Inspectorate has been in force since 1 July 2007. The new Act, which replaces an act from 1981 that had been amended numerous times, is designed to adopt the tasks of the Labour Inspectorate to meet new needs brought about by development and differentiation in the organizational form of employers, growing competition among companies, and increasing instability on the labour market. This instability, in particular, has spurred the parliament to step up monitoring of compliance with Polish labour law. This goal is to be achieved by expanding the monitoring authority of the Labour Inspectorate and reinforcing the legal instruments for effective inspection and oversight activities. The parliament has sought to obtain the legal ability to take immediate and effective action when violations of employee rights are discovered.
In addition to improved effectiveness of inspection and oversight actions, the parliament also introduced stiffer sanctions against employers for crimes and petty offences for violating the rights of workers. The new Act has also provided inspectors much stronger means for enforcing sanctions.
Will the parliament's goals be achieved?
Organizational changes and more effective inspections
From 1 July 2007, the Labour Inspectorate now also handles the issue of legal employment of foreigners. Previously this area was within the jurisdiction of the central governmental administration, which assigned these duties to the province offices.
Now an inspection may be carried out not only in Poland, but also abroad, if the employment relationship there is governed by Polish law. In addiction to the means available before, now a labour inspector may take testimony from persons in connection with an inspector without the presence of the employer. The record of the testimony may be provided to the employer, but without information identifying the person testifying.
In practice, under the old act, such testimony could be taken under Convention No. 81 of the International Labour Organisation, but nonetheless the use of this approach could be challenged.
The new Act provides for a 7-day deadline for appealing from a decision by the labour inspector, rather than 14 days as provided by the Administrative Procedure Code.
Stronger sanctions for the Labour Inspectorate - a real threat to companies
The sanctions which the Labour Inspectorate may use against employers has been increased to include heavy financial sanctions. As of 1 July 2007, the maximum amount of each single fine is PLN 10,000 (increased from PLN 5,000), or, in the case of employers who are legal persons or organizational units without legal personality, PLN 50,000 (previously PLN 25,000). When a fine is imposed multiple times, the maximum is now PLN 50,000 (previously PLN 10,000), or, in the case of employers who are legal persons or organizational units without legal personality, PLN 200,000 (previously PLN 100,000).
Upon motion of a person who has been assessed a fine and has paid it, in justified circumstances the fine may be refunded, by the 75% or in its entirety. Previously the legislature allowed the possibility of refund of a smaller portion of the fine, such as half. The change means that now only in very well-founded cases will it be possible to obtain a refund, as the enforcing institution may allow only a refund of 75% or the entire fine, and has no other leeway.
Stiffening penalties
The new Act also introduces stiffer penalties for the petty offences set forth in Art. 281, 282 and 283 of the Labour Code. As of 1 July 2007, the court may impose a fine of up to PLN 30,000 for these offences.
Specifically, the legislature has provided that a fine of PLN 1,000 to PLN 30,000 may be imposed upon a person who is an employer, or acting for an employer, who:
- enters into a civil-law agreement under circumstances where, pursuant to Labour Code Art. 22 §1, an employment contract is required;
- fails to provide written confirmation of an employment contract entered into with an employee;
- terminates an employment relationship in gross violation of labour law;
- imposes sanctions on employee other than as provided by labour law provisions concerning disciplinary liability of employees;
- violates regulations on working time, employee parental entitlements, or employment of minors;
- fails to maintain employment documentation or personnel files; or
- stores employment documentation or personnel files in a matter that puts them at risk of being damaged or destroyed.
This fine may be imposed on a person who, despite being under a duty to do so:
- fails to make timely payment of wages or other benefits owed to an employee or entitled family member, or improperly reduces the amount of such wages or benefits, or makes an improper setoff against such amounts;
- fails to provide holiday leave to an employee, or improperly reduces the length of leave; or
- fails to provide an employment certificate to an employee.
The same fine may also be imposed on a person who:
1. is responsible for the state of occupational health and safety, or directs employee or other individuals, and fails to comply with occupation health and safety rules and regulations;
1a. despite having the duty to do so, fails to notify the labour inspector and the state sanitary inspector within 30 days of the location, type and scope of business conducted, or change in the location, type or scope of business conducted, or of a change in technology that could increase health risks to employees;
2. despite having a duty to do so, fails to insure that construction or expansion of a structure or part thereof where work is to be performed is conducted on the basis of designs that comply with occupational health and safety requirements, as approved by certified experts;
3. in breach of a duty, equips the work station with machinery or other technical equipment that fails to meet requirements for certification of compliance with norms;
4. in breach of a duty, provides individual protective devices to an employee that fail to meet requirements for certification of compliance with norms;
5. in breach of a duty, uses
a) materials or technical processes without first determining their degree of harmfulness to employee health, or without taking appropriate precautionary measures,
b) chemical substances and preparations that are not clearly marked in a manner that allows them to be identified, or
c) hazardous substances or chemical preparations without the proper profile for the substances, or without packaging to prevent harmful action, fire or explosion;
6. despite a duty to do so, fails to notify the regional labour inspector, prosecutor or other applicable institution of a fatal, serious or group accidents on the job, or any other work-related accident with the same effect, if it may be classified as an accident on the job, fails to report an occupational illness or suspicion of the same, fails to report an accident on the job or occupational illness, or presents false information, evidence or documents concerning such accidents or illnesses;
7. fails to perform an order imposed by an institution of the State Labour Inspectorate in a timely manner;
8. interferes with the activity of an institution of the State Labour Inspectorate, particularly by hindering performance of a workplace inspection, of fails to provide information necessary for performance of the tasks of the State Labour Inspectorate; or
9. without a permit from the labour inspector, allows a child under 16 to perform work or other gainful employment.
Summary
With significant reinforcement of the institutions of the Labour Inspectorate, there appears to be a need to introduce standing internal procedures for monitoring compliance with labour law and a system for managing the legal and financial risk associated with possible involvement by the Labour Inspectorate. Previously, given the weakness of the legal sanctions used against employers by the Labour Inspectorate, companies did not take particular precautions to be prepared in the event of an inspection by the Labour Inspectorate. Internal procedures were not adopted. Now that the Labour Inspectorate has been strengthened, this would be risky. Thus it would helpful for companies to conduct periodic internal audits of their own compliance with labour law norms.
Mateusz Hołysz
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