Since early autumn, the government in Poland has been working on a draft of a statute submitted by the Ministry of Family, Labour and Social Policy, which can downright disturb the status quo of standard employment agreements co-existing with flexible working contracts, common across the Polish job market. As the current (third) version of the draft proposes, the main mechanism to stir the pot will be the new powers of district labour inspectors.
At present, labour inspectors have the right to file a claim in court to establish an employment relationship, should they, while carrying out the inspection, notice a civil law contract covering what the Labour Code deems fit for an employment contract. The inspector is thus competent only to initiate proceedings, whereas the existence of employment relationship is in fact established by way of a court ruling. The inspectors rarely use this device in practice, due to such factors as the long time taken by court proceedings and non-cooperation from the parties, who frequently finds no upside in reclassifying the contract already concluded, especially when the work is being done under the B2B model.
The planned reform aims to authorize the inspector to simply issue a decision on transforming a civil law contract into an employment agreement where appropriate, bypassing the need to petition the court. The main goal of the proposed solution is obviously to streamline and simplify the reclassification process. The parties will have the right to appeal the decision to the Chief Labour Inspector first, and then later to a labour court. Judicial oversight of the conducted administrative proceedings will of course be retained, yet not before the CLI’s final decision. The aspect that tends to be viewed with particular suspicion among both employers and contractors providing their services in the B2B formula is the immediate effect of the reclassification fiat as regards the moment of employment relationship arising and the retroactive results in terms of tax law, social security, health insurance and mandatory employee fund contributions. Both the immediate effect the inspector’s decision would take and the limits to the backdated employment relationship it would establish are matters still under discussion in the government, which makes it difficult to predict the solution the final draft is going to settle on.
Particularly problematic seems the topic of the employment relationship existing even after the inspector’s reclassification decree is successfully challenged. In such a case, its results are not quashed even if the decision turns out to have been issued unlawfully. Granted, the draft statute does not exclude the possible accountability of the Treasure for having made the unlawful decision, nevertheless seeing the actual results of redress involves typical courtroom-related obstacles and complications.
What should be noted is that the drafted changes do not materially alter the grounds for assessing a particular working relationship as fulfilling the criteria for a contract of employment. Still, the new powers vested in labour inspectors would no doubt impact the legal risks borne by people and businesses entering into work contracts based on non-employment models. The planned changes would also broach the issue of new information exchange tools between the State Labour Inspection, Social Insurance Institution and the head of National Revenue Administration. Apparently, the new regulations may make it easier to churn out the employment relationship reclassification decisions if the inspector, while controlling, assesses that dozens or hundreds of people share the same situation.
The draft legislation is right now at the evaluation stage in the Government Legislation Centre. Following intragovernmental back-and-forth, the bill will pass on to the lower and upper legislative chamber before the final step of getting submitted to the president for his signature. Unlikely as the chances of it happening quickly are, if the legislative process goes ahead according to its originators’ plans, the novel provisions are to come into force really soon: on 1 January 2026.
Dariusz Zimnicki, Partner at ZL LEGAL Legal Advisors, contributed to this review.
