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(en) Poland, zsp - Junk contracts and anti-crisis shield - another legal sell - COVID-19 Theory and practice [machine translation]

Date Mon, 6 Apr 2020 07:41:32 +0300


How much are government promises worth that employees suddenly deprived of income will not be left alone? Will the government, which has not decided so far to abolish toxic waste contracts, now take it? To try to answer these questions, let's look at some of the provisions adopted on March 28 this year by the Sejm. "Crisis Shield". ---- Before proceeding to the analysis of the current situation of "garbage" employees, let us recall the basics. Junk employment is one in which employment contracts, with certain guarantees regarding employment stability, have been replaced by mandate contracts without these guarantees, contracts for specific work or B2B settlements ("on invoice"). Colloquially speaking, junk contracts. I will use this term without quotation marks, because it reflects well the substandard quality of such employment. This junk has never been as clearly visible as in the time of sudden crisis.

What is the employment relationship?

The matter is quite clearly defined in Article 22 of the Labor Code. It is a "commitment to perform a specific type of work for and under the direction of the employer and at the place and time designated by the employer." It is worth noting that management does not have to be direct and does not have to rely on each specific task and does not necessarily mean the physical presence of the supervisor. It is important, however, that the employee is subordinate to work, performs work in person, in a place (e.g. office, point of service) indicated by the employer and at certain working hours. Other important features of an employment relationship include making due efforts (rather than providing a specific service), compliance with work regulations, and the use of tools provided by the employer. The employee is not an independent entrepreneur, who can organize his work in any way, hire subcontractors, use his own materials and tools to achieve the agreed work result. Pretending that an employee is an entrepreneur is a pathological practice on the labor market, an obvious fraud and fiction that aims to reduce labor costs. The price for this is depriving the employee of paid holiday and sick leave (if he decides not to lower the net salary and optional insurance), years of service calculated to the amount of the pension, as well as, which is extremely important in the case of the COVID-19 epidemic, remuneration for the parking period . The employee's option to choose a particular contract is absent in many industries. Junk contracts and other forms of illegal employment are commonly imposed on employees in industries such as catering and all types of services. For decades, the authorities looked through their fingers at these illegal practices that depleted the state budget in the name of misunderstood "economic development". However, this development was based on a model of low-paid and insecure work. This model has just collapsed before our eyes, leaving, according to various estimates, more than a million people overnight with no sources of income.

IMPORTANT: If the employee performed work on the terms of an employment relationship, you can apply to the court to determine the existence of the employment contract and to pay all benefits in this respect. See our article on the example of security guards: What should security guards do on a junk contract that the boss doesn't pay?

Garbage collection has many aspects and deprives employees of many rights, but let's focus on what seems to be the most urgent need: remuneration for the time when the employee cannot work through no fault of his own.

Parking pay

For comparison, let's remind you what guarantees of parking pay are provided for in the Labor Code for employees on a contract of employment. The case is governed by art. 81 of the Labor Code. Pursuant to this provision, an employee for the period of non-performance of work, if he was ready to perform it and could not perform it for reasons related to the employer (and such reasons include the closure of the workplace due to an epidemic state) is entitled to 100% of the basic salary, without any allowances and bonuses. If the basis of remuneration with an hourly or monthly rate has not been determined, the parking remuneration cannot be lower than PLN 2,600 gross (this is the minimum remuneration from January 1, 2020).

We already know from signals that reach the Association of Polish Syndicalists that employers, expecting the need to pay parking wages, force employees to sign termination of employment contracts by agreement of the parties or statements changing the working time from full-time to quarter-time, etc.

Signing such denunciations by agreement of the parties is highly detrimental to employees, as they deprive them of the possibility of claiming their full pay due to parking, and in the event of termination of the employment contract by agreement of the parties, they also lose the right to unemployment benefit.

Notwithstanding the above, the current situation of employees who have worked on employment contracts is legally much stronger than employees on junk contracts.

Who is entitled to the parking allowance proposed by the government?

Most employees have heard the assurances of Prime Minister Morawiecki regarding the "parking" payment for employees on junk contracts. What does the case look like in the light of the draft Act on COVID-19, which was adopted on March 28 this year by the Sejm and is waiting for approval by the Senate?

From art. 15zq section 5 of the COVID-19 Act, "a person performing a civil law contract is entitled to a parking benefit if the civil law contract was concluded before February 1, 2020." Here the first difficulty appears. After all, people working on junk contracts sometimes sign contracts every month, often in arrears (i.e. they work without a contract for some time, although this is not legal). What about people who worked, for example, for 3 years with one employer, but signed new contracts every month? Does the parking benefit include them? The regulations in this case are not clear enough, which may lead to the rejection of applications of persons whose last contract was signed, e.g. just before the outbreak.

The analogy to continuity of employment in the case of subsequent fixed-term employment contracts may come in handy in this matter. Article 25 (1) of the Labor Code specifies the maximum duration or number of successive fixed-term employment contracts, followed by the law of indefinite employment contract. This means that the Labor Code treats the entire period of employment with one employer as a continuity, regardless of the fact that this period was covered by a number of fixed-term contracts. Certainly the continuity of contributions to the Social Insurance Institution (ZUS) for the entire period of employment is of great importance for an employee in terms of entitlement to receive sickness benefits. But can the provisions of the Labor Code by analogy be applied to junk contracts? Without the court's prior determination of an employment relationship based on an employment contract? Such an approach would undermine the sense and purpose of the parking service proposed by the government. Were the employees condemned to sue all employers who employed them for a long period of time on junk contracts despite having an employment relationship?

Let us assume, however, that this first problem has been solved and an employee working on a junk contract will receive a parking benefit. Another condition is that the income from the civil law agreement should not be higher than 300% of the average monthly salary from the previous quarter (according to the Central Statistical Office). This average salary for the month of February 2020 was PLN 5 530.48. The income threshold is therefore PLN 16,591.44. Most employees won't have the trouble to fit under this threshold.

The amount of parking allowance for junk contracts

How much will this benefit be compared to the parking benefit under the employment contract? As we have seen above, the parking benefit under the employment contract cannot be lower than PLN 2,600 gross, i.e. PLN 1,921 "on hand".

According to Art. 15zr. Act on COVID-19, parking benefit is payable in the amount of 80% of the minimum remuneration for work. At the moment, it is PLN 2080 (it will be free from deductions and executions). However, if in the month preceding the submission of an application for parking benefit the sum of revenues is less than 50% of the minimum wage (i.e. less than PLN 1,300), the parking benefit will be only as much as the sum of revenues generated in the previous month.

This is another rather strange record. After all, employees lost the opportunity to earn money at the end of March. The act, after being passed by the Sejm, waits 30 days for possible approval by the Senate. From the moment of its adoption, another time will pass before the authorized persons submit an application for payment of the parking allowance (about it below). Thus, in the month immediately preceding the submission of the application, employees may not receive any income and be left without any means of subsistence for the months of April, May and maybe even June. What amount of parking benefit is offered to them if they have no income? It seems that this possibility has not been thought of, which seems unbelievable.

But even if this obvious defect of the Act were removed and the time prior to February 1, 2020 were taken as the previous employment period, then employees could be on unpaid sick leave and not achieve full income. Their parking allowance would then be unduly underestimated. Therefore, the best solution would be to set one level of parking allowance.

Who submits the application?

Now it's time for the real icing on the cake. In accordance with art. 15zs item 2, the application for payment of the parking benefit is submitted via, NOTE, employer. They cannot be submitted directly by an employee who is vitally interested in paying out these funds. Other regulations indicate that ZUS will require employers to register non-filed work contracts for inspection. The control of illegal work contracts is obviously good, but let's be honest: which employer using illegal work contracts in the case of an employment relationship will forward to ZUS an application for parking benefit for employees, if any of them was covered by a work contract? This recipe additionally guarantees the fiasco of the entire program.

Summary

Adopted regulations are a mockery of employees. Many people employed on junk contracts will not be able to benefit from the parking allowance. Labor courts will remain the only way to fight for remuneration, as part of actions to establish the existence of an employment relationship and payment of benefits due, including parking pay under an established employment contract. However, the state of the epidemic means that most courts have suspended their proceedings. Ongoing and so long trials (minimum one year) will be postponed to the end of the epidemic, and even then the chaos in the courts will make it very difficult to assert your rights. Nevertheless, such a procedure remains the only possibility to enforce the benefits due to employees in the event of a complete failure of the government assistance program. The Act also does not take any step towards replacing by virtue of the law junk contracts for employment contracts, which seems to be more and more necessary in the pathological situation in which the Polish labor market finds itself. It also seems that introducing a basic income in this situation would be much more sensible and less costly to administer.

See also: Crisis junk employment - you need decisive action | What kills us - coronavirus and capitalism

Jakub Zaczek
ZSP ZW - Warsaw

https://zsp.net.pl/umowy-smieciowe-i-tarcza-antykryzysowa-kolejny-bubel-prawny
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