newsflash: amendments to the labour law to come in 2012

Extension of employees’ entitlements related to parenthood

The amended Labour Code provisions on employees’ entitlements related to parenthood will come into force on 1 January 2012. From the next year an additional maternity leave (which an employee may use after using standard maternity leave) will be extended up to four or six weeks. A minimum additional leave for an employee who has taken care of a child or filed for adoption will be extended up to two weeks.

Paternity leave is leave that may be used by an employee father during a period of 12 months from the child’s birth. It will be extended up to two weeks.

Use of outstanding holiday leave

From 1 January 2012, changes to the Labour Code will extend the period within which the employer must grant an employee outstanding holiday leave for the previous calendar year.

Currently, employers must grant outstanding leave only until the end of the first quarter of the following year. The amendment will extend this period until 30 September of the following year.

As a result, employers will be more flexible when planning employees’ leave.

Increase in the minimum salary

On 1 January 2012, a minimum monthly gross salary of employees will be increased to PLN 1,500 (around EUR 350).

This will increase: the maximum statutory severance payment (15 times the current minimum monthly salary); the bonus for working at night (20% of the hourly rate from the minimum monthly salary); the minimum remuneration for downtime; the minimum compensation for discrimination or mobbing at work; and the amount against which offsets from an employee’s monthly remuneration is allowed.

Extended settlement period and changes to working time

Employers who have benefited from favourable solutions prescribed in the Act to alleviate the consequences of the economic crisis for employees and entrepreneurs (Anti-Crisis Act) should be aware that these provisions might end. As things stand, the Anti-Crisis Act will expire on 31 December 2011. It is rumoured that the Anti-Crisis Act’s validity may be extended, but this not confirmed and it is unclear whether the Act will be prolonged and, if so, for how long.

If the Anti-Crisis Act expires, from 1 January 2012 it will no longer be possible to extend a settlement period up to 12 months. This may cause complications for employers who have applied longer settlement periods extending beyond 1 January 2012.

The possible expiration of the Anti-Crisis Act will deprive employers of the chance to apply favourable regulations regarding individual employee work schedules, which currently allow work to commence twice within 24 hours without it being deemed overtime. If the Anti-Crisis Act is not extended, as of 1 January 2012, work commenced twice within the same 24 hours will be deemed overtime under the Labour Code. Employers will thus have to pay employees overtime for such work or give them corresponding time off.

Financial support for employers

The possible expiration of the Anti-Crisis Act will limit the advantages for employers related to so-called economic downtime arising from financial problems of the employer. This economic downtime may be applied for up to six months towards certain employees, upon their consent. Such employees perform work and receive the minimum statutory remuneration, financed partly from public means.

If the Anti-Crisis Act is not extended, from 1 January 2012 employers will not have the possibility to finance employees’ remuneration partly from public means for a period of downtime and will have to pay all remuneration themselves. Moreover, from 1 January 2012, employers will lose the possibility to apply for financial support from public means, in particular for the training and post-graduate studies of employees or for employee benefits covered by reduced working time or economic downtime. The Anti-Crisis Act protects against termination of employment for employees who have received such benefits. The protection starts after the period of receiving the benefits and lasts for an aggregate period of six months. During this time, the employment contract may be terminated only due to employee performance. This protection period will continue after expiration of the Anti-Crisis Act (31 December 2011).

Definite-term employment contracts

If the Anti-Crisis Act expires, from 1 January 2012 there will be no limitation of the maximum period of 24 months for which a one or more definite-term employment contracts might be concluded. So no more than two employment contracts will be allowed to be concluded for a definite term. The third will be deemed as concluded for an indefinite term.

An employment contract concluded for a definite term during the period of validity of the Anti-Crisis Act (22 August 2009 – 31 December 2011, if not extended) and still in force after 1 January 2012 will be deemed a “first” employment contract concluded for a definite term.

Working time of the handicapped

From the beginning of 2012, as a result of changes to the act on occupational and social rehabilitation and on employment of the handicapped (Act on Employment of the Handicapped), a limitation on the working time of employees with considerable or moderate handicap to 7 and 35 hours respectively will apply only if the advisability of such limitation is certified by a physician.

This means that from 2012 the working time of the handicapped in may be extended. There is, however, a risk that the Independent and Self-Governing Trade Union Solidarność will appeal against such change to the Constitutional Tribunal, and that the amendment is quashed.

Number of the handicapped employees

The amendment to the Act on Employment of the Handicapped also provides for increasing the minimum statutory number of handicapped employees, including employees with considerable or moderate handicaps, in so-called protected work employment establishments, to up to at least 50% of the staff (at least 20% considerably or moderately handicapped). Employers who maintained the status of protected work employment establishment before 31 December 2010 will have until 30 June 2012 to increase the number of handicapped employees. As a consequence of this amendment, employers will have to employ additional handicapped employees if they want to maintain the status of protected work employment establishment in 2012.

2012 will bring changes in the rates for public financing of monthly remuneration for handicapped employees. For employees with considerable, moderate and light degree of handicap, the respective financing will be: from 1 January 2012 up to 170%, 125% and 50%; from 1 July 2012 up to 180%, 115% and 45%. Financing will be calculated from PLN 1,276 (around EUR 300).

Reduction of obligations regarding social insurance

As a result of the Act on Reduction of Certain Obligations of Citizens and Entrepreneurs, from 1 January 2012 the statute of limitations for overdue social insurance premiums – as well as the period in which premium payers (e.g. employers) might seek reimbursement of overpaid premiums – will be shortened from 10 to five years. For both employers and the Social Insurance Authority, this will limit their right to demand amounts due connected with payment or non-payment of premiums for social insurance.

New provisions also allow for less frequent information to employees on paid social insurance premiums (the so-called monthly reports). Currently employers must supply this information once a month; from next year, only once a year (or more frequently upon request of the employee). The period of storing settlement declarations for social insurance premiums and monthly reports will also be shortened from 10 to five years. The above changes will likely simplify the work of companies’ bookkeeping and HR departments.

Moreover, from 31 May 2012 the Social Insurance Authority will not be able to charge employers or other payers of social insurance premiums an additional fee equal to 100% of overdue premiums. From the same day, not paying social insurance premiums will not be an offence punishable by fine. Thanks to the waiver of this sanction, employers will not be exposed to the harsh consequences the Social Insurance Authority is currently empowered to apply. This will be a considerable benefit for employers, in particular those who have difficulty in paying premiums on time.

Working time of drivers

The definition of “night time” used to determine the working time of drivers is a period of four hours between midnight and 7:00 a.m. Introduction of a separate definition of night time for drivers will enable employers to avoid less favourable provisions of the Labour Code in this respect.

Next year employers will also have the possibility of adopting an individual working time system for drivers. Employers will be able to determine different hours of commencing and ending work each day. But an individual working time system may still not infringe the driver’s right to minimum daily and weekly breaks (11 and 35 hours respectively). Applying an individual working time system will enable employers to effectively use the working time of drivers and adjust it to their needs.

Amended provisions of the Act on working time of drivers also introduce the possibility of extending daily working time to up to 12 hours. This applies to drivers working in a balanced working time system, involved in road transport. This is another amendment enabling employers to make the working time of drivers more flexible and adjust it to the needs of the company.

New provisions also introduce changes to the obligations of employers. They will have to obtain a written statement from drivers about an additional average number of weekly hours of road transport or other work performed under another basis than the employment contract. If the employee does not render such work, the employer must obtain a statement confirming that the work has not been performed. Employers will be released from the obligation to keep a working time record for employees working in a task-oriented work time system, and for employees who receive a lump sum payment for overtime or night time work. However, employers and employers obliged to keep a working time record will have to keep individual charts of employees’ absence from work, indicating the type and duration of absence (e.g. medical certificate for three days). The above changes will likely entail additional work and the need to make changes in the management of human resources.

Business trips

In 2012 some changes are planned to the regulation on amounts paid to employees for business trips. Drafts of the relevant acts are still in the legislation process and the final wording is not complete.

Remuneration of managerial staff in banking sector

From the new year, new rules will start to apply for determining variable components of remuneration of bank managerial staffs (e.g. members of management board or other categories of people employed in banks and who have an essential influence on the profile of the bank’s risk). According to resolution no. 258/2011 of the Financial Supervision Authority dated 4 October 2011, the policy of variable components of remuneration will be introduced by the bank after being approved by the Supervisory Board. The policy adopted by the bank must include an obligation to pay at least 50% of variable remuneration in stock (or instruments of a similar nature); must predict spreading at least 40% of variable remuneration for a period from three to five years (if the remuneration is considerable [specified by the bank], at least 60% of variable remuneration); and should make the payment of any deferred part conditional upon the performance of a given person, the performance of the organisational unit at which it is employed, and the performance of the bank itself.

A resolution also imposes an obligation to inform the Financial Supervision Authority about the number of bank employees whose total remuneration in the previous year exceeded EUR 1,000,000. Such information should be provided by 31 January of each year.