The Polish Parliament has adopted revolutionary amendments to the Act on the National Labor Inspectorate (PIP). The new regulations are intended to target employers who abuse civil law and B2B contracts to conceal their true employment relationship. What does this mean for hundreds of thousands of employees and companies in Poland?
Fictitious B2B and junk contracts under scrutiny: what is the reform?
Under the newly adopted changes, which were supported by the majority of MPs, labor inspectors will be granted much broader and more effective powers. Polish Press Agency (PAP), auditors will now be able to effectively identify situations in which individuals formally employed as independent contractors (B2B) or working under contracts of mandate are actually performing the duties of full-time employees. The first step will be to verify whether the work is performed in a clearly defined location, during designated hours, and under the direct supervision of a supervisor.
New powers and PIP inspection: the inspector will change the B2B contract to a full-time job
Whereas previously, after detecting violations, an inspector could only refer the matter to court, the rules of the game are now changing drastically. The most important innovation is that the National Labor Inspectorate (PIP) has the authority to order the conversion of fictitious contracts into full-time positions through an administrative decision.
As the portal explains in detail Business Insider PolandIf a concealed employment relationship is detected, the inspector will be able to require the employer to immediately remedy the violation. However, the employer will retain the right to defend themselves and will have time to appeal the PIP’s decision to a labor court.
The law also provides for an amicable resolution of the matter. If, following an inspection, the employer and employee voluntarily sign a standard employment contract, the matter can be closed.
Penalties for fictitious B2B: are the new decisions of the Labour Inspectorate retroactive?
Despite the obvious benefits for employees, the reform is sparking heated debate in the legal and business communities. Experts on the website Infor.pl They point out that one of the most controversial points of the bill is that the inspector’s decisions regarding the recognition of an employment relationship will only apply “forward.” This means that the inspector, even if they prove that they have worked for many years under conditions consistent with the employment contract, will not be able to retroactively change the status of the contract. The bill is currently awaiting further consideration in the Senate.
Billions of euros at stake: what does KPO have to do with all this?
Combating sham contracts is not only about protecting workers’ rights, but also a fundamental economic necessity for Poland. As you can read on the official website government KPO portal, granting the inspection the power to transform contracts is one of the so-called “milestones” of the National Reconstruction Plan.
The implementation of this labor market reform directly determines whether Poland will receive further multi-billion tranches of European Union funds. Given that hundreds of thousands of people in Poland work under civil law contracts, Brussels is firmly demanding that Warsaw clean up this area.
Sources: PAP (Polish Press Agency) / Business Insider Polska / Infor.pl / Official KPO portal (kpo.gov.pl)
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