Civil law contracts - what changes await us?

Over a million Poles work under mandate contracts and specific specific contracts - they are more flexible than an employment contract. Opponents call them "junk contracts." Trade unions show a number of abuses by employers using these forms of employment, although - according to Gazeta Wyborcza - the results of the National Labor Inspectorate's inspection show that the victims of abuse account for 15-25 percent. from 1.35 million people working under civil law contracts. Accordingly, the real battle of their supporters and opponents began. The Polish government and the European Union responded to the discussion. It is already known that significant changes to the temporary contracts are in the pipeline. What? Read on.

Civil law contracts - the end of quick layoffs!

In March, the government adopted a draft amendment to the Act on the Social Insurance System and certain other acts. This action was one of the elements of the announced pact for work for 2014. The changes are aimed at increasing the security of employment conditions in Poland. "This is the first step in overcoming the pathological situation where employment contracts (...) have been replaced by mandate contracts and specific specific work contracts. In most cases, these contracts should be classic employment contracts, because the work is performed for the employer, has its own calendar, schedule, is performed under supervision and has all the premises of full-time employment.”- commented the Minister of Labor, Władysław Kosiniak-Kamysz. He also added that companies employing employees on the basis of an employment contract will receive bonuses during tenders.

The first change results from the judgment of the Court of Justice of the EU. The Court ruled that shorter notice periods discriminated against employees on temporary contracts. The adopted amendment is to equalize the period of notice of employees on mandate contracts with employees with contracts for an indefinite period.

Employees under contract of mandate, in the event of unemployment, will also be entitled to apply for unemployment benefits.

Civil law contracts and ZUS

The draft amendment also provides for mandatory, full premium payment of civil law contracts. It is worth noting that today it is possible for an employee to pay health contributions from temporary contracts. If the employee works on several temporary contracts, the contributions are paid from one of his choice. The draft changes in the premium allocation of contracts of mandate is to affect just such people. Currently, the employee most often pays contributions from the lowest contract. "We propose to sum up these contracts and first pay the premium at least on the amount of the minimum wage”- said Minister Kosiniak-Kamysz. For the time being, commission contracts are to be contributed up to the amount of the minimum wage. In the future, contracts for specific work will also be charged (until 2017).

The Minister of Labor argues that: "paying ZUS contributions at least from the minimum wage will make the conclusion of mandate contracts instead of employment contracts less financially attractive for employers". This will allow for the strengthening of healthy competition, because now, as Kosiniak-Kamysz notes: “Companies employing employees on mandate contracts instead of employment contracts lower their costs and become more competitive. Honest employers who hire employees under employment contracts that guarantee full security are the losers”.

No more endless civil law contracts

The amendment also covers the permissible working time on temporary contracts. After working 36 months on fixed-term contracts, the employee will have to be employed for an indefinite period. "No more using fixed-term contracts for an indefinite period. A fixed-term contract cannot last indefinitely"- commented the minister.

Changes in regulations - who will gain, who will lose?

First, employers will suffer. Employment costs will increase and therefore either the employer will have to pay more or the employees will receive salaries less new costs.

Freelancers and people with part-time jobs will also lose. Until now, they paid voluntary contributions to the selected contract, now the contracts will be added up.

Pupils and students can gain. They will still not pay contributions, so they can become more competitive and gain an opportunity to gain work experience.

Employees cheated on temporary contracts will benefit - they will have a legal basis to assert their rights. The law will take greater care of employees.

Additionally, the state treasury will benefit. According to the estimates of the Ministry of Labor, premiums for contracts of mandate will increase revenues to the Social Insurance Fund in 2014 by PLN 350 million.

At the same time, the minister emphasizes that the proposed changes are not a desperate budget patching, but a long-term systemic change aimed at eliminating "pathological abuse of civil law contracts instead of jobs" from the labor market.