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In Poland, the forms of employee involvement at board level differ according to economic sector (public or private).The political transformation in Poland brought about numerous economic changes which in turn led to fundamental changes in the way employees were involved in company decision-making.
When a company was privatised the employees were given the right to acquire, free of charge, up to 15% of the shares held by the State Treasury. However, the Commercialisation and privatisation act (1992, 1996) also introduced a right of employee representation on the supervisory board for former state-owned enterprises transformed into commercial companies, with the State Treasury as single shareholder (commercialisation). According to this legislation, the employees in such companies nominate two fifths of the supervisory board members. Once the State Treasury has sold more than 50% of the shares, however, the number of employee representatives on the board can be reduced. However, as long as the state remains a shareholder the company is obliged to keep a minimum of employee representatives on the board (2–4 members depending on board size).
Polish legislation foresees a two-tier structure for joint-stock companies, whereas limited liability companies are only required to establish a supervisory body if their starting capital exceeds PLN 500,000 (about EUR 125,000) and the number of shareholders is greater than 25. The supervisory board monitors all aspects of the company’s operations. The powers of the supervisory board also include suspension – on good grounds – of some or all members of the management board. Supervisory board members are appointed and removed by the general meeting. Employee-nominated supervisory board members are elected in a general and direct ballot by the employees. As the law does not distinguish between different kinds of supervisory board members the rights of employee representatives are the same as those of other board members (including remuneration).
If a ‘commercialised’ (privatised) company has more than 500 employees, the employees are entitled to elect one member of the management board, in addition to representation on the supervisory board (this right is retained by the employees even after more than half the shares have been sold by the State Treasury).
It is worth noting that in the period 1990–2005 more than 7,000 state-owned enterprises (that is, 80% of all state-owned enterprises as of 1990) underwent privatisation. At the end of 2005, there were over 1200 commercially active single-shareholder companies of the State Treasury (with the state being the only shareholder). Added to that should be the – difficult to estimate – number of entities in which the State Treasury retains shares or stock. The right to elect representatives to the supervisory board was intended partly to compensate employees for their loss of participation rights before companies underwent commercialisation.
The remaining state-owned enterprises are governed by the 1981 Act on workers’ self-management, introduced in reaction to the disastrous results of enterprise management under the planned economy. The Act grants extensive rights to employees, mainly through an employees’ council (elected by the employees) which has fairly extensive controlling rights and also appoints the manager of the company. As the number of state-owned enterprises is continuously shrinking, so too is the number of enterprises with worker self-management. On 31 December 2005 only 712 state-owned enterprises existed. In more than half these enterprises (52.7 %) bankruptcy or liquidation proceedings have been initiated. In enterprises other than state-owned or ‘commercialised’ (formerly state-owned) companies until recently there were almost no legal grounds for non-unionised employees to claim participation rights in the management of their workplace, with the exception of some specific circumstances. Also, in companies that underwent ‘direct privatisation’ – that means where all assets were sold directly – the new (private) owner was not obliged to introduce board-level participation. Moreover, when companies were taken over entirely by new owners the newly acquired rights to board-level participation were often abolished. Nevertheless, in so-called welfare pacts signed between trade unions and the new private owners the unions were in some cases given the right to delegate representatives to the supervisory board. In the private sector, employee involvement takes place mainly through the trade unions.
The trade union structure in Poland is fairly decentralised. In order to have a real say in matters affecting employees, branch or national trade unions must establish company organisations. On the other hand, employees often form single-company trade unions that cover the operations of only one employer. Workplace representation generally takes place through local trade unions (single channel). However, in the majority of workplaces (especially in smaller companies) there is no representation at all. According to a study by the Polish Centre for Research on Public Opinion (Centrum Badania Opinii Społecznej), conducted 5–8 November 2004, trade unions operated in only 9% of privately-owned establishments.
Until recently, participation in management by non-union bodies took place only in the absence of trade unions at the workplace. The participatory rights of non-union representatives could thus be described as subsidiary. The most important situations in which non-union representation may represent employee interests are the conclusion of an agreement on planned collective redundancies, the conclusion of an agreement on the employee pension scheme and codetermination with an employer of the internal regulations on the social benefits fund.
The trade unions’ monopoly in the workplace may to some extent be broken by the Law on information and consultation of employees. The Law implements Directive 2002/14/EC of the European Parliament and the Council of 11 March 2002 establishing a general framework for informing and consulting employees in the European Community. The Law provides for the creation of works councils which are to be informed and consulted in relation to the most important decisions concerning the establishment which affect employees’ interests. The obligation to set up ‘national’ works councils applies to commercial employers who employ at least 50 employees. Information to be provided to works councils by the employer includes: activities and economic situation of the employer and any foreseen changes in that, as well as the present state and structure of employment. Consultation with works councils shall take place in relation to foreseen changes in employment and measures taken to keep employment at the present level, as well as measures which may significantly affect work organisation or contractual relations.
The works councils are conceived as representing of all the employees and as separate from the trade unions. However, according to Polish law representative trade unions have priority in selecting its members. If there is a representative trade union organisation in the establishment, this organisation nominates the members of the works council and informs the employer about the result. If there is more than one representative trade union organisation in the establishment, all the organisations nominate works council members by common accord. Should the representative trade union organisations be unable to reach agreement on the membership of the works council within 30 days of commencing negotiations, the selection of works council members shall be done by the employees on the basis of trade union nominations. Only in non-unionised establishments may the members of the works council be selected from candidates proposed by the employees. The privileged position of trade unions in setting up ‘national’ works councils is the result of the trade unions’ efforts to prevent employers from promoting the establishment of ‘union-free works councils’ in order to weaken the position of the trade unions in the company.
It must be also noted that Polish legislation lays down the legal basis for employee involvement in European Companies created under Polish law (Law on the European Economic Interests Grouping and European Company of 4 March 2005). The same employee guarantees are provided for in the Law on European Cooperative Society of 22 July 2006 which enters into force on 18 August 2006. The Polish Law on European Works Councils of 5 April 2002 lays down the rules for the setting up and functioning of EWCs under Polish law, as well as for the selection of Polish members of SNBs and EWCs regulated by other member state legislation.
Source: The European Company - Prospects for worker board-level participation in the enlarged EU (edited by Norbert Kluge and Michael Stollt). Brussels 2006.
Update: Dagmara Skupień, University of Łódz, Faculty of Law and Administration, August 2006)
Country reports on board-level participation in the new member states are available in several languages.
DOCUMENTS:
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State of implementation of Directive 2002/14 (information and consultation of employees) in Poland by Dr Dagmara Skupień, University of Łódź, Faculty of Law and Administration
The Polish Law on employee information and consultation of 7 April 2006, implementing Directive 2002/14, obliges employers who employ 100 employees or more (50 employees or more since 2008) to establish a works council. According to the data presented by the Polish Ministry of Labour and Social Policy, 1,019 works councils had been set up in Polish establishments by 5 October 2006. On the other hand, in the period between 15 and 24 May 2006, as many as 3,965 agreements were signed between employers and trade unions or employees’ representatives in which the parties decided not to set up a works council (Gazeta Prawna, 5.10.2006, see: www.gazetaprawna.pl). Download full report as pdf
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(3) Transposition process
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Poland adopted the law on employee involvement in the European Company (SE) in March 2005.
DOCUMENTS: (Link to EU Commission website, inofficial translations are available for some countries)
Report: Transposition of the SCE Regulation and Directive in Polandy (Dagmara Skupień, University of Łódz, Faculty of Law and Administration, August 2006)
The Law on the European cooperative society (SCE) entered into force on 18 August 2006. The Law’s provisions concern: a) the registration procedure, b) the governing bodies of the SCE, c) the transfer of the statutory seat of the SCE, d) employee involvement in the SCE, e) protection of employees’ rights, and f) sanctions for non-compliance. With regard to the selection of the members of the special negotiating body (SNB) the representative trade unions have priority in selecting SNB members. Only if there are no representative trade unions the SNB members selected by the employees. However, in the latter situation selection is from candidates proposed by the trade unions. The main Polish trade unions (NSZZ Solidarnosc, OPZZ, and Forum Zwiazków Zawodowych) may nominate their officials who are not employees to the SNB. Download full report as pdf
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(5) Other relevant information (Info-Box)
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