Employment Contracts in Poland: An Increasing Labor and Human Rights Risk in the EU

With a population of 38 million and a gross domestic production of almost USD 600 billion in 2019, Poland is the largest of the economies that joined the European Union in its expansion in 2004. While Poland is widely considered one of Europe’s largest success stories economically, the country faces challenges with emigration, immigration, and most prominently the rule of law. The European Union and international community are particularly concerned about the ruling PiS (Law and Justice) party’s efforts to undermine judicial independence and attacking basic human rights – particularly those of the LGBTQ community.

While Poland’s troubling approach to the rule of law, judicial independence, and media pluralism are widely covered in international media, ELEVATE would like to highlight a less prominent human and labor rights risk in Polish supply chains: terms of employment.

When recruiting, companies in Poland have two main options to choose from: contracts of employment and contracts of mandate. Employment contracts are covered by the labor code, which specifies that by entering an employment relationship, the employee provides a certain type of work for an employer, under the direction of the employer, and at the time and place designated by the employer. Contracts of mandate, in contrast, are covered by civil law, which only implies that by entering a contract of mandate, the commissioner commits to perform a special legal action for the principal without any reference to subordination, management, time, and location of order execution, or compensation. Being tied to the Labor Code, contracts of employment stipulate that those workers are entitled to:

• A night shift allowance bonus equal to 20% of the minimum hourly rate wage per hour worked during nighttime
• Paid holidays
• Defined regular hours with set limits after which the employee is entitled to remuneration for overtime
• Guaranteed termination/resignation notice period of 2 weeks up to 3 months, based on the length of employment.

Contracts of employment also include regulations regarding monetary penalties, equal treatment in employment regarding working conditions, assurance of appropriate safety measures including personal protective equipment, and prohibition of excessive work in areas with exposure to heightened harmful factors, as well as mandatory health checks. Contracts of mandate are not required to include any of these standards.

It is illegal to use contracts of mandate in situations where employment relationships meet the above criteria, workers can apply for establishing an employment relationship with the labor court in such instances. Employment contracts should be the preferred option for all workers, as they provide them more protection under the laws and allow for safer worker conditions. However, that is not always the case.

Since Poland joined the European Union, 2+ million Poles currently live throughout Europe, particularly Germany, the Netherlands, Ireland, and the United Kingdom. To fill the domestic labor shortage, thousands of migrant workers from former Soviet Union member states, particularly Ukraine, have found temporary work in Poland – predominantly hired under mandate contracts.

Not unlike migrant workers in other parts of the world, Ukrainian workers in Poland are keen to earn as much as possible in the limited amount of time they spend in Poland– and contracts of mandate, which lack working hour restrictions, remuneration requirements, and minimum notice periods give them this flexibility. However, the unrestricted use of contracts of mandate still poses a risk to brands and retailers sourcing from Poland. According to ELEVATE’s lead auditor in Poland, Zaneta Wyganowska, working hours exceeding 60 hours per week are quite common among workers on contracts of mandate. This is backed up by ELEVATE’s EiQ data, which shows the highest weekly working hours across all audits in Poland have increased from 45h/week in late 2016 to 60 h/week in 2021.

“The problem is that the practice of using contracts of mandate without any stipulation is in line with Polish laws so many companies don’t pay much attention to it – even though it may be a violation of companies’ codes of conduct related to areas such as working hours, discrimination, financial penalties, health, and safety, etc. Furthermore, Ukrainian workers often do not have the knowledge or financial resources to fight the improper use of contracts of mandate. They want to earn money and go back home and not start court battles – which take a lot of time, energy, and knowledge”, says Zaneta.

“In addition, over the past few years, there has been a shift, and contracts of mandate are often no longer used directly by the final assembly facilities that most brands and retailers audit but outsourcing companies and contractors – which many companies do not include in their audit scope”.

In the 1990s, international brands and retailers developed codes of conduct in response to labor and human rights violations in their supply chains to protect workers in countries where labor standards were deemed insufficient or did not exist. While much of the focus has been on sourcing countries in the developing world, codes of conduct should apply globally when local laws do not offer adequate protection to workers and risk assurance to companies – including countries in the European Union.

Furthermore, brands and retailers should ensure that all workers involved in the assembly or processing of their products should be in the scope of their auditing programs – regardless of their contract type. ELEVATE recognizes that assessing conditions for agency, subcontracted, and temporary workers can be challenging due to the availability of personnel records, management staff, and policies and procedures at the final assembly sites. In response, ELEVATE has developed a Labor Agency and Service Provider audit approach to assess conditions of indirectly employed workers.

For more information, please contact info@ELEVATElimited.com

These blogs are written by ELEVATE staff members or associates and the views and opinions expressed are not necessarily those of ELEVATE.