Poland says it will not meet EU milestone to reform “junk contracts”

Keep our news free from ads and paywalls by making a donation to support our work!

Notes from Poland is run by a small editorial team and is published by an independent, non-profit foundation that is funded through donations from our readers. We cannot do what we do without your support.

Poland’s government has confirmed that it will not introduce social insurance contributions on so-called “junk contracts”, despite it being one of the steps agreed with the European Union to unlock funds.

Critics of the current system say that such contracts – which do not provide employment protection, wage protection and the right to holidays – are used by employers to reduce labour costs and that they put employees in precarious positions.

The imposition of mandatory social insurance contributions for specific-task contracts (umowy o dzieło) and mandate contracts (umowy zlecenie) was one of the milestones agreed with Brussels by the former Law and Justice (PiS) government to unlock post-pandemic recovery funds.

📍 Kamień milowy #KPO dotyczący pełnego oskładkowania umów śmieciowych nie będzie realizowany – dowiedział się @Money_pl.
Rząd nastawia się teraz na niełatwe negocjacje z 🇪🇺. Mogą być finansowe konsekwencje.

Piszemy z @grzegorzosiecki.https://t.co/FXL5dUXCii

— Tomasz Żółciak (@tzolciak) November 21, 2024

However, the current government – led by former European Council President Donald Tusk and which replaced PiS in December last year – has decided not to move ahead with the reform, arguing that it will create too great a financial burden for employers.

“This milestone will not be implemented,” cabinet secretary and minister without portfolio Maciej Berek told financial news website Money.pl. “We will not introduce contributions on all civil contracts, including specific-task contracts. The decision has already been made.

Berek argued that imposing “such a solution would burden employers and contractors with about 5-7 billion zloty” in additional costs.

Berek also noted that contracts to carry out specific tasks are often a preferred form of employment in certain sectors, such as the arts and creative industries.

“A specific-task contract in Polish legal conditions can sometimes act as a substitute for employment, but it largely applies to people who do not wish to be employed under an employment contract,” Berek said.

“There are situations where this is entirely justified – when, for example, an artist is commissioned to create a monument or bust, they wouldn’t want a full-time position,” he added.

In 2023, 344,700 people in Poland provided work based on a specific-task contract, data from the Social Insurance Institution (ZUS) shows.

The @EU_Commission has approved payments amounting to €9.4bn for Poland, the largest tranche of money the country has ever received from Brussels.

The funds were previously frozen under the former PiS government due to rule-of-law concerns https://t.co/wkGRkKpeUA

— Notes from Poland 🇵🇱 (@notesfrompoland) November 13, 2024

Berek acknowledged that the decision not to proceed with the reform sets Poland up for a “difficult dialogue” with the European Commission. He said negotiations would focus on maintaining some flexibility in meeting the milestone without overburdening workers or employers.

Money.pl notes that there are certain circumstances in which a country can renegotiate its milestones with the European Commission.

Poland’s funds from the EU’s post-pandemic recovery mechanism were frozen under the PiS government due largely to concerns over the rule of law. This year, billions of euros have been unlocked following the Tusk’s government’s pledges to reverse PiS’s judicial reforms.

Notes from Poland is run by a small editorial team and published by an independent, non-profit foundation that is funded through donations from our readers. We cannot do what we do without your support.