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Board-level Representation

There is no right to board-level employee representation in privately owned companies in Poland. However, Polish legislation provides for employee representatives at supervisory board level in companies in the process of being privatised, as well as even greater powers in fully state-owned enterprises.

Poland has undergone a major process of economic restructuring since 1989 with successive governments privatising the bulk of previously state-owned enterprises.

 

The influence of employees at board or management level reflects the different stages that individual enterprises have reached in that process. In general terms, the more privatisation has advanced, the less the extent of employee involvement at board level. However, the government has in the past stated it was considering reducing or eliminating the involvement of employees at board level, even in some companies that are still owned by the state.

 

In enterprises which are entirely state-owned, and where the privatisation process has not started, the 1981 Act on workers’ self-management still applies. This provides for 15-member “workers’ councils”, elected by all employees. All employees have a right to nominate members of the workers council and to vote in the elections. However, only employees who have worked there for at least two years can stand as candidates and members of senior management are excluded. The term of office is two years and individuals may not serve for longer than two terms.

 

These workers councils have substantial powers, at least on paper. These include choosing the manager and the right to object to decisions taken by management – conflicts are solved first through conciliation and then by the labour court. In addition, an assembly of all employees must agree a range of issues, including rules on the operation of the business. However, privatisation and industrial restructuring has greatly reduced the number of companies in this situation and many of those which remain are in severe economic difficulties, substantially reducing the freedom of action for the workers’ councils.[1]

 

The next group of companies are where the process of privatisation has begun. These enterprises have been transformed into companies, but the state remains the sole or majority shareholder – under the Polish terminology, they are known as commercialised companies. In these cases, employees are entitled to two-fifths of the seats on the supervisory board, and in most circumstances, if the company has more than 500 employees, to a member of the management board as well. (The Polish system provides for supervisory boards in public limited companies to oversee the management board, which runs the company on a day-to-day basis.) The employee representatives on the supervisory board  are elected by a secret ballot of all employees. The rules and procedure by which employees choose the member of the management board are determined in the statutes of the company.

 

The final stage in the process of privatisation is where the state still holds some shares but is no longer the majority shareholder. Here the employees are entitled to around one third of the seats – two seats on a board of six, three where the board has seven to 10 members, and four where the board has more than 10 members. The right to a seat on the management board is maintained in these circumstances.

 

Employee members of the supervisory board are protected against dismissal or other forms of disadvantage during their period of office and for one year after that.

 

In all these cases the employee representatives have the same rights as other board members.

 

Employees have no right to seats on the supervisory boards of companies which are entirely in private ownership and in many cases the completion of the privatisation process resulted in the abolition of employee representation at board level.[2]

 

[1] For more details see D. Skupien, ‘Board-level employee participation in Polish limited-liability companies’, in Arbeitnehmerbteiligung in Unternehmensorganen im internationalen Vegleich, ed. G. Loeschnigg, Wien 2011

[2] For more information see, for example, Polish Labour Law: From Communism to Democracy, by M. Sewerynski, Warsaw 1999

L. Fulton (2021) National Industrial Relations, an update (2019-2021). Labour Research Department and ETUI (online publication). Online publication available at http://www.worker-participation.eu/National-Industrial-Relations.