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Financial Participation

Workers’ financial participation schemes are not widespread in Poland. In particular with regard to the incidence of profit-sharing, however, a number of studies have come up with different findings. While according to the European Company Survey and the Annual Economic Survey the incidence of profit-sharing schemes is well below average, the findings of the European Working Conditions Survey show an above-average incidence of profit-sharing schemes.

 

 

Privatization through leveraged lease-buy-outs (LLBOs) dominated the early transition period in Poland.1 By 1995, the direct liquidation method had been used for about 975 out of 1,457 enterprises, representing about 66.9% of all completed privatizations. About 73% of these cases were leveraged lease-buy-outs, which is equivalent to about 48.8% of all Polish companies privatized until mid-1995. In the following period, the situation changed, as the NIF programme was implemented and other methods of direct privatization started to enjoy increasing popularity. By the end of 2001, privatization had been completed in 3.496 enterprises, and only 35% of them were leased companies. The remainder were indirect privatizations (8.8%), firms transferred to the NIFs (14.6%), direct privatizations (other than employee-leased companies; 18.1%) and liquidations (23%). Most of the firms privatized as LLBOs were small or medium-sized firms with less than 500 employees; only 13.8% of enterprises had more than 250 employees (by 31 December 2001).

 

In the period 2000–2007, 185 state-owned companies were privatised using the leveraged lease buy-out method. Privatisation was unsuccessful in just 14 cases, in which companies did not meet their payment commitments, leading to the Ministry of Finance having to terminate the contract. According to the Polish National Audit Office, the resulting employee-owned companies are operating successfully in the wake of privatisation.2

According to the results of the European Company Survey, a survey of more than 27,000 HR managers in Europe conducted in 2009, a mere 7% of private-sector Polish companies with 10 or more employees offer their employees a profit-sharing scheme.3 Compared with other European countries, this is a below-average figure (the 30-country European average is 14%). The prevalence of employee profit-sharing schemes in Poland varies only slightly with increasing company size. 7% of companies with 10-49 employees, 10% with 50-199 employees, and 14% of companies with more than 200 employees have a profit-sharing scheme.4 The survey puts the prevalence of employee share ownership schemes at 4%.

 

 

According to the European Working Conditions Survey (EWCS 2010), based on a questionnaire of employees, the incidence of profit-sharing schemes in Poland is 14.5% and that of employee share ownership 1.6%.5 While Poland is in the top third with regard to the incidence of profit-sharing schemes by European comparison, it is below average with regard to employee share ownership.

 

 

According to the findings of the Annual Economic Survey of Employee Ownership in European Countries in 2012 the incidence of broadly-based participation (employee share ownership) schemes in the country’s largest companies is 13.8% (European average: 53.3%).6

Cooperatives have featured in the Polish economy since the late nineteenth century. Between 1948 and 1990 a significant growth in the number of workers’ cooperatives was recorded and national cooperative associations were created in order to integrate the existing cooperatives into the socialist planning system. Cooperative members were largely deprived of their decision-making rights, as all planning directives came from the associations. Thus, cooperatives had a merely formal character. This is also illustrated by the fact that in December 1988 there were 2,049 cooperatives registered with the Central Association of Workers’ Cooperatives, with 501,400 employees but only 398,100 members. After 1990 the number of workers’ cooperatives members declined rapidly. On 31 December 2001 cooperatives (altogether) were responsible for only 2.9% of total employment and only about 11% of them were worker’s cooperatives.

 

 

Wilke, Maack and Partner (2014) Country reports on Financial Participation in Europe. Prepared for www.worker-participation.eu. Reports first published in 2007 and fully updated in 2014.