Poland adopted the law on employee involvement in the European Company (SE) in March 2005.
Employee board-level representation in Poland exists only in publicly-owned and partially privatised companies. Both unions and employers were consulted about the transposition of the directive but there seems to have been no public debate.
Polish legislation provides for employee representatives at supervisory board level in state-owned and partially privatised companies, where the proportion of employee representatives at board level can range from two-fifths, where the state owns the whole company, to around a third, where the state is a minority shareholder. In addition in state-owned operations, which have not yet been transformed into companies, there are “workers councils”, elected by all employees, who can object to management decisions. However, there is no right to employee representatives on the boards of purely private companies and the number of companies where the state is involved is continually declining.
The draft legislation on the transposition of the directive on employee involvement in European companies was presented for consultation to both the main unions and the main employers’ associations, as required by Polish legislation.
There appears to have been no public debate.
Directive was transposed by law in March 2005 some five months after the October 2004 deadline.
The directive on employee involvement in European companies was transposed through legislation passed on 4 March 2005. It included provisions to adapt Polish legislation to accommodate the Regulation on the European Economic Interest Grouping, as well as those relating to the European company. The full title of the legislation is Law of 4 March 2005 on the European Economic Interest Grouping and the European company (Ustawa z dnia 4 marca 2005 r. o europejskim zgrupowaniu interesów gospodarczych i spółce europejskiej). The sections on the European company covered both employee involvement and the changes necessary to adapt Polish company legislation to the Regulation on European companies. The legislation was published in the official journal on 18 April 2005 and it entered into effect one month after its publication.
Special negotiating body (SNB)
Polish SNB members are, in the first instance, chosen by the unions, with direct election by the workforce only if there is no union presence.
Polish SNB members are, in the first instance, appointed by the company’s representative trade union organisation. This can be a part of one of the three national representative union confederations (currently Solidarność, OPZZ or FZZ) – provided it organises at least 7% of employees, or any union – provided it organises at least 10% of employees, or the largest union in the company. If there is no such organisation, in other words, if there is no union, SNB members are elected by a staff meeting (Article 65).
Where there is more than one representative union, the unions should jointly decide who is to be appointed. Where they cannot agree the members are elected by a staff meeting on the basis of lists put forward by the unions. Where the unions do not put forward any candidates, SNB members are still elected by the staff meeting and the legislation does not contain any rules about nominating procedures (Article 65).
If there is an election, it is the responsibility of management to organise it, although the unions should be informed at least 14 days in advance. The vote is by secret ballot and the result is only valid if at least 50% of the employees participate. Where this threshold is not reached, a second ballot is held, which is valid irrespective of the level of participation (Article 66).
Where there are several employers in Poland, seats on the SNB are allocated in proportion to the number of employees involved so that as far as possible there is one member of the SNB from each company covered (Article 68).
External union representatives are specifically permitted to be members of the SNB, although the majority of Polish members must be employees.
The legislation specifically states that the SNB may include union representatives who are not employees of companies involved provided they come from a union which is representative both at the company level (see definition in the section on selection of national members) and at national or regional level. Currently this means representatives from Solidarność, OPZZ or FZZ. But the majority of Polish members in the SNB should be employees (Article 65).
Funding limited to a single expert.
While the Polish legislation states that the SNB can use the assistance of experts of its choice, it limits the obligation on the participating companies to pay for this assistance to the costs of a single expert, unless otherwise agreed by the companies and the SNB (Article 71 and Article 74).
Standard rules under the fallback procedure
Polish members of the SE representative body are chosen in the same way as Polish members of the SNB – by the union, with elections only if there is no union, or they cannot agree. However, unlike in the SNB, external union representatives cannot be members.
Polish members of the SE representative body, known in the Polish legislation as the representative body (Organ przedstawicielski) are chosen largely in the same way as Polish members of the SNB. In other words, they are appointed by the unions, with direct election by the workforce only if there is no union presence, or if there are two or more unions present and they cannot agree. The one difference is that representative body members from Poland must be employees. External union representatives cannot be members of the representative body (Article 90).
The company should bear the costs of the representative body, including one expert, and it should also agree a budget with it, if possible.
The company is obliged to bear the costs of the representative body, including meetings, interpretation, travelling and training, unless something else is agreed with the representative body. This includes the costs of a single expert. However, the Article dealing with the funding of the representative body also states that its budget should be set annually in an agreement between the SE and the representative body. If this budget cannot be agreed, it should be set unilaterally by the company. However, in doing so the company should provide a sum equivalent to three times the average monthly wage for each member to pay for the activities of the representative body. The monthly wage should relate to the sector in which the company is operating and should be the official figures published by the Polish statistical office (Article 106).
Employee representatives at board level from Poland are directly elected by the employees.
Board members who represent Polish employees are directly elected by the employees themselves. The legislation states simply that they “shall be elected by a direct and secret ballot, at general meetings of staff of establishments”. The rules of procedure are not set out in the legislation, but are to be decided on by the establishments themselves (Article 110).
Misuse of procedures and structural change
There should be new negotiations if changes after an SE has been established indicate that the purpose of the SE was to deprive employees of their rights.
The Polish legislation states that if there are “significant changes” after registration, which indicate an intention to “withdraw or reduce” the rights of employees with respect to their involvement then the agreement should be renegotiated with the representative body. The type of changes referred to are changes in the SE’s structure, the number of its employees or its place of registration. In contrast to similar provisions in a number of other countries, the Polish legislation does not limit the period during which such changes must take place for the requirement to renegotiate to apply (Article 120).
The Polish legislation does not provide for renegotiation after structural change, other than where changes are intended to deprive employees of their rights.
There is no automatic right to renegotiate the agreement if there are changes in the structure of the SE, except where these changes indicate that the purpose of establishing the SE was to deprive employees of their full rights to be involved in company decision making (see section on misuse of procedures.)
Unions and employers were consulted on the introduction of the legislation and the unions were generally satisfied with the proposals.
A draft of the legislation was presented to the main union confederations (Solidarność, OPZZ and FZZ), as well as to the main employers’ associations (KPP, PKPP, BCC-ZP and ZRP). The unions are reported to have been broadly satisfied with the draft. The position of the employers is unknown, but there was certainly no significant public debate on the draft legislation.
L. Fulton (2008) Anchoring the European Company in National Law - Country Overviews (online publication, prepared for worker-participation.eu)