Poland boosts labour inspector powers to curb precarious work

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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.

President Karol Nawrocki has signed into law a government bill giving the National Labour Inspectorate (PIP) powers to reclassify certain freelance and business-to-business (B2B) contracts as standard employment, in a move aimed at reducing precarious work.

The measures to strengthen PIP were one of the milestones agreed with the European Union to unlock billions of euros in post-pandemic recovery funds for Poland, which was required to introduce the reform by the end of June.

However, while he signed the bill into law, Nawrocki also referred it to the Constitutional Tribunal (TK) for assessment, after expressing reservations about the powers now handed to PIP.

The new law allows PIP inspectors to reclassify B2B contracts or so-called “junk contracts” (umowy śmieciowe) as employment contracts (umowy o pracę) when a worker is effectively treated as an employee despite being formally hired as a contractor.

Employment contracts provide stronger protections and benefits, including paid leave and social security coverage, while also imposing greater obligations on employers. By contrast, B2B and junk contracts typically lack such protections.

The changes have been welcomed by PIP and trade unions. But business groups had raised concerns over a proposal requiring firms to pay up to three years of backdated social security contributions if a contractor was reclassified as an employee.

These complaints led Prime Minister Donald Tusk to scrap an earlier version of the bill in January. They were later addressed in the final version, which stipulates that a decision recognising an employment relationship will apply only going forward, not retrospectively, reports legal news service Prawo.pl

When the bill came before the Sejm, the more powerful lower house of parliament, it was approved by all parties from Tusk’s coalition as well as the small left-wing Together (Razem) party.

However, MPs from the national-conservative Law and Justice (PiS), Poland’s main opposition party, mostly abstained from voting, while the far-right Confederation (Konfederacja), another opposition group, voted against the bill.

That had raised the likelihood that Nawrocki, who is aligned with the opposition, would veto the reform, as he has done with a record number of bills passed by parliament.

In an announcement on Thursday, Nawrocki said that his decision had been “difficult”, but he had decided to sign the bill into law while also referring it to the TK for assessment.

The president noted that “the law allows for the release of European funds and it addresses the pathologies of the labour market, practices we all know: forced junk contracts, sham self-employment, and lack of stability”. He said that it could also support young people in securing stable work and starting families.

Nawrocki added, however, that he had “many doubts” about the legislation. “These primarily concerned the lack of proper social dialogue during government work” on the bill, he said. “The state cannot ignore social partners.”

He said that he had held his own consultations with trade unions and employers and, following a recommendation from Poland’s biggest trade union, Solidarity, had decided to sign the bill.

The president also said that a provision allowing court appeals against inspectors’ decisions, which are suspended until a final ruling, had also helped persuade him to sign.

At the same time, Nawrocki said he had serious reservations about parts of the reform, especially those granting the inspectorate what he called “very broad powers” over businesses. “The state must be strong, but it cannot be excessive in its interference,” he said.

Labour minister Agnieszka Dziemianowicz-Bąk, a strong advocate of expanding PIP’s  powers, welcomed the move.

“This is good news for millions of Polish workers. For young people entering the job market, for working parents in need of stability, and for all hard-working Poles who are too often deprived of their rights,” she wrote on X.

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.

Main image credit: Campaign Creators/Unsplash

Alicja Ptak

Alicja Ptak is deputy editor-in-chief of Notes from Poland and a multimedia journalist. She has written for Clean Energy Wire and The Times, and she hosts her own podcast, The Warsaw Wire, on Poland’s economy and energy sector. She previously worked for Reuters.