Sunday trading ban not for distribution centers

Entrepreneurs have raised concerns about whether the trading ban will also apply to distribution centers. Application of the Act for distribution centers is not justified by the Act’s wording

The Act on the limitation of trade on Sundays and holidays effectively came into force on March 1, 2018. However, the disputes surrounding the ban still seem far from over. A considerable amount of controversy has arisen following the publication of guidelines for the ban by the National Labour Inspectorate and the Ministry of Family, Labour and Social Policy.

What raised particular concerns was the section of the guidelines which posited that the ban could also be extended to storage facilities (distribution centers) situated in locations separate from stores. Such a broad interpretation of the new regulation has produced criticism of the Ministry and the National Labour Inspectorate. There are concerns that widening the scope of the ban would be unjustly unfavorable for entrepreneurs and businesses.

The Inspectorate assumed in its guidelines that storage facilities are not automatically exempt from the ban solely on the basis of being located separately from the retail area and shared by several stores. It is impossible to agree with this interpretation. It is contrary to the wording of the Act; moreover, it is in contradiction with the intention of the legislator, which was reflected in the course of parliamentary works on the draft of the Act.

First and foremost, in accordance with Article 5 of the Act, the limitation relates only to trading and trade-related activities in a “commercial outlet.” However, according to the Act, a commercial outlet may be understood as a facility where “trade and trade-related activities are carried out.” The use of the conjunction “and” means that a facility needs to undertake both trade and trade-related activities to be subject to the ban. In distribution centers, trade is not carried out; their purpose is to simply organize deliveries to stores. This fact alone means distribution centers cannot be considered “commercial outlets” and therefore cannot be subject to the ban.

What is more, in accordance with the definition of “trade related activities” (indicated in Article 3(3) of the Act), the ban applies only to activities related to trade in a “direct” manner. Activities carried out in a storage facility operating as a distribution center should not be considered activities related to trade in a “direct” manner. In order to qualify an activity as being subject to the ban, there should be a strong connection between such activity and trade in a commercial outlet, in terms of both functionality and time. There is no such connection between activities carried out in a distribution center and the possible subsequent sale of goods in a store.

In addition, the course of parliamentary works on the Act also suggests that the legislator was against a stricter interpretation that would allow the application of the ban to extend to distribution centers. While the preliminary proposal of the Act originally submitted to the Sejm assumed a ban on logistic activities, in the course of parliamentary works logistic activities were deliberately excluded from this ban. The interpretation provided in the guidelines by the National Labour Inspectorate and Ministry is, therefore, clearly contrary to the intentions of the legislator.

A further point of note is also the fact that the Act provides for criminal or administrative-criminal penalties. Regarding the punitive provisions, it is assumed that they cannot be subject to extensive interpretation (meaning such provisions cannot be interpreted in a manner extending the scope of activities subject to the sanctions, over the interpretation resulting from the literary wording of the provision). Therefore, any reference made by the National Labour Inspectorate in the guidelines suggesting it will try to prevent any “circumvention” of the Act, is unjustified. Such an intention cannot lead to imposing a ban, under pain of criminal or administrative-criminal liability, on the activities not explicitly banned under the Act.

Many critics stated that the guidelines published by the National Labour Inspectorate in fact lead to imposing new bans not resulting from the Act itself. It should be noted that the ban resulting from the Act cannot be extended based on the guidelines, because they do not constitute an actual source of law. No bans or obligations for entrepreneurs can be imposed solely by the published guidelines, as the grounds for such bans may only be the Act itself. The guidelines are solely the opinion of the bodies responsible for the implementation and application of the Act on the manner in which they intend to apply the Act.

Of course, an entrepreneur that disagrees with the interpretation presented in the guidelines may call into question the imposition of a fine or penalty by the respective bodies. If that happens, the courts hearing the entrepreneur’s appeal will rule only on the basis of the Act, and Practices will not be, by any means, bound by the guidelines published by the National Labour Inspectorate. On the other hand, it is hard to imagine that the National Labour Inspectorate would question the actions or impose penalties on actions that the guidelines clearly considered acceptable. Taking into consideration that the Act provides for the possibility of imposing penalties of a criminal or quasi-criminal nature, imposing such penalties for actions which in the guidelines are indicated as acceptable would violate the principle of trust in the state. Thus, the guidelines limit entrepreneurs’ uncertainty, at least in relation to some of the activities described therein and considered as permitted. To simplify matters, if the guidelines declare any activity as acceptable, they should be treated as binding for the bodies of the National Labour Inspectorate. But they are not binding for entrepreneurs themselves.

Assuming the understanding of the guidelines presented above, the mere fact that they were published should be considered a good thing, regardless of the controversy related to some of the explanations they provided. It seems that a lot of the confusion surrounding the guidelines could have been avoided if the guidelines contained a disclaimer confirming the lack of binding force of the published guidelines.

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