Battle looms over labor law

Legislators approved amendments to Poland's labor law last week, opening the way for reduced overtime pay, severance pay and less stringent health and safety procedures. The measures would also allow firms greater freedom to use group layoffs and consecutive temporary employment contracts. The legislation is scheduled to move to the Senate pending further consultation by Sejm committees. Supporters of two labor reform drafts, created by the Democratic Left Alliance (SLD)-led government and added to by the Civic Platform (PO) party, are confident that the measure will become law. But employers fear that the committees - which can alter the legislation before sending it to the Senate - will limit the extent of labor market reform under union pressure. The government urgently wants to amend the law to reduce red tape and labor costs for employers and stem the growth of unemployment, which reached 18.1% in February.

Labor unions opposed But the proposals have already attracted criticism from the Solidarity and All-Poland Trade Alliance (OPZZ) labor unions and are most likely to be rejected before reaching the Senate. "I am concerned that once the drafts reach the committees, the pressure of trade unions and public opinion will lead politicians to withdraw the most important amendments," said Jeremi Mordasewicz, economic expert at the Polish Confederation of Private Employers (PKPP). The amendments drafted by PO add two additional regulations to the cabinet-approved draft, which are aimed at reducing the cost of employee sick leave and are the most eagerly awaited by employers, Mordasewicz said. "Our research shows that the cost of sickness benefits is the most common complaint among companies of between two and 200 employees," Mordasewicz said. "The government draft could be supplemented with the two regulations proposed by PO, which in our opinion would be highly beneficial for the employment market." But while PO is confident that its proposals will pass into law, there is no guarantee that the Sejm committees will be able to reconcile the needs of the jobless and employers with union demands. "There are fears that a lot of MPs will be intimidated, but I hope that reason will prevail and we will manage to liberalize the law and my faction will back it all the way," said Zyta Gilowska, an MP with PO. "I'm sure we will pass the law, although I am not certain what its final form or extent will be. We will try to arrive at the best solution while making every effort to avoid a conflict with the labor unions."

Combatting absenteeism PO wants to reduce sick pay from 80% to 75% of employee wages and to make the first day of a sick leave exempt from sick pay, a measure that would help to combat absenteeism. The party also proposed to allow employers to lay off employees while on sick leave to prevent public-sector and high-income workers and from "escaping" redundancies. "This is very important as absenteeism due to illness is exceptionally high in Poland," Mordasewicz said. "The experience of European Union countries shows that this measure is very successful in reducing the number of short periods of sick leave ... which are very often faked illnesses." Presently firms must pay their employees during the first 35 days of sick leave, after which wages are paid by the state Social Insurance Administration (ZUS). PO proposes that employers should pay for up to seven days of sick leave in every quarter, reducing the risk that small- and medium-sized enterprises will enter cash-flow problems when an employee is sick for a long period of time.