President signs off on job protection package

2009-07-31

President Lech Kaczynski on 30 July signed into law a bill designed to protect jobs and help companies amid the economic downturn, first unveiled by the government in June.
The bill, which forms an important part of the government’s economic stimulus package, envisages various incentives and forms of assistance for companies intended to avert mass lay-offs. Some apply to all firms regardless of financial condition. For example, businesses will be able to adjust employees’ working hours flexibly to the level of orders without the need to pay overtime rates, by balancing their working hours over a longer period, up to one year (and not over a week as now) and/or by introducing individual working-day schedules. At the same time, companies experiencing “temporary financial difficulties” – i.e., firms whose orders collapsed by at least 25% y-o-y over three consecutive months between July 2008 and June 2009 – will be allowed to reduce employees’ working hours and wages by up to 50% for up to six months. They will also gain the opportunity to send employees on a special state-subsidised temporary paid leave as production is halted due to lack of orders, again for up to six months; during that time, workers will be paid the equivalent of the statutory minimum wage (currently PLN 1,276 or €281 gross), almost 50% of which will be financed by the government (the equivalent of the jobless benefit, which as of 1 June amounts to PLN 575 or €127 gross). On the other hand, the legislation sets a cap of two years for the maximum duration of definite-term contracts, a change promoted by trade unions.
The changes, which will be in force until the end of 2011, are expected to benefit 60,000 companies and 250,000 workers. The law will come into force two weeks after its publication in the Journal of Laws.

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