Warsaw, 27^th July, 2020

 
Position of the Union of Entrepreneurs and Employers on a fair minimum wage

On 4th June 2020, the second stage of consultations with trade unions and employers’ organisations began with ensuring a fair minimum wage for all workers in the European Union in mind. A fair minimum wage is one of the priorities of the European Commission chaired by Ursula von der Leyen. Basing on the outcomes of the consultations’ first stage, the European Commission concluded that there was a need for further action at the EU level. As part of this second phase of the consultations, the Commission seeks to find out what the views of trade unions and employers’ organisations are with regard to the type of instrument that would be most appropriate and its potential goals.

At present, the Commission is considering both the possibility of adopting a directive and non-legislative measures, such as a Council recommendation. In order to justify the need for EU action on the minimum wage, EU institutions refer to the European Pillar of Social Rights (hereinafter EPSR). It is worth stressing, however, that the EPSR is not a legal act, but merely a non-binding political declaration, which some believe is intended to stimulate the development of EU legislative initiatives on social rights. Nonetheless, the provisions of the EPSR themselves exclude this possibility. Section 18 of the EPSR Preamble states clearly that “at Union level, the European Pillar of Social Rights does not entail an extension of the Union’s powers and tasks as conferred by the Treaties. It should be implemented within the limits of those powers”, while Section 19 sets forth that “the establishment of the European Pillar of Social Rights does not affect the right of Member States to define the fundamental principles of their social security systems and manage their public finances, and must not significantly affect the financial equilibrium thereof”. Moreover, as a potential legal basis for a fair minimum wage, the European Commission proposes Art. 153 sec. 1 of the Treaty on the Functioning of the European Union (TFEU), which allows the EU to act in the field of social rights. However, these actions ought to be of the following nature “the Union shall support and complement the activities of the Member States”. Therefore, the Union of Entrepreneurs and Employers is of the opinion that the regulation of the minimum wage remains within the exclusive competence of member states, and that EU instruments referring to these issues should be of a non-binding nature, should they be at all adopted.

In the document providing the basis for the second stage of consultations, the European Commission identified possible options for EU action to ensure a fair minimum wage: establishing a well-functioning collective bargaining system for wage setting; creating a national legal framework to establish and regularly update a statutory minimum rate based on clear and stable rationale; social partners’ real involvement in the process of minimum wage setting; elimination of exceptions allowing for deviation from the application of the minimum wage; creating an effective system for monitoring and enforcing the minimum rate.

When it comes to establishing an efficient collective bargaining system, the EC distinguishes between countries with a statutory minimum wage and countries that set a minimum wage only by means of negotiations with unions. This distinction is a nod to the Scandinavian countries, which have a well-functioning collective bargaining system and fear that minimal harmonisation at the EU level may worsen their standards. Of course, Poland does not belong to this group of countries due to, among other things, an insufficient unionisation. Moreover, the European Commission notes the positive impact of a well-functioning collective bargaining system even on statutory minimum wage systems. Unfortunately, the Commission does not make any specific proposals with regard to how to build or reform such a system, but merely points out that a future instrument may provide a non-exhaustive list of possible actions to support collective bargaining. This proposal is a step in the right direction, as it allows for a more appropriate adaptation of the minimum wage to economic conditions in different sectors and regions. However, this proposal’s main weakness is its lack of precision.

The Commission’s proposals regarding the legal framework for keeping the minimum wage up-to-date, the involvement of social partners, and the minimum wage monitoring and enforcement system do not go beyond the provisions of the Act on the minimum remuneration for work being in force in Poland. The minimum wage is negotiated on a yearly basis within the Social Dialogue Council (hereinafter SDC). By 15th June each year, the Council of Ministers presents to the SDC a proposal of the minimum wage for the following year, considering 10 statutory economic and social premises, and the National Labour Inspectorate monitors compliance with these provisions by entrepreneurs. Owing to this, from the Polish point of view, one may wonder whether such proposals are at all justified. Moreover, it should be also noted that currently six EU countries, namely Sweden, Denmark, Finland, Italy, Austria and Cyprus, do not regulate their minimum rates in a statutory manner. The European Commission claims that the European minimum wage will not force these countries to introduce a statutory minimum wage, but only to introduce clear and stable criteria to the collective bargaining process. Still, taking into consideration the fact that these countries offer a relatively good minimum wage (according to the European Commission), it may be questioned whether the EC’s intervention is necessary in this respect, and consequently whether it adheres to the principles of subsidiarity and proportionality in its activities.

According to the Commission, the above-mentioned measures could contribute to the improvement of working conditions and the standard of living of workers, while keeping jobs and maintaining competitiveness. Improving minimum wage conditions would reduce inequality and poverty among employees. The EC also notes that the exact impact of the Union’s action on the state of affairs in each EU country would be different, reflecting the different characteristics of their minimum wage setting systems, workforce, and economic structures. In an ideal world, raising labour standards would indeed reduce social inequalities. Instead, in its analysis, the Commission forgets to look at the minimum wage from a non-workers’ perspective which in turn raises serious concerns. Namely: employers, avoiding rising labour costs resulting from raising the minimum wage, may force employees to switch to part-time work, which will effectively reduce their remuneration. Rising labour costs will primarily affect the SME sector, which may have a negative effect on the European economy as a whole. Moreover, further increases in the minimum wage may cause the employment contract to become an even greater luxury on the labour market. According to research by The Netherlands Economic Review, the average employment on a basis other than an employment agreement in OECD countries amounts to 11.5%. On the other hand, in Poland, France, Italy, Portugal, Spain and the Netherlands, 21% to 27% of all employees work on the basis of civil law contracts, and this number is constantly growing. The introduction of additional regulations may therefore lead to strengthening of arbitration on the labour market, which – so it would seem – is not consistent with the EU concept of social policy.

The institutions of the European Union are primarily bound by the principle of subsidiarity, i.e. taking the least intrusive, yet effective means to achieve a given goal. Considering the vast discrepancies in the regulations behind the minimum wage in individual member states, establishing even a minimum standard seems to be a difficult task. There is undoubtedly a lot of work to be done in European social policy. However, trying to regulate the minimum wage in a top-down manner seems like somebody is attempting to bite off more than one they chew. To sum up, the Commission’s proposal should be assessed negatively.

 

27.07.2020 Position of the Union of Entrepreneurs and Employers on a fair minimum wage

 

Fot. Bru-nO/pixabay.com

Warsaw, 12^th May 2020

POSITION OF THE UNION OF ENTREPRENEURS AND EMPLOYERS ON
‘A NEW INDUSTRIAL STRATEGY FOR EUROPE’

The Union of Entrepreneurs and Employers hereby presents its opinion to the Communication from the Commission to the European Parliament, the European Council, the Council, the European Economic and Social Committee and the Committee of the Regions titled ‘A New Industrial Strategy for Europe’.

We would like to point out that industry in Europe has been a global leader in economic transformation for centuries. The issues of the modern world, the changing geopolitical conditions, and recently, above all, the ongoing coronavirus epidemic along with the upcoming economic and social changes associated with it constitute the background for the challenges that industry in the European Union must soon face.

The so-called ‘second sector’ accounts for 20% of the EU economy, employs around 35 million people and generates many additional millions of jobs within the Union and beyond. However, its role in the case of Poland is significantly greater. It constitutes about 40% of our domestic economy, and it is here where almost every third Pole finds employment. Henceforth, the provisions in the proposed industrial strategy for the EU are crucial to the further development of our country, even more so in the upcoming recession.

We concur that “We now need a new industrial way for Europe, fit for the ambitions of today and the realities of tomorrow”. The road to achieve this goal must not, however, translate into industry’s further regulation, such as imposing new legal requirements, restrictions, fees or taxes for the second sector. For centuries, it has been the unhindered opportunity to conduct industrial activity that constituted the basis for innovation and fostering change on a global scale by European industrial plants. Sole legislation itself has never led any country to fortune and wealth.

While in the provisions of ‘A New Industrial Strategy for Europe’, it is written: “We need a European industrial policy based on competition, open markets, world-leading research and technologies and a strong single market which brings down barriers and cuts red tape. And we must resist the simplistic temptations that come with protectionism or market distortions (…)”, many of the further provisions raise concerns about the planned shape of industrial policy through numerous legal regulations determined at a European level.

The issue of social standards also found its place in the document. The European Commission notes that “Thanks to Europe’s social market economy, economic growth goes hand-in-hand with improved social and living standards and good working conditions. The European Pillar of Social Rights will continue to be our compass and ensure the twin transitions are socially fair”. However, these issues must not mean that, with the help of subjective solutions, justified by social arguments, entrepreneurs from selected EU member states are eliminated from the common market. Such practice was introduced during the works on the Mobility Package in recent years.

The Commission also stresses that “Faced with these headwinds, Europe’s response cannot be to erect more barriers, shield uncompetitive industries”. However, the notion of ‘an uncompetitive industry’ must not be attributed to those sectors that have lost their competitiveness due to the introduction of administrative fees, taxes or regulatory requirements that result from international agreements or European law.

‘A New Industrial Strategy for Europe’ focuses largely on two sectors: energy and the digital industry.

The experts of the Union of Entrepreneurs and Employers have begun working with the Polish industry to develop the Polish Energy Strategy, which is currently undergoing an update process. We are aware that there will be a reversal of the roles of individual generation sources and takeover of main work by distributed sources, while conventional energy from coal should in Poland gradually take over the role of a guarantor of electricity supply. Any and all changes in this matter, however, ought to be spread over a substantially long period to allow Polish industry to adapt to new norms and standards. The Just Transition Fund may be an interesting tool to support the Polish energy transformation, but it certainly will not be the primary source of its financing. Poland will still have to use other sources of financial aid from the EU and will also have to mobilise significant resources on its own. This issue had already been the subject of a commentary by the Union on 28^th January 2020.

We are already following all attempts to introduce norms in the field of renewable energy, aiming to properly regulate the issues related to the investment process, for instance, in onshore wind farms, with both attention and approval.

Digital technology issues have found an exceptionally important place in the industrial strategy. We agree that this area plays and will play an extraordinary role during the crisis associated with the COVID-19 epidemic, as well as in many years to come. It may also become one of the pillars of economic recovery after the crisis caused by the coronavirus pandemic.

Furthermore, the policies of individual member states and the European Commission should therefore be primarily designed to guarantee entrepreneurs a stable and predictable regulatory environment and a level playing field for all participants of the digital ecosystem. Likewise, the highest possible allocation of funds for digital development within the nearest EU financial perspective seems to be a top priority.

What raises our concerns are the emerging voices regarding the introduction of the so-called digital tax. The Union of Entrepreneurs and Employers has consistently pointed out that digital services boost the competitiveness of the SME sector due to digitisation, and thus, among other things, increased working efficiency and widened access to new markets. The unilateral imposition of a digital tax on European companies, in the absence of such a tax in other parts of the world, will negatively impact the competitiveness of Polish and European companies against entrepreneurs from outside the European Union, for example, from the US, China or India.

European industry has to be innovative to be competitive. To meet this condition, it must have access to the most modern telecommunications infrastructure possible. Therefore, it is vital to implement the 5G standard quickly and efficiently so that our continent does not lag behind. The current situation forced by the COVID-19 epidemic shows the importance of digitising both the economy and solutions for citizens, including health care, education and digital offices. The availability of infrastructure for the purposes of industry must therefore go hand in hand with a set of online public services.

We would also wish to highlight the fact that intellectual property action plans stipulating an assessment of the need to update the legal framework, ensuring intelligent use of intellectual property and a more effective fight against intellectual property theft, must not pose a threat to competitiveness resulting in the exclusion of innovative business models and the reduction of opportunities for European SMEs to compete globally. Further regulations for European entities will not improve their competitiveness.

The magnitude of changes that may take place as a consequence of the forthcoming economic crisis might shift the prospect of implementation and revise their significance in case of numerous provisions postulated in ‘A New Industrial Strategy for Europe’. Hence, they should be analysed carefully and thoroughly by social partners and public institutions.

Union of Entrepreneurs and Employers

 

12.05.2020 Position of the Union of Entrepreneurs and Employers on ‘A New Industrial Strategy for Europe’

 

fot. Giampaolo Squarcina / ma lic. Flickr.com

Warsaw, 20^th May 2020

THE PANDEMIC AS AN OPPORTUNITY FOR WIDESPREAD AND FAST INTERNET IN POLAND

The fundamental conclusions from the report published today by the Union of Entrepreneurs and Employers are that, in order to develop the Internet infrastructure in Poland, we need stable regulations, a level playing field for all ecosystem participants, further flexibility of environmental and construction regulations, as well as financial stimuli encouraging investment in infrastructure.

The coronavirus pandemic has affected virtually all sectors of the economy and has already generated a number of contradictory diagnoses. One thing can be said for sure: it has sparked a dynamic increase in network traffic. In mere weeks, the vast majority of aspects of the functioning of many people has been transferred to the virtual world. Economic and social life never stopped, as Internet managed to multiply its traffic capabilities by several dozen percent. As part of the changes caused by the epidemic will be of a permanent character, the bandwidth of the mobile infrastructure is slowly becoming insufficient, similarly to the level of penetration of high-speed optical fibre in our country.

“We must consider this situation an opportunity, not at all a threat, and create the best Internet infrastructure in Europe, which will then become our competitive advantage. The pandemic showed us that without the Internet, the economy actually has no future,” says Cezary Kaźmierczak, President of the Union of Entrepreneurs and Employers. “This predicament has a number of consequences. Unless we have a sufficiently efficient telecommunications infrastructure, we will be developing at a much slower pace than our potential would suggest. Unless the coverage of the country’s surface with this infrastructure is satisfactory, many people will become vulnerable to exclusion. Therefore, our basic postulate is as follows: let’s do our level best to provide Poles with a universal access to high-speed Internet.”

Our starting point for further infrastructure development is rather specific. On the one hand, we passed the exam related to the increase in network traffic with flying colours; on the other, in the ESMI ranking which analyses the society’s level of digitisation, Poland is systematically placed on one of the last slots in Europe. Access to fibre optic connections is improving, but is still deficient, while the record number of subscribers to mobile broadband services is depleting the capacity of existing infrastructure. Furthermore, Poland must efficiently implement the new mobile network standard, that is 5G, which will require additional infrastructure expenditure. Consequently, the Union’s experts prepared a set of recommendations for the development of the telecommunications infrastructure in Poland.

“We presented a number of recommendations specific to the telecommunications infrastructure in our report, but as to their essence, they do not differ from general recommendations for stimulating investment,” claims Jakub Bińkowski, Director of the Union’s Department of Law and Legislation. “Therefore, they basically boil down to securing competitiveness within the market, ensuring basic predictability of regulations, simplifying and making procedures more flexible, as well as making a financial effort as an impulse for new investments.”

The experts of the Union of Entrepreneurs and Employers emphasise that in recent years a number of activities to develop the Polish infrastructure has already been undertaken, for instance, as part of the “mega-act” or from mobilising funds from the Operational Program “Polska Cyfrowa”, which stands for ‘Digital Poland’. Nevertheless from the point of view of the scale of the challenge facing Poland, additional efforts are necessary.

“We were the first to call for the exemption of the SME sector from Social Insurance Institution premiums, we were also the first to demand liquidity substitution for Polish companies and later to restart economic activity. Now we are the first to call for reconstruction of the economy and taking advantage of the crisis as an opportunity to make a civilisation leap,” concluded Cezary Kaźmierczak. “The Internet is a key instrument in this respect.”

The Union of Entrepreneurs and Employers announced that in the foreseeable future, the organisation will publish a report on how to utilise the infrastructure at hand in both the public and private sectors.

The project was prepared by the following Consortium:

• Andrzej Arendarski, Polish Chamber of Commerce (Krajowa Izba Gospodarcza)
• Maciej Bukowski, WISE Europa Institute
• Cezary Kaźmierczak, Union of Entrepreneurs and Employers (Związek Przedsiębiorców i Pracodawców)
• Agnieszka Plencler, Consumers Forum Foundation (Fundacja Forum Konsumentów)
• Bartłomiej Radziejewski, New Confederation (Nowa Konfederacja)
• Marcin Roszkowski, Jagiellonian Institute (Instytut Jagielloński)
• Marzena Rudnicka, National Institute of Senior Economy (Krajowy Instytut Gospodarki Senioralnej)
• Andrzej Sadowski, Adam Smith Research Center (Centrum im. Adama Smitha)
• Tomasz Wróblewski, Warsaw Enterprise Institute

 

20.05.2020 The post-Covid-19 crisis Economic Recovery Plan: 2^nd Pillar – Unrestricted access to high-speed Internet (Infrastructure)

Warsaw, 14^th May 2020

COMMENTARY OF THE UNION OF ENTREPRENEURS AND EMPLOYERS
REGARDING PLASTIC TAX PROPOSALS

The Union of Entrepreneurs and Employers has consistently opposed the introduction of any levies of sectoral and selective character. We believe that the one of the characteristics of the tax system should be it being universal, as it makes tax collection much easier, it is executed on a more efficient basis and it is cheaper to collect on a uniform ground from a large group of entities rather than from many groups of entities according to different rules. With this in mind, we evaluate negatively all kinds of proposals aimed at introducing a tax on plastic products, especially if it should take place during a difficult crisis due to the ongoing pandemic.

According to the information broadcast and published yesterday by the media, a proposal to supplement the provisions of the next “anti-crisis shield” with a new tax on plastic products in which the content of recycled plastic is less than 30% had been introduced in the public debate. The position of the Union of Entrepreneurs and Employers in this regard is clear. There can be no doubt that Poland must shape its own model for adapting to the Green New Deal, which is becoming one of the major policies pursued by the European Union. Achieving higher recycling levels and reducing waste disposal levels is a must. However, we believe that Poland’s path to a circular economy must not be based on fiscal tools. The fundamental condition for implementing the assumptions determined at the level of the European Union is the construction of an efficient and well-functioning waste management system, taking into account the extended responsibility of the producer.

Our position in this matter is unwavering, as the entire Polish economy is currently going through a very difficult period. The coronavirus pandemic indeed forced many industries to cease operations, while in case of others, it has resulted in a decline in revenues and disruption of supply chains. Any and all legislative interventions aimed at relieving entrepreneurs at this time ought to be appreciated; however, proposals that seek to improve the operating conditions of entrepreneurs in a given industry at the expense of other market participants are unacceptable. The legislator’s efforts during this period should focus on deregulation, simplifying procedures and minimising bureaucratic and administrative obligations. We believe that the introduction of additional taxes in a time of crisis is unjustified and harmful, especially if it were to be done as part of a package of laws whose declared objective is to protect businesses against the negative effects of the COVID-19 epidemic.

The Green New Deal speaks of a reality to which the Polish economy will have to adapt. Obviously, this will require effort on the part of both the regulator and market participants. The first-order goal at the moment should be the creation of an efficient and effective waste management system along with the implementation of a model of extended producer’s responsibility in line with the requirements laid down in EU directives. All types of levies imposed selectively on specific products or industries lead to an increase in the level of complexity of the tax system. Moreover, taxes should, in principle, fulfil a fiscal function, that is provide funds for the execution of the state’s basic tasks; attempts to achieve other goals by means of the tools within the tax system lead to disturbances in the economy and are usually of low efficiency. Therefore, we clearly oppose the proposals to introduce “a plastic tax” – we evaluate negatively both the concept itself and the idea of its introduction in such extraordinary conditions.

14.05.2020 Commentary of the Union of Entrepreneurs and Employers regarding plastic tax proposals

Warsaw, 9^th June 2020

The Union celebrates its 10 years

Ten years of operations of the Union of Entrepreneurs and Employers coincides with the most dynamic period of economic development in the history of Poland. Small and medium-sized companies are responsible for 51% of Poland’s economic growth after 2010. Nowadays, SMEs account for 99.8% of all entities conducting business activity, employ 68.7% of the total number of people employed, and together represent 10 million voters.

It is no wonder then that the number of institutions and politicians who feel they are the fathers of SME’s success is increasing so quickly.

Back when we were starting, there were only five of us and we only needed a couple of rooms is an attic. In the minds of various officials, but also many Poles, the stereotype dating back to the Polish People’s Republic regarding private owners, small producers, slyboots and dodgers was still commonplace. They were treated as such in the offices whenever they wanted to start a business or demanded equal treatment by the tax office.

Ten years ago, we were convinced that this was a one-year project. We believed that this long was enough to inform politicians about the disproportionate rules and taxes imposed on entrepreneurs and what privileges corporations enjoy, and as a result to change it. We thought it was enough to indicate some good practices, and that politicians hand-in-hand with officials would introduce and implement them themselves. We were wrong about how much time we would need, nevertheless we were able to fix a number of important matters over the years. And there’s still more to come. We are constantly trying to explain the importance of repairing the legal and institutional environment to the authorities both in Warsaw and Brussels, where we were forced to open an additional office.

Today, the Union of Entrepreneurs and Employers represents 51,889 companies associated in 14 regional and 20 industry organisations. Our member-companies employ 576,917 people.

A thriving small and medium-sized enterprise sector is really the only common denominator of all the world’s most developed economies. It doesn’t matter if their competitive advantages result from new technologies, a powerful financial sector or production capacity, they all rely on an extensive and flexible network of small and medium-sized companies.

Poland today has found itself in a place of historical opportunity. The stabilisation of the labour market and where we will be placed within the pyramid of global prosperity will largely depend on how we shape our financial and economic policies in this very moment. Just like 10 years ago, so today it does seem to us that we only need a few globally proven legal and institutional solutions to put Poland on the fast track to the top of the most developed countries in the world. To our members – the terrific people who every day drive our economy further and who granted our nation prosperity and a quality of life incomparable to anything that had ever been achieved in Poland before – we wish high spirits, further development and many successes.

The Union of Entrepreneurs and Employers

 

P.S. Today, in the courtyard of the former Central Committee of the Polish United Workers’ Party, celebrations were to be held on the occasion of the 10^th anniversary of the founding of the Union. For reasons known to everyone, they were postponed until December 3^rd later this year. We are really looking forward to it.

 

See the video: 10 years of the Union of Entrepreneurs and Employers in 10 minutes

Warsaw, 5^th May 2020

Union presents the post-Covid-19 crisis Economic Recovery Plan

The Union of Entrepreneurs and Employers commences a series of publications called “The post-Covid-19 crisis Economic Recovery Plan”. In the coming weeks, the Union will present a programme of thorough reforms of economic law, tax system, pension system, judiciary, labour market, ensuring universal Internet access and a plan to tackle demographic problems.

In the 1^st pillar published today, the Union’s experts presented quick-win point solutions, the implementation of which will quickly improve the legal environment for companies in Poland. The 16 point recommendations by the Union include recommendations on ensuring stability and predictability of the law, an appeal to put on hold the plans for raising the minimum wage, a withdrawal from changes in non-interest consumer credit costs, the widespread implementation of cash accounting, limiting the use of sectoral taxes, repealing the law on trade restrictions on Sundays, increasing the tax exempt amount, shortening the time for issuing administrative decisions, enabling distance sales of prescription drugs or providing access to public databases, and further development of state administration digitalisation.

“The quick-win solutions presented in the 1^st pillar, unlike the subsequent chapters planned, are of a technical nature. They do not require any thorough system reforms. The implementation of the presented solutions is also non-critical in terms of public debate. Their implementation is a quick win for all stakeholders,” says Piotr Palutkiewicz, Secretary of the Union’s Department of Law and Legislation.

Cezary Kaźmierczak, the President of the Union, comments: “The current crisis will probably find its place in history textbooks. The most important thing is that these times are referred to as a breakthrough period, after which our country advanced to higher places in rankings that assess the standard of living, economic development, personal freedom or internal and external security. Every effort should be undertaken to ensure that 2020 is not recorded as the point at which the 30-year-long period of Poland’s reconstruction came to a halt. Therefore, this time should be used to carry out thorough reforms in numerous areas”.

In its report, the Union states that in the face of the ongoing economic crisis related to the COVID-19 epidemic, it is also necessary to “unfreeze” as soon as possible all the sectors of the economy whose operations were restricted by the government’s administrative decisions.

“There is no doubt that having lifted most current restrictions, the economy, society, and politics will start functioning in theirs new reality. We will be witnessing economic changes, the birth of new models of functioning in society and culture, as well as novel use of technology. We will perceive health or ecological issues in a different light,” the Union’s experts write in the report. “The global coronavirus crisis is and will be a time of reviewing the current models and patterns of functioning of each area of life that we have known so far”.

“That is why the government must start implementing bold reforms that will adapt the law to the new economic and social realities. In the weeks to come, we will be presenting our solutions .” – sums up Cezary Kaźmierczak.

05.05.2020 The post-Covid-19 crisis Economic Recovery Plan: 1^st Pillar – Point Solutions – quick win

 

Fot. geralt / pixabay.com

Warsaw, 22^nd April 2020

 

Union on 5G: a massive opportunity for the Polish economy, a condition for the development of Industry 4.0, a necessity in the face of changes sparked by the pandemic

Technological progress, increased demand for digital services, and ultimately lasting changes in socio-economic life caused by the coronavirus pandemic – these are the main circumstances affecting the reality that 5G is not only a chance for Poland to accelerate its pace of economic development, but even as much as a necessity. To take full advantage of the available opportunities, we must launch this technology efficiently, quickly, and safely – these are the basic conclusions from the report by the Union of Entrepreneurs and Employers on the opportunities and prospects associated with the implementation of 5G in Poland.

It is an undoubted fact that an increasing share of social and economic activity is being moved to the Internet. Of the 4.5 billion people online, as many as 300 million have used the web for the first time in the past year, so virtual traffic is getting increasingly heavy. Network usage patterns are also changing. While in 2010, less than 40% of mobile phone users in the United States used them to browse the Internet, it is estimated that 75% of Internet users will only browse it using smartphones by 2025. In light of such a dynamically increasing demand, it is hardly surprising that the technologies available today are slowly exhausting their possibilities. Moreover, Internet users expect progressively newer and more widely available services, whereas the industry is constantly moving towards digitisation and automation. Ultimately, the coronavirus pandemic sparked changes in job models and leisure time activities alike, which further increased network traffic. The implementation of the 5G standard seems to be the answer to all the above challenges.

“What the coronavirus has caused is that we spend significantly more time at home,” says Cezary Kaźmierczak, President of the Union. “Regardless of whether we watch TV series during this time or participate in business video conferences, we contribute to the increase of network traffic.

Due to its technical parameters, the 5G network will enable the development of new services and products that will substantially change the economic life in Poland. Autonomous vehicles, the Internet of Things, augmented or virtual reality, remote production management – the widespread use of these possibilities, which make up the concepts of Industry 4.0 or the “fourth industrial revolution” announced in the past, will not be possible without the capacities guaranteed by the 5G technology.

“The Strategy for Responsible Development is a document which clearly outlines the desired direction of the Polish economy’s development,” says Jakub Bińkowski, Director of the Department of Law and Legislation of the Union of Entrepreneurs and Employers. “Our economy is to become one that is knowledge-based with high added value. Achieving this goal without the efficient implementation of the 5G network seems impossible”.

The Union’s experts emphasise in their report that swift action is essential. Other countries (both in Europe and Asia) have already undertaken important steps. The race for 5G is a global one. Therefore, we ought to focus on implementing this standard in an effective, fast, and secure manner. According to the authors of the report, to achieve this, it is necessary to ensure free competition as part of the selection of infrastructure providers, as well as to set restrictive technical security standards and to protect the system against dependence on one supplier.

“It is an obvious fact that 5G is a very big chance, but in the current situation, it already is a necessity to commence implementing this standard quickly. Universal access to high-speed Internet along with enabling entrepreneurs and consumers to use services based on the latest technologies is a prerequisite of our further development,” summarises Cezary Kaźmierczak.

 

22.04.2020 Report by the Union of Entrepreneurs and Employers: Implementation of the 5G technology in Poland – prospects and opportunities

 

Fot. geralt/pixabay.com

Warsaw, 8^th April 2020

POSITION OF THE UNION OF ENTREPRENEURS AND EMPLOYERS
ON THE “FINANCIAL SHIELD FOR COMPANIES”

From the very beginning of the crisis caused by the coronavirus pandemic, the Union of Entrepreneurs and Employers has emphasised the need to rapidly launch a programme to secure the liquidity of Polish companies. A significant number of entities has the ability to operate for a certain time without profits, however, deepened liquidity problems may lead to a real wave of bankruptcies. This would translate into an economic calamity, the loss of hundreds of thousands (if not millions) of jobs, and the years of unprecedented economic growth and development in Poland going to waste. We are glad that an effort was undertaken to introduce a quick and simple tool to support the financial liquidity of companies.

According to the information presented during the Prime Minister’s press conference, Polish companies are to receive as much as PLN 100 billion (4.5% of GDP) of direct financing within a very short time, of which as much as PLN 75 billion will be allocated to the SME sector. The limit of funds earmarked for a single company depends on its size category – micro-companies can get a maximum of PLN 324,000, while small and medium ones approximately up to PLN 3.5 million. Aid for companies from the SME sector is to take the form of simple subsidies paid through banks. Meanwhile, large companies can obtain loans or bonds worth up to PLN 1 billion.

According to the official communiqués, the allocation mechanism is to be simplified to the highest possible extent and based on statements. This declaration is all the more pleasing, because the liquidity support measures proposed so far as part of the ‘anti-crisis shield’ were unfortunately encapsulated with too complicated formal procedures and requirements. Declarations on the simplicity of introduced solutions seem to be confirmed by a very transparent catalogue of criteria for providing support. The prerequisite is that revenues fall by at least 25% compared to the previous month or the corresponding month of the previous year. Furthermore, this financial aid is to be granted to those entities which were banned from operating due to sanitary restrictions. In the case of large entities, financing is to be granted on more individualised terms, under which, for example, the payment of taxes in Poland should also be taken into account.

The support scheme also has a simple structure in terms of organisation. Financing for the SME sector is to be distributed through commercial banks in the most digitised way possible. Large companies are to be attended to directly by the Polish Development Fund. Financing will be granted on the basis of simple collateral, e.g. promissory note, and the funds may be allocated to cover the costs of conducting business, in particular employee remuneration.

According to the mechanism presented, part of the support provided is to be non-refundable. Micro-enterprises can count on the write-off of 75% of their receivables if they continue to operate and maintain average employment within a year of obtaining funds. In the case of small and medium-sized enterprises, a 50% write-off depends on these conditions, and an additional 25% may result from the loss on sales incurred by the company.

As already highlighted, large companies are to be subject to a different financing regime: they can count on loans on preferential terms, partly non-refundable, bonds or investment financing in the form of taking up shares or stocks.

The presented package of financial support for companies seems to be adequate to the level of threat resulting from the coronavirus pandemic. Companies impatiently awaited a similar project, and the Union of Entrepreneurs and Employers in almost every subsequent publication stressed the need to quickly introduce such a tool. We are glad that our voice has been heard. We trust that with this bold move the government has a chance to save many jobs and companies. Perhaps this will allow Poland to go through the crisis with dry feet (as the Polish saying goes), which would undoubtedly be a great achievement.

 

08.04.2020 Position of the Union of Entrepreneurs and Employers on the financial shield for companies

 

Fot. _Alicja_ / pixabay.com

Warsaw, 8^th April 2020

 

APPEAL TO THE GOVERNMENT FOR A SAFE RETURN TO WORK

 

The government must immediately expand the Anti-Crisis Shield with a consistent return to work programme. Without this, Poland will not only waste the money allocated for financial support, but also the achievements of a whole generation of Poles.

• The Anti-Crisis Shield must be armed with an economic recovery program,

• PLN 220 billion in aid for enterprises at risk,

• The Danish company reactivation programme possible to implement in Poland.

The Polish government, following in the footsteps of other countries, adopted an anti-crisis package designed to protect companies and their employees from the effects of the coronavirus epidemic. The program, however, has many shortcomings and is insufficient, which is why Poland is in need of the Anti-Crisis Shield Part 2. We consider it essential to exempt all SME operations from social contributions for 3 months and to introduce a liquidity package launched for all companies on a promissory note up to 15% of their last year’s turnover (guaranteed by the National Bank of the Republic of Poland – NBP). All this should and can be financed by debt and giving up new social programs (except for 500+ programme for the second+ child).

Nevertheless, current (and future) programmes will accomplish nothing unless we go back to work. The state has no money of its own and will not last long cut off from tax revenues. Taxes do not pay themselves. Taxes are paid by working people and companies. We have to get back to work. Otherwise we will go bankrupt – regardless of the taxes that will be invented and imposed and the declared aid programmes for companies and employees.

We are risking to lose 30 years of development of Poland.

We appreciate the efforts and openness of the government, but a plan without a strategy to get out of the crisis is not a plan, but just an ad hoc defence tactic. The crisis will not end on the same day the epidemic is over, but on the day most Poles return to work and companies will be able to function relatively normally. That is why we need a roadmap, a comprehensive programme to outline the steps we need to take to resume our companies’ operations and provide jobs for people who are uncertain of what tomorrow brings. We are aware that nothing happens overnight. We know that it is difficult to predict how the epidemic will develop, but the uncertainty and lack of perspective will kill many more companies than it would appear from a simple balance sheet of losses.

Entrepreneurs need an approximate time frame, and if not a time frame, then conditions in which they can wake their companies up from a state of lethargy. Just as we plan sickness and death curves, we should also plan a return-to-work curve. At what variables can we consider re-opening a company? This way, we will create a chart that will not only tell us how many people have died and how much our situation deteriorates daily, but will also give us some prospects of getting out of this economic struggle. For entrepreneurs facing today the decision whether to dismiss employees or fight for survival, this could be information saving hundreds of thousands of jobs and sustaining hope for normalcy – the most scarce product in stock nowadays.

Denmark can serve as an example in this case. A country which, just like Poland, took the threat of the epidemic very seriously. A few hours before Poland, all Danish borders, kindergartens, schools and most of the activities that were associated with direct contact of people were closed and shut down. Today, in the same spirit of responsibility, their government is preparing to gradually lift restrictions and reopen companies.

The Danish anti-crisis programme was thoroughly thought out and focused on the protection of critical social fabric, which is the relationship between the employee and the employer. The Danish government acted faster than its Polish counterpart, more aggressively and on an incomparably larger scale in terms of both the scale of financial support and the introduction of restrictions and bans. They were successful. Employees kept their jobs, the virus is wasting away. Now the most pressing issue is for companies to start earning money again. Otherwise, all the help will be in vain.

The return-to-work programme must be an integral part of the Anti-Crisis Shield. The billions we have spent and will spend on protecting Polish employees will last for a few weeks. After Easter, we will be back in the same place, only poorer for the money spent. Unless we resume economic activity, 10% our GDP will go down the drain. No economic profits, only political losses for those who promised stability.

While maintaining the necessary flexibility and observing all security measures, we should reverse the current thinking pattern and restrict economic activities only of those companies that under no circumstances can reopen. Others, as long as they are able to keep adequate security measures in place, should be allowed to gradually resume their operations. Since most grocery stores have learnt to operate under these difficult conditions, most offices and institutions can certainly open up, not to mention services where customer contact is much more limited.

We consider the accusation of putting the companies’ interests above the safety and lives of Poles particularly cynical and unsuccessful. Poles, like the Danes, as Prime Minister Helle-Thorning-Schmidt said, will never be safe locked up in their homes if they have nothing to return to. This, of course, applies to all of us, though not to an equal degree. People and companies directly affected by the obligation to keep distances, limited direct contacts, travel bans, and border closures suffer the most from this downtime. The vast majority of these are small and medium-sized transport companies, restaurants, workshops, beauty salons, sales salons, the clothing industry, hairdressers, service outlets and hundreds of others. A total of 10 million people who cannot rely on a fixed salary or government jobs. But if we don’t go back to work, the latter group may not be there soon either.

OECD estimates show that four weeks of paralysis of the Polish economy equals 28% our annual national income. Each subsequent week is a shift back in time to the age of double-digit unemployment, the pauperisation of a significant part of society and the wasted opportunities of the next generation of young people. The virus will eventually be defeated and the vast majority of the population will never even be at high risk. Most will learn to minimise the risks. The recession, however, will remain in the public memory for all time as a symbol of the rule of current political formation.

The Union of Entrepreneurs and Employers

 

Appeal to the Government for a safe return to work

 

Fot. Free-Photos / pixabay.com

Warsaw, 10^th April 2020

 

#ReturningToWork
Actions to prevent and curtail the pandemic in the production sector

 

Yesterday, the Union of Entrepreneurs and Employers presented a plan of going back to work for the entire economy and in particular for those industries, whose activity was limited due to government restrictions.

The Union calls for the immediate implementation of the plan how the Polish people can return to work. The wealthiest countries of the European Union have already planned to gradually lift restrictions and resume the economy after Easter. OECD data show that losses in Poland resulting from the lockdown can reach as much as 28% of Poland’s GDP. This would be one of the worst results among developed countries. If Poles do not return to work immediately, then both Anti-Crisis Shields and the billions of zloty to stimulate the economy will be wasted. We simply cannot afford that outcome.

Herein, we present you the recommendations of the Union for the industrial production sector in the field of counteracting CODIV-19 infection. The study is based on experience and proven practices implemented worldwide by Procter&Gamble.

Each enterprise and management board, most familiar with the realities within their companies, will find adequate solutions and recommendations that will help them increase employee safety and significantly reduce the risk of coronavirus infection.

We recommend making use of the following solutions beginning today:

1. Conducting regular information campaigns for employees and external companies – via e-mail, TV screens, boards on the fence; sound system outside the facilities to relay police communiqués.

2. Separating parts of production facilities to eliminate contact between employees.

3. Division of factory employees from individual shifts into several teams – each team starts and finishes work on individualised times, separate places where employees are waiting for work to start.

4. Separate work entrance and exit to eliminate the possibility of contact between employees from various teams.

5. Implementation of a new entry/exit system for temporary employment agency employees to eliminate people grouping before entering the company premises.

6. Implementation of additional security at production lines workstations.

7. Public transport: change in the organisation of bus stops and bus timetables; implementation of buses dedicated only to individual teams.

8. Limiting the number of people staying in common areas in order to ensure adequate distance (e.g. staff canteen, breakfast rooms, smoking room).

9. Providing a dedicated breakfast room and toilet for each department.

10. Introduction of a contactless thermometer measurement, followed by a thermal imaging camera measurement.

11. Limiting the number of guests entering facility grounds only to necessary visits and monitoring them (introducing the medical self-assessment procedure and measuring the temperature with a non-contact thermometer in installed booths).

12. Introduction of a procedure that minimises the contact of lorry drivers in distribution centres with security and cleaning crew (e.g. distance 1.5 m, installation of booths, hand disinfection after each contact with documents, disposable gloves for drivers, separate waiting areas for drivers).

13. Installation of intercoms in all security booths on the factory premises, at the parcel pickup point and in the mail room to allow contact without the need for direct interaction, all shipments delivered at only one central pickup point.

14. Providing means for disinfecting individual work places (implemented schedule with a list of points for disinfection before starting work – on production sites and in offices). Increased cleaning frequency, regularly wiped handrails, elevator buttons and other common areas.

15. Increasing the number of stations with disinfectant and the number of dispensers with paper towels in toilets (replacing dryers with paper towels).

16. Change of all meetings to remote mode.

17. Implementation of a home office policy for employees who are able to work from home.

18. Support for employees in terms of childcare in case of schoolchildren.

19. Limitation of meetings and gatherings – implementation of the minimum 1.5 meter distance principle between employees implemented (e.g. in assembly places waiting for work to start, visual markings for places where employees should stand) introduced.

20. Introduction of the rule: giving up handshake greetings.

21. Cancellation of meetings and trainings along with implementation of online trainings where necessary.

22. Introduction of an employee canteen schedule and a change in the rules of serving meals: elimination of cash payments, introducing ready-made foiled sets, replacing salt and pepper shakers with sachets.

23. Change of work rules, e.g. administration personnel: implementation of remote assistance.

24. Limiting business trips.

25. Daily virtual meetings with business partners to ensure they implement the same procedures and keep you updated on all changes and processes.

26. Change in the rules of functioning of company stores: closing a stationary store and enabling home delivery for employees.

27. Securing the right number of protective masks for employees and training in the use of masks.

28. Development of a procedure for the event of a suspected infectious disease shared with all managers as well as setting up a separated isolation room.

29. Replacement of furniture with models enabling rapid disinfection.

30. Additional disinfection stations in drivers’ rooms and warehouses; employees are prohibited from using the toilets and showers for drivers; minimising contact with drivers (delivery documentation provided by e-mail, drivers’ keys packed in disposable plastic bags, using disposable gloves); if employees need to go outside, the driver is obliged to stay in the car.

We hope that a reasonable application of some or all of the above guidelines will ensure the safety and sense of security for employees, and will guarantee uninterrupted production capacity in industrial facilities.

#ReturningToWork

The Union of Entrepreneurs and Employers in cooperation with Procter & Gamble

 

Fot. marcin049 / pixabay.com