Warsaw, 5th October, 2018

 

Position of the Union of Entrepreneurs and Employers on the proposed text of the directive on the reduction of the impact of certain plastic products on the environment

 

The draft Directive on disposable plastic products by the European Commission raises strong concerns of the business community. In the long-term, it will affect many Polish entities in a strongly negative way, significantly worsening their situation.

 

It should be noted that the original proposal raises far-reaching concerns, but the situation is getting even more dangerous, as in recent weeks there has been a significant tightening of the course taken. Members of the European Parliament have made numerous amendments, two of which disproportionately and in an ill-considered manner hit the Polish tobacco industry. This is important inasmuch as in this industry Poland has a strong competitive advantage over other EU markets, both in terms of production volume as well as the size of investments and employment. The concerns about the shape of the draft Directive and the amendments tabled is only reinforced by the fact that the vote in the Committee on Environment, Public Health and Food Safety (ENVI) will take place on 10^th October while the works in both the Council and the European Parliament are held on the principle of the so-called “fast track”.

 

The first amendment proposed by EU parliamentarians concerns the introduction of additional information obligations for manufacturers of tobacco products regarding appropriate methods of disposal of garbage, the effects of illegal littering, and information about the presence of plastic in the product. One must note that the appearance of a cigarette pack is already regulated by numerous legal acts. Relatively recently, the appearance thereof has been significantly interfered with, imposing on manufacturers the obligation to put health warnings on the packaging of tobacco products relating to the effects of tobacco use. The proposal to impose additional obligations on manufacturers of tobacco products in terms of informing about the proper ways of disposing of garbage, the consequences of illegal littering, or the content of plastic in the product, raises legitimate objections. It must be emphasised that the European Commission took the above-mentioned conditions to be considered when designing the directive in its current shape.

The second amendment aims to reduce the use of cigarette filters, i.e. of the elements that have a key health impact as far as the product goes, which is to limit the amount of harmful substances that end up in consumers’ organisms. The observance of acceptable concentration levels of certain substances (resulting from legal acts of the European Union) requires the use of filters with appropriate properties. It must be highlighted that despite of the fact that many studies have been conducted over the years, one has yet not managed to find an appropriate substitute for the currently used cigarette filters. Any limitation to the possibility of using filters is therefore tantamount to an adequate limitation of the production and sales of tobacco products. In practical terms, this would entail a real risk of production reduction or even closure of factories of tobacco producers in Poland. In the tobacco industry, there would be reductions of employment, while the revenues to the state budget due to excise tax on tobacco products would be significantly reduced. It seems that the scale of the potential negative effects of accepting the amendments proposed by Members of the European Parliament is large enough to clearly oppose them.

 

In recent years, Western European countries moved the production of tobacco products to the east, primarily to our country. Polish factories, serving hitherto the our local market, started to manufacture products for exports – in total to a several dozen countries. Poland became the industry leader. Presently, the Western European countries are pushing the solutions described above, which will result in the elimination of the established market position of Polish factories, as well as the mass dismissals of tobacco industry employees.

 

We recognise the need of legislation and the importance thereof, aimed at reducing the amount of plastic in the natural environment. However, we would count on actions to be undertaken that represent a wider socio-economic compromise.

 

 

Fot. marcin049/pixabay.com

Warsaw, 12^th September 2018

 

The tax interpretation system in Poland requires a far-reaching reform, because in its current shape it does not guarantee the taxpayers adequate protection against the negative effects of amending or repealing interpretations – this is the fundamental conclusion included in the latest publication of the Union of Entrepreneurs and Employers published as a Business Paper.

The Polish tax system is one of the most tax payer-unfriendly ones in Europe – the perfectly testament to this state of affairs is Poland’s 51^st place in the last edition of the Paying Taxes ranking. More than 75% of entrepreneurs believe that legal instability is one of the biggest obstacles to running a business. Therefore, there is no doubt that Poland has a serious problem with its tax system.

“For years, we have been appealing to consequent governments for a radical change of the tax system, which is disastrous, but our petitions are in vain and things get worse,” claims Cezary Kaźmierczak, President of the Union of Entrepreneurs and Employers. “Even when we published our document containing a thoroughly described concept of a reform, along with all the necessary calculations, there was hardly any interest on the politicians’ side to initiate change. This serves as perfect proof that the quality of the tax system is not among the real priorities of successive administrations. What counts above all is that there are sufficient funds going to the budget. It is of secondary importance to politicians how much of a cost this state of affairs is to entrepreneurs.”

Institutions that were introduced to mitigate the effects of tax law provisions ambiguity are individual and general interpretations of tax law. The former relate to a specific factual situation or a future event described in a given motion; the latter in turn is issued by the Minister of Finance in order to unify the application of tax law by the authorities.

Over the past several years, we have seen a clear decreasing trend of the number of individual interpretations issued: in 2017, there were only slightly over 25.5 thousand of them issued, the least in a decade. The vast majority of interpretations refer to VAT, which clearly shows that it is this tax that causes the most problems to taxpayers.

“Indeed, the number of individual interpretations issued is falling and it seems that this is the consequence of the fact that entrepreneurs see how little protection they give them,” says Jakub Bińkowski, Secretary of the Department of Law and Legislation of the Union of Entrepreneurs and Employers. “The original concept of legal certainty, guaranteeing taxpayers that they will not suffer from the negative effects of amending or repealing interpretations, gave hope that this level of protection would increase. Unfortunately, in the course of the work, this structure was significantly changed”.

Moreover, there were also fewer general interpretations issued in 2017 than in the previous year, because there were only 6 of them. Is this the result of an improvement in the quality of the tax system in Poland? According to Cezary Kaźmierczak: certainly not.

“The quality of the Polish tax system has been bad for a long time and I do not see any radical improvement in this respect,” comments the Union’s President Cezary Kaźmierczak. “So I appeal to the government once again to simplify the regulations and allow entrepreneurs to run their businesses, rather than spend countless hours interpreting new laws and regulations.”

12.09.2018 Business Paper of the Union of Entrepreneurs and Employers – Tax interpretations in Poland (in Polish)

Fot. hammer 

Warsaw, 23^rd August 2018

The development of innovative enterprises possible thanks to the implementation of the 5G network

Polish economy can benefit greatly from the development of wireless communication and 5G technology. The revolution in this field will be possible thanks to the harmonisation of power density limits in Poland with the standards accepted as safe by the World Health Organization and the International Commission on Non-Ionizing Radiation Protection (ICNIRP), as well as thanks to th execution of new investments and infrastructure modernisation.

On August 22^nd, the daily paper “Gazeta Polska Codziennie” organised a debate to which representatives of government administration and business environment were invited. They talked about the need to create an ecosystem necessary for technological development in Poland, as well as what should be done to make telecommunications investments take place faster while at the same time, state control is maintained over them.

The guests who discussed the role of modern technologies in the execution of “Plan Morawieckiego” (an economic framework created by Prime Minister Mateusz Morawiecki) were Jadwiga Emilewicz – Minister of Entrepreneurship and Technology, Jerzy Kwieciński – Minister of Investment and Development, Marek Zagórski – Minister of Digital Affairs, Cezary Kaźmierczak – President of the Union of Entrepreneurs and Employers, and Mirosław Godlewski of Boston Consulting Group Poland.

Mirosław Godlewski, Senior Advisor at BCG Poland, pointed out that one of the key barriers affecting the technological revolution, understood as the development of the 5G network, are currently the lowest and most restrictive in Europe PDLs (power density limits). The expert pointed to the constantly growing demand for data transmission. In his opinion, the surplus of demand over supply in this respect will amount to over 30% in two years.

“Without raising and harmonising the power density limits in Poland to the standards in force in other European Union countries, we will not be able to develop the 5G network,” said Mirosław Godlewski.

According to the BCG Report “The impact of PDL (Power Density Limits) on wireless connectivity: is there a threat of delays in 5G development in Poland?”, already today, restrictive power density limits have a negative impact on the mobile Internet service in Poland. None of the largest European countries, such as Germany, the United Kingdom or France, imposes such stringent restrictions on their mobile Internet sector.

Do we want to benefit from transformation?

“4G technology led to digitisation. 5G can lead to smartisation, both in the public and private sectors,” claims the Minister of Entrepreneurship and Technology Jadwiga Emilewicz. “Many analyses indicate that the implementation of new communication technologies, such as 5G, will significantly translate into dynamic economic development of a given country and, consequently, will positively affect the situation on the labour market.”

The Minister pointed out that the creation of a basic infrastructure for the development of the 5G network is crucial for the development of smart cities, telemedicine, transportation and other sectors, such as the financial services sector. “By 2020, we should have several urban centres Poland that stimulate the development of 5G networks,” she added.

“5G technology is one of the most ground-breaking that have appeared in recent years. We see many branches of the economy in which its use will be crucial: transportation, telemedicine, industry,” said Jerzy Kwieciński, head of the Ministry of Investment and Development. “Europe is lagging behind the rest of the world, especially Asia and the United States, in term of 5G networks’ development. One of the developmental barriers is the legal environment. The already mentioned most restrictive power density limits are another. Baltic countries also have a bandwidth problem. Even half of Poland is covered by ‘interferences from the East’.”

The Minister stressed that the Strategy for Responsible Development assumes financing for the development of the 5G network and this is one of the high priority tasks. “We have to systematically introduce changes in the legal environment, but also have to make the requirements related to the investment process more business-friendly, while taking into account social conditions,” he summarised his opinion.

The Minister of Digital Affairs Marek Zagórski, who also took part in the debate, discussed the importance of modern technology which translates into the improvement of people’s quality of life, as well as the infrastructure necessary for its development.

“5G technology consists of several elements: base stations, investments by telecommunications operators, construction of a fibre-optic network. Currently, at the Ministry we are working on a IT system that will support the expansion of a 5G network. Another issue is related to the development of the implementation program in terms of simplifying and shortening the investment process. It is also necessary to reduce local fees introduced by local governments, which make it difficult, for example, to build fibre-optic networks,” said Marek Zagórski.

Cezary Kaźmierczak, President of the Union of Entrepreneurs and Employers, pointed out that Europe is losing to Asia and America through numerous and complicated regulations: “Unless we get rid of the shackles of bureaucracy, not only in this field but also in others, our domestic business will be far behind our competitors from abroad. I appeal to the government for prudence in implementing new regulations.”

What needs to be done first in order for the 5G network to be implemented in Poland?

“Good infrastructure, broadband network covering, if possible, the entire territory of Poland, shortening the construction and modernisation period for broadband stations, full implementation of the European Electronic Communication Code and implementation of the pilot program for 5G network development are challenges that we have to face,” summarised Minister Jadwiga Emilewicz.

Minister Jerzy Kwieciński assured that when it comes to economic experts, the conviction about the importance of this technology seems to be a fact. He also mentioned the need to create a friendly legal environment for the implementation of investments in this area and to convince the public that 5G technology is really safe.

“Finance is the subject concerning the development of 5G networks most often addressed at the Ministry of Investment and Development. It seems that this will not be a big problem – a good legal framework will translate into the fact that business will want to invest in this type of undertakings. 5G technology will be an additional drive for the development of the entire economy,” assured Minister Kwieciński.

Marek Zagórski from the Ministry of Digital Affairs pointed out that quick administrative decisions will have a significant impact on the construction of the network. He also said that the changes would primarily benefit business. In his opinion, it is of key importance to educate this group about the benefits of developing a 5G network.

Cezary Kaźmierczak representing the Union of Entrepreneurs and Employers highlighted the fact that the most important aspects of implementing such changes are political leadership, courage, and determination.


Photo: ZPP

22^nd August 2018

Employers’ organisations and NGOs that support foreigners living in Poland jointly appeal to Elżbieta Rafalska (Minister of Labour and Social Policy) and Jadwiga Emilewicz (Minister of Entrepreneurship and Technology) to introduce systemic changes that will improve the process of legalising foreigners’ stay and employment in Poland. Not assigning employees to specific employers, informatisation of the system of legalising the work of foreigners, changing the competences of Chief Labour Inspectorate PIP are but a few of their postulates.

Employers’ associations and social organisations speak with one voice regarding the amendments to the Act on the Labour Market proposed by the Ministry of Labour and Social Policy. The amendment concerns the employment of foreigners in Poland.

“Work on a new regulation is a good moment to re-engineer the assumptions of the employment process for foreigners in Poland, and not only to introduce minor adjustments to existing solutions”, we read in a letter signed by professor Witold Klaus, President of the Association for Legal Intervention.

The letter to the ministry was signed by the following organisations: Business Centre Club, Polish Chamber of Commerce, Union of Entrepreneurs and Employers, Centre for Migration Research Foundation, Polish Migration Forum Foundation, Helsinki Foundation for Human Rights, Bread and Salt Initiative, Institute of Public Affairs, Homo Faber, Association for Legal Intervention, Association for Multicultural Society Integration. What do they demand?

1. More freedom for employees

The current regulations stiffen the labour market and lead to strengthening the already privileged position of the employer towards foreigners who find it harder to assert their rights in case of being abused or falling victim to an abuse of rights. This is due to the fact that the legalisation of work is closely related to the legalisation of stay, and the loss of employment leads in principle to the loss of the legality to stay.

A new form of a work permit could therefore be issued to a foreigner for a specified period of time, but to provide services to any employer. In the minimum variant, it would be possible to introduce restrictions on working only in a specific profession or only in a specific area (e.g. one voivodship).

2. Legal employment upon submission of documents

It would also be appropriate to introduce a principle that the work of a foreigner is considered legal from the moment of submitting a formally valid application, containing all the required documents regarding the legalisation of work. In that case, delays resulting from a prolonged wait for a document to be issued by the appropriate office would not unnecessarily burden enterprises or foreign employees. Thus, obtaining a work permit or a declaration of entrusting work to a foreigner would only confirm the legality of their employment.

3. Permission to work as a “reward” for legal work

Another important systemic change would be to show greater confidence in foreigners who have so far acted legally, i.e. they worked legally. After a certain period (e.g. 3 years) of such work, foreigners would receive a general permit for a legal stay and work in Poland for a period of, for instance, 5 years.

4. Permission-free employment for graduates

All high school or university alumni who completed their education in Poland should receive the opportunity to work without a work permit as well as obtain a residence permit for this purpose for 3 years, and then having documented employment in the above-mentioned period, a permanent residence permit. The challenges facing the Polish labour market also require extending rather than narrowing the current regulations.

5. Automation and informatisation of the foreigners’ employment legalising system

Procedures related to employing foreigners should take place online without the need for employers to appear in offices. All submitted documents could be confirmed by an electronic signature (or analogous systems, e.g. a trusted profile on the e-PUAP platform). This way, employers would fill out an online application, attach scans of relevant documents to it and could generate a relevant permit / statement after the verification of the application by a clerk appriximately 2-3 days after the application submission date.

6. Operational changes of the Chief Labour Inspectorate’s prerogatives to transform it into an institution offering only help and assistance

The Chief Labour Inspectorate should be deprived of investigative functions, checking the legality of foreigners’ employment and punishing them for working without proper permits. The Inspectorate – as it takes place in case of Polish employees – should be an institution only providing support and assistance that can be contacted without fear of negative consequences associated with this action.

The full contents of the letter with comments on the proposed changes can be found here.

Recommendations on improving the process of legalisation both employment and stay of foreigners in Poland can also be found in the report of the Association for Legal Intervention and the Konrad Adenauer Foundation titled “Employers and employment of foreigners.” The publication is available on the Association’s website www.interwencjaprawna.pl in the Publications tab.

Warsaw, July 20^th, 2018

THE UNION OF ENTREPRENEURS AND EMPLOYERS AGAINST THE LIQUIDATION
OF THE FLAT TAX RATE CONCERNING ECONOMIC ACTIVITY

Already mid-May this year, when the idea of liquidation of the flat tax for entrepreneurs and the actual introduction of the 3^rd tax threshold was publicly presented, the Union of Entrepreneurs and Employers expressed a very critical opinion on this issue, pointing, among others, to the fact that the tax will strike financially above all the still fledgling middle class. Today, we have a ready-made draft bill that must be judged even more harshly – it assumes increasing tax burdens not only for wealthier citizens, but for all those employed, thus contributing to the increase of the tax wedge in Poland.

The presented draft bill comprises of three key elements. First of all, the Solidarity Support Fund for Disabled People (Solidarnościowy Fundusz Wsparcia Osób Niepełnosprawnych) is to be created. It is virtually impossible not to notice that the legislator therefore decides to clone the State Fund for Rehabilitation of Disabled People (Państwowy Fundusz Rehabilitacji Osób Niepełnosprawnych – PFRON) – albeit under a different name. Even the activities, which the Fund’s resources will be allocated for, are alike – they concern, among other things, execution of “tasks in the field of social and vocational support for disabled people” (the PFRON Act includes the execution of tasks “in the field of occupational and social rehabilitation of disabled people carried out by foundations and non-governmental organizations”) or “programs co-financed from European Union funds for people disabled people” (PFRON Act: “programs planned for implementation in a given year, supported from European Union aid funds for people with disabilities”).

Thus, the authors of the draft bill propose to actually double an already existing institution. They do so in a situation in which the functioning of certain elements of the system built around PFRON requires far-reaching adjustments (e.g. the issue of “trading” on payment reductions, which the Union of Entrepreneurs and Employers ZPP already elaborated on in a separate document). It is necessary to point out at this point that there is a lack of systemic logic. When it is still necessary to reform the rules and regulations of operation of one fund, another one is established, designed for practically the very same purpose. We believe that from the point of view of the quality of state institutions, as well as the effectiveness of their activities, such fragmentation and duplication of entities do not serve any purpose, it is point-blank harmful – therefore, the legislator should refrain from doing so.

The real problem, which should be addressed with absolute certainty, appears, however, not at the stage of creating the new fund, but when the legislator describes the system of its financing. As far as taxes are concerned, namely a new tax threshold and liquidation of flat rate income tax for entrepreneurs – the arguments against this solution have already been stated. The introduction of this concept will be economically damaging, and it also stands in radical violation of election promises (government representatives would repeatedly state that they did not intend to introduce new taxes, and that they would be able to finance their social projects thanks to tightening the tax system and allocating resources more reasonably, not increasing fiscal burdens). What has been proposed in the draft bill is now way beyond this framework.

It is postulated that the resources of the Fund should come not only from revenue from the new tax –it is clearly stated in Art. 3 that the Fund’s revenues are “compulsory contributions to the Fund”. In accordance with Art. 4, persons subject to pension insurance (with exceptions listed in the draft bill) are compulsorily obliged to contribute. To put it in straightforward terms – the draft bill proposes to increase the compulsory taxation of all wages, at least from the minimum wage up (if the salary comes from different sources, then it is added up), with regard to people employed on the basis of any contract. In practice, this means that employees, who already earns net only slightly more than 50% of the expenses actually incurred by the employer, will receive even less. Even if they only earn the minimum wage. Socially, this is an extremely harmful idea.

The Union of Entrepreneurs and Employers has long indicated that one of the biggest problems of the tax system in Poland (and more broadly – the system of all public levies) is the fact that salaries and wages are drastically taxed, in particular the lowest ones. Even the proposal of a new tax system, developed by the circles close to ZPP, primarily assumed a radical reduction in labour taxation. People’s affluence and wealth come from natural resources, capital, and work. We are unable to change the state of having natural resources to a significant extent by means of peaceful methods, nor do we have accumulated capital, because throughout the last several centuries, we have only had short periods of independence and free entrepreneurship in Poland. The conclusion can only be one – if we want to catch up with more affluent countries, we must focus on work.

How is the work of Poles to generate wealth, since such a large part of its financial reward in the form of remuneration is simply taken away by the state? The proposal to increase the burden on remuneration is a curious oddity – the tax wedge in Poland is already at the level of the OECD average (and the organisation brings together highly developed countries whose citizens are in many cases much more affluent than Poles). Why does the government want the level of these burdens to further increase? Wages began to grow more dynamically (Central Statistical Office of Poland GUS figures speak for themselves), and another way (following the fuel fee) was found for Poles to benefit from the economic prosperity to a lesser extent than they could.

Apart from the issue of a fair and effective distribution of the tax burden, the next question is also relevant: to what extent will the new contribution additionally burden the remuneration of Poles? It is scandalous that there is nothing about this in the draft bill. According to Art. 4 sec. 2, the amount of the contribution to the Fund is specified in the budget act. Therefore, we are dealing here with an unprecedented situation – not only that the legislator postulates the introduction of an additional levy, they also do not specify its amount in the draft. Regulations in this form would mean that the government can manipulate the amount of the contribution year to year. It is a fatal proposal and one violating a number of constitutional principles.

Apart from the obvious issues, such as the principle of legal security or trust in the state, it is worth considering Art. 217 of the Polish Constitution and the principle of regulating public levies and their structural elements resulting from it exclusively and completely in an act. According to the jurisdiction of both the Supreme Court and the Constitutional Tribunal, it is clear from the provision of the Constitution that all the essential elements of the “tribute ratio” should be regulated directly in an act. This means that in relation to these “essential elements’ (which certainly include the tax rate or the amount of the premium), one cannot use delegation to issue a regulation. Is the legislator, while not wanting to determine the amount of the tax directly in the act, trying to find a way out of the situation, transferring the amount of the contribution to be paid to the budget act, and not a ministerial regulation?

It might seem at that time that the requirement to determine the essential elements of the tax ratio is respected; however, the budget act is of a special nature, and the mechanism proposed by the authors of the draft bill means the breakdown of the regulations of essential construction elements into two legal acts, one of which is additionally of rotating character. There is also no doubt that the intention expressed in the provision was that the legislator could not leave in the act regulating the tribute any “free room” to determine the rate or the object of taxation in a separate act, and this certainly will happen if the bill is adopted in the present form.

At the same time, one ought to make note of double (sic!) false narrative surrounding the project. On the occasion of presenting the tax concept, government representatives in an untrue way claimed that they were not raising taxes. The fact that this was a lie was already known back then. At the same time, however, it was being said – in an extremely populist tone – that additional support for disabled people with the help of a new tribute would only burden the “richest” of Poles. It can now be said that the public was then misled for the second time – the draft bill explicitly states that everyone should contribute to the new Fund, not only those whom the government considers to be “the wealthiest”.

To sum up, we consider the draft bill to be a terrible attempt to increase the fiscal burden on remuneration and income from economic activity in Poland, which is directly contrary to the economic interest of our country, as well as in contradiction with the announcements of the government. At the same time, we draw attention to the scandalous form of the regulation regarding contributions to the new Fund – one cannot accept a draft in which the amount thereof is not directly specified and which refers to the budget act. We postulate withdrawal from this harmful project and to start a proper debate: both concerning the rational support of people with disabilities and with regard to the construction of a fair and effective tax system in Poland.

The Union of Entrepreneurs and Employers

Warsaw, August 13^th, 2018

 

The Russian embargo does not work –we have alternative consumer markets.
Food exports are on the rise

 

The Polish trade balance after the introduction of the Russian embargo is systematically improving. The structure of exports has not changed; however, the volume of food products exported has increased. Poles were, therefore, successful in effectively finding alternative consumer markets.

The basic conclusion from the document published by the Union of Entrepreneurs and Employers ZPP is as follows: Polish exporters are doing very well and in spite of the embargo, they are gradually increasing the volume of exports, seeking new markets. What is important, the export of food products was not particularly affected by the embargo. It seems, however, that the main victims of the whole situation are primarily the Russians.

“Immediately after the embargo was introduced, we were being scared how terrible the consequences would be for Polish producers, in particular farmers were to await a catastrophe,” says ZPP President Cezary Kaźmierczak. “Meanwhile, it turned out that Russia is not an indispensable market for our exporters, and the embargo hits the Russians themselves, who now have to pay much more for food than before 2014.”

The fact that the embargo had no significant negative impact on the volume of Polish exports is best evidenced by hard data – in 2013, we exported goods worth approximately PLN 648 billion. In 2016, two years after the embargo was introduced, the value of exports increased to PLN 803 billion, that is circa 32% more compared to 2013. At the same time, the structure of exports did not significantly change, which means that the volume of sales abroad of Polish food products also increased.

“This clearly shows that the embargo did not lead to the collapse of Polish food exports. It also turns out that Russia is not at all a key market for Polish exporters, already in 2013 we were selling more to our small neighbour – the Czech Republic – than we were to Russia,” says Jakub Bińkowski, Secretary of the Department of Law and Legislation of the Union of Entrepreneurs and Employers ZPP.

Despite the fact that Poles managed to cope with the constraint introduced in 2014, or the fact that Russians complain about rising food prices, Vladimir Putin claims that he will keep the embargo in force for as long as possible. It seems that there are no rational premises for this – even the condition of the Russian food sector, which could theoretically be improved if the embargo were abolished, does not justify maintaining the embargo because of its increased share in satisfying internal food demand. A significant improvement can only be noted in the poultry and pork sector.

Finally, it seems that Russia, due to the instability of its economic situation, largely dependent on prices on the raw materials market, as well as the relative poverty of the majority of the population (especially in the oblasts far from Moscow), is not a very attractive market, therefore possible maintaining of the embargo should not pose any serious threat to Polish producers. Henceforth, the argument that the embargo was an exceptionally severe repercussion resulting from political and economic sanctions imposed by Russia, that should be eased – according to some – must be regarded as false.

***

Business Papers is a new format of documents prepared by the Union of Entrepreneurs and Employers ZPP – it consists in a synthetic presentation of the most important facts and data concerning the issue discussed, in a graphically attractive form. Thus, the readers can quickly learn key figures, statistics, and news on the subject of their interest.

13^th August 2018 Russian embargo vs. Polish exports (in Polish) 


fot. Tim Mossholder / Unsplash

August 2^nd. 2018

 

A new employers’ union hass formed – the Union of Agricultural Entrepreneurs. On August 1^st this year in Biała Podlaska, several dozen large Polish agricultural entrepreneurs met and elected their Organisational Committee comprising of 12 members. The Committee will deal with the Union’s registration. During the meeting, apart from organisational issues, legal problems in the field of development of agricultural enterprises and agricultural production, issues of international competition and changes taking place in the Polish countryside were discussed.

This is a fragment of a speech by Cezary Kaźmierczak, the President of the Union of Entrepreneurs and Employers at the founders’ meeting:

“There are great challenges ahead of Polish agriculture. We are dealing with a series of events and processes for which we must prepare to adequately respond. The most important challenges facing Polish agriculture are problems with farm succession and growing competition from Ukraine. We are just at the threshold of these two phenomena. They will intensify and unless we react properly, they will threaten Polish agriculture.

Poland owes a lot to small family farms. During the communist period, these were oases of tradition, work culture, entrepreneurship and common sense. To a large extent thanks to those values that survived in the countryside, it was possible for Polish entrepreneurship to explode after the collapse of communism. The time of these farms as a model of farming is slowly passing. Both due to lack of succession and powerful competition.

This competition comes mainly from Ukraine, where giant agricultural enterprises (“agrozavods”) are created, covering up to tens of thousands of hectares, based on oligarchic money, western technologies, cheap labour and excellent soil. Small Polish farms are not and will not be able to compete with the Ukrainian “agrozavods”.

I remind you that the way of Ukrainian agricultural products to the European Union is open.

However, we have not yet lost. We only need to create competitive Polish “agrozavods”, that is Polish agricultural enterprises, as a response to Ukrainian ”agrozavods”. We have many competitive advantages, including broader experience, greater work culture, a better understanding of sales markets, we are more entrepreneurial. All that is needed is a political decision to change the model of Polish agriculture – we must leave the preference for small family farms that are in decline and invest in Polish agricultural entrepreneurs.

To achieve this, we need a whole system of support, from a favourable legal system for a new order in the countryside, to loans guaranteed by the government for the development of agricultural enterprises.

The second area where we can compete is unprocessed and processed high-quality and highest-quality food. We have a decisive advantage here and we should take action to strengthen it.

I repeat – without strong support for the production of high-quality food or without a systemic support for shaping a new order in the countryside, based on efficient, private agricultural enterprises – Polish agriculture may not survive.” – in these words, Cezary Kaźmierczak ended his speech.

Warsaw, July 31^st, 2018

 

An appeal to the government of the Republic of Poland regarding the maintenance of the upper limit for the basis of social security contributions
(the thirty-fold rule)

 

Taking into consideration:

• the controversy caused by the proceedings of the Act of December 15^th, 2017 amending the Act on the social security system and other acts abolishing the thirty-fold rule,
• the dismissal by the Constitutional Tribunal of the hearing on the examination of the compliance of the Act with the Constitution of the Republic of Poland and the still unknown date of the recognition of the application of the President of the Republic of Poland,
• the uncertainty regarding the legal status, and subsequent legislative initiatives increasing the costs of employers’ activities, limiting the possibilities of new investments by entrepreneurs,,
• the goals of the government’s Responsible Development Strategy, which assume the creation of high-quality and highly-paid jobs in our country,
• the increased in labour costs of high-class specialists, which reduce our country’s attractiveness as a place to create innovative jobs,
• the lack of initiatives that increase the attractiveness of employment contracts in relation to other forms of employment,
• the finalisation of budgets preparation by entrepreneurs for the year 2019.

we postulate that the government commits to maintain the upper limit of the basis for social security contributions, at least until the year 2020, and to engage in argumentative talks with social partners.

 

The appeal has been signed by:

• Konfederacja Lewiatan – Polish Confederation Lewiatan
• Pracodawcy RP – Employers of Poland
• Business Centre Club
• Związek Rzemiosła Polskiego – Polish Craft Association
• Związek Przedsiębiorców i Pracodawców – Union of Entrepreneurs and Employers
• Polski Związek Pracodawców Przemysłu Farmaceutycznego – Polish Association of Pharmaceutical Employers
• Polska Rada Centrów Handlowych – Polish Council of Shopping Centers
• Związek Pracodawców Technologii Cyfrowych Lewiatan – Digital Technology Employers Lewiatan
• Związek Pracodawców Firm Produkcyjnych – Association of Employers of Production Companies
• Transport i Logistyka Polska – Transport and Logistics Poland
• Polskie Forum HR – Polish HR Forum
• Związek Pracodawców Prywatnych Mediów – Association of Private Media Employers
• Związek Pracodawców Motoryzacji i Artykułów Przemysłowych – Association of Employers of Automotive and Industrial Goods
• Izba Gospodarki Elektronicznej – Chamber of Digital Economy
• Związek Pracodawców Sektora Kosmicznego – Polish Space Industry Association
• Polska Organizacja Handlu i Dystrybucji – Polish Organisation for Trade and Distribution
• Federacja Przedsiębiorców Polskich – Federation of Polish Entrepreneurs
• Związek Pracodawców Branży Infrastruktury – Association of Infrastructure Industry Employers
• Polskie Stowarzyszenie Sprzedaży Bezpośredniej – Polish Direct Sales Association
• Związek Pracodawców Branżowych – Association of Industry Employers
• Polska Izba Gospodarcza Czystości – Polish Cleaning Chamber of Commerce
• IAB Polska – IAB Poland
• Polska Izba Informatyki i Telekomunikacji – Polish Chamber of Information Technology and Telecommunications
• Związek Przedsiębiorców Przemysłu Mody Lewiatan – Association of Fashion Industry Entrepreneurs Lewiatan
• Rada Podatkowa Lewiatan – Tax Council Lewiatan
• Polski Związek Przemysłu Kosmetycznego – Polish Association of Cosmetics Industry
• Związek Pracodawców Producentów Materiałów dla Budownictwa – Building Materials Manufacturers Employers Association
• Związek Pracodawców Hoteli, Restauracji i Cateringu – Association of Employers HoReCa
• Polska Unia Szpitali Specjalistycznych – Polish Union of Specialist Hospitals
• Związek Pracodawców Prywatnych Energetyki – Association of Private Energy Employers
• ABSL – Association of Business Service Leaders
• Stowarzyszenie Energii Odnawialnej – Renewable Energy Association
• Stowarzyszenie na rzecz systemów ociepleń – Association for Thermal Insulation Systems
• STRATERA MED

 

The appeal together with the list of signing parties was sent to Mateusz Morawiecki, the Prime Minister of the Republic of Poland, and Elżbieta Rafalska, Minister of Labour and Social Policy, President of the Social Dialogue Council.

The list of signing parties is still open and we encourage other organisations to join the initiative.
More information

Organisations that would like to express their support for the appeal are asked to contact Maciej Drozd: mdrozd@konfederacjalewiatan.pl.

Warsaw, 17^th July 2018

 

POSITION OF THE UNION OF ENTREPRENEURS AND EMPLOYERS ON THE DRAFT ACT ON THE
LABOUR MARKET OF 29^TH JUNE 2018

The Union of Entrepreneurs and Employers has repeatedly highlighted the necessity to introduce far-reaching changes in the rules and regulations of employing foreigners in Poland. This need stems from at least two factors – the first being the current deficit of people of working age which presents an undesirable situation for entrepreneurs, i.e. lack of hands to work. The shortage of qualified employees at the moment is one of the major obstacles to the development of companies – including those from the SME sector. The second aspect that needs to be considered is the fatal demographic situation of Poland in the long run. This problem is already manifested by the above-mentioned deficits on the market, but within several dozen years, it will take on a much more serious dimension.

A small number of working people will have a negative impact on the condition of the state budget, it will have a fatal influence on the pace of the country’s economic development and may ultimately lead to the collapse of the pension system. That is why it is vital to supplement the shortages that have already been created during the many years when the fertility rate in Poland did not ensure a simple replacement of generations.

An important element of the plan to prevent the long-term effects of this demographic disaster must of course begin with a wise and properly targeted pro-family policy that rewards having more than two children. The resulting “gap” cannot be supplemented, however, only with new births – according to available estimates, to maintain the pace of economic development, by 2050 we will need at least 5 million economic migrants. Immigration is currently a very touchy topic in Europe due to the so-called immigration crisis caused by an unreasonable “open door” policy for all visitors from the Middle East and Africa. As a result, a large part of Western European countries has brought about a situation in which their spending on social benefits regularly increases to horrendous proportions, while they do not receive an appropriate added value in return. Poland, being a country still economically catching up with the broadly understood West, should learn from the mistakes of its wealthier partners. Thus, we must not duplicate the immigration policy of Germany or France. We should benefit from the large resources of employees willing to take up employment in Poland from culturally approximate countries, or those who, as ethnic groups, during their many years of residency in the country undertook economic activity, and worked in a broader, statistically valid sense, while not generating neither criminal problems nor excessive social spending (e.g. the Vietnamese).

The rules and regulations of employing foreigners in Poland constitute a very important element of immigration policy in the economic context. The Union of Entrepreneurs and Employers has repeatedly advocated simplifying and liberalising the rules of employment of foreigners in Poland. Thus, we generally consider the draft law on the labour market as a step in the right direction. At the same time, we stress the fact that the proposed solutions are still insufficient, and it is necessary to undertake bolder actions.

Strong support should be given to the requirement that the work of a foreigner without a permit, on the basis of a declaration of intention to perform work for a foreigner, should be possible not for six months within a 12-month-long period, as is currently the case, but for 12 months within an 18-month-long period. Consequently, foreigners from selected countries (mainly from Ukraine) will have the opportunity to work in Poland for a whole year with a subsequent six-month break. In general, we acknowledge the system of declarations of intent to entrust work to a foreigner as optimal (although already to some extent complicated by recent changes –the earlier system was simpler and more informal), therefore a proposal to extend the time when a foreigner can work on the basis thereof, we definitely support, although we believe that a forced break from work on the basis of the statement makes no sense and one ought to have the possibility to continually prolong the declarations.

At the same time, a few changes to the system of declarations are introduced that require clarification. For example, Art. 298 sec. 8 of the Act granting the staroste (poviat authority) the right to issue a decision on the annulment of the entry of the statement on entrusting work to a foreigner in the record of statements, including “if the Polish employer does not conduct activities justifying the entrustment of work to a foreigner”. Admittedly, the premise is further specified by indicating that it is “in particular” a situation in which the employer does not conduct business, statutory or agricultural activity or its activity is in liquidation or suspension period. The catalogue mentioned by the legislator is not closed, however, and there is a risk of an expanded interpretation of this provision, in which the staroste could state that the Polish employer does not conduct any activity justifying the entrustment of work to a foreigner and make the entry of the statement in the register null and void. It would therefore be worth making the catalogue referred to in Art. 298 sec. 8 point 2, a closed catalogue of premises whereby the staroste could issue a decision on cancellation of the entry of the declaration to the register.

At the same time, we draw attention to the provisions facilitating citizens of culturally approximate countries their settlement in Poland. While the postulate itself should be commended, because we ultimately want economic immigrants, who are willing to take up jobs and contribute to the Polish economy, to stay in our country for a longer time, we do have serious doubts concerning the limiting those facilitations to people “possessing qualifications in professions desired for the Polish economy”. Bureaucratic determination of “professions desired for the Polish economy” will never keep up with the market or reflect its real, contemporary needs. Therefore, while we are definitely in favour of facilitations, we postulate the resignation from the criterion of having qualifications in some specific professions. From behind an official desk, it will never be possible to accurately diagnose employees of which professions and how many of them exactly does the Polish economy need at any given moment, especially that in the current realities and at the current pace of technological progress this can change very rapidly.

At the same time, we wish to point out that the draft bill did not address a number of our demands, which were raised often on the occasion of previous discussions regarding the issue of employing foreigners in Poland. Among others, not ascribing declarations and work permits to a specific employer, so that the documents would constitute entitlement to work on the territory of the Republic of Poland and not the fact of being assigned to a specific entity. This way, we will enable immigrants to adapt to the rapidly changing realities of the labour market.

To summarise, the presented draft bill is definitely a step in the right direction, albeit an insufficient one and in a few aspects deficiently precise. We postulate further works be undertaken concerning this project and that our comments presented in the official position above be taken into account.

Union of Entrepreneurs and Employers

 

fot. 13on / on lic. Unsplash

Warsaw, 5^th July 2018

5POSITION OF THE UNION OF ENTREPRENEURS AND EMPLOYERS ON THE TERMINATION OF THE TERM OF OFFICE OF THE FIRST PRESIDENT OF THE SUPREME COURT

As long as politicians accuse each other, as long as they maintain that it is them and not the other party who have an idea for Poland, and who convince to the solutions they propose – atypical and radical as they may be – we are witness to a normal discourse that does not significantly diverge from the standards adopted in other countries in the world.

There are, however, some dimensions of the functioning of the state, which due to the raison d’etat should be removed from the rules of a brutal political dispute, within which it is allowed to do and say almost everything.

One of these dimensions is the judiciary, which in the state of law performs at least two roles. First, it serves the peaceful resolution of disputes, and secondly – as part of the classical division of power – protects citizens from the legislative and, most importantly, executive power, especially in a system, in which these two authorities penetrate each other.

For this reason, the Union of Entrepreneurs and Employers criticises the shortening of the term of office of the First President of the Supreme Court, which is discordant with the provisions of the Constitution.

The Supreme Court, which seems to many people an institution terribly distant from the life of an average person, has a strictly defined scope of competence. Both in the old Act of 23^rd November 2002 and in the new Act of 8^th December 2017, these competences include the administration of justice by supervising the legality of the judgments of common and military courts. Within these competences, the Supreme Court has settled many legal disputes vital from the point of view of various social groups in matters concerning everyday life of average citizens. In recent years, after the political changes that took place in 2015, by virtue of the resolution of 22^nd June 2017, the Court confirmed the permissibility of disposing of agricultural property to a relative, even before the end of the 10-year period since its acquisition. On 25^th August 2017, it adopted a resolution that the right to separate ownership of premises located in a building located on real estate, for which perpetual usufruct right has been established, does not expire upon the expiry of the period for which such right was established. This year, the Court stated that when assessing whether a given contractual term is allowed, one should take into account the state at the time of conclusion of the contract, without the need to investigate whether any damages resulted from the use of an unlawful clause – which is essential from the point of view of Swiss franc borrowers. Therefore, the Supreme Court should be considered an institution that is of paramount important to the Polish economic system. Henceforth, one cannot refrain from reacting when the principles of functioning of the Supreme Court provided in the Constitution are violated, because it raises serious concerns as to whether the next step will be interference with its jurisdiction.

According to Art. 183 sec. 3 of the Constitution, the First President of the Supreme Court is appointed by the President of the Republic of Poland for a six-year term from amongst the candidates presented by the General Assembly of the Judges of the Supreme Court. The duration of the term of office of the First President is therefore explicitly stated in the Constitution. Article 180 sec. 1 of the Constitution also states that the judges are not removable. It is impossible not to notice that the theoretical gate to circumvent this provision is sec. 4 of the same article, according to which an act defines the age limit, after which the judges retire. Therefore, a judge cannot be removed theoretically, but it is possible – by means of an ordinary act, voted by a simple majority – to manipulate the age limit, after which a judge will retire by virtue of the law.

Repeatedly criticised by the Union of Entrepreneurs and Employers, the imprecision of the literal provisions of the Constitution must not be used to violate the principles that are not only the principles of the Polish Constitution, but an element of the legal culture of our entire civilisation. There is no doubt that the possibility of determining the age limit of “retirement” must not in any way affect the term and irremovability of the First President of the Supreme Court (just like the President of the Supreme Administrative Court). The duration of the term of office of the First President is specified in the Constitution very precisely, the legislator has not decided to include in the provision a reference to a specific law that would define the terms of retirement – as is the case of retirement age of judges.

In the “old” Act on the Supreme Court, the legislator in Art. 10, in relation to constitutional regulations, narrowed the group of persons who may become the First President of the Supreme Court – the Constitution says that the President appoints the First President from among the candidates presented by the General Assembly of the Supreme Court Judges, while the Act states that the Polish President appoints the First President from among the judges of the Supreme Court in an active state. In the “new” law on the Supreme Court, the procedure was made precise even further – it was specified that the General Assembly of Supreme Court Judges may submit five candidates selected from among the judges of the Supreme Court in the active state. At the same time, it was supplemented that the First President may only be appointed once, and the position may be taken only until the state of retirement, being retired or the end of term. Thus, the Act defines the conditions for terminating the term of office, the duration of which – without exceptions or delegations to determine them in statutory mode – is provided for in the Constitution.

There can be no doubt that the confusion around the Supreme Court would not have occurred if the Polish Constitution had been written in a logical, understandable, and unambiguous manner. This is not the case, however, and unless a new Constitution is adopted, we must rely on the goodwill of those who make use of its provisions. Unfortunately, as the history of the proceedings of the new law on the Supreme Court clearly show together with the shape of the adopted regulations and the subsequent conduct of the authorities, one cannot really speak of goodwill in this case. From the very beginning, the undisguised goal was to get past (or even break) the provisions of the Constitution and to terminate the term of office of the First President of the Supreme Court by retiring the person in question.

The Union of Entrepreneurs and Employers criticises the actions of the legislator, the government, and the president in relation to the Supreme Court and draws attention to the fact that the credibility of the judiciary is one of the key conditions for conducting business in Poland, which is taken into account by both foreign investors and Polish entrepreneurs in making investment decisions. The condition of the Polish judiciary will have an impact on the economic situation and budget results, i.e. factors that allow the current government to carry out some of the amendments. By undertaking such controversial actions, the authorities contribute to the perversion of the rule of law, which – as the latest history of political culture in our country shows – will be a process deepened by successive administrations, which are equipped with an excellent excuse to creatively interpret the Constitution in a spirit coincident with their own, current political interest.

The Union of Entrepreneurs and Employers has repeatedly emphasised the need to urgently reform the judiciary, but we must not accept a situation in which this reform has an almost exclusively personal dimension. For entrepreneurs, the political views of adjudicators are not important – as long as they leave them outside the courtroom. The key is that the economic dispute be settled as quickly as possible. We are still counting on a real change of the system, one that serves Poland, the justice system itself, as well as the citizens and entrepreneurs seeking in courts protection of their rights.

Union of Entrepreneurs and Employers