As of September 2024, a new draft bill is under development which will allow the State Labour Inspectorate (PIP) to turn civil law contracts into employment contracts by administrative decision.
As of September 2024, a new draft bill is under development which will allow the State Labour Inspectorate (PIP) to turn civil law contracts into employment contracts by administrative decision. As a result, employers need to review their civil law contracts to ensure they do not fulfil the criteria of an employment relationship.
What’s changed?
Up until now, the PIP could bring an action to set up the existence of an employment relationship between an employer and a person performing work under the conditions inherent in an employment contract. Ultimately, the nature of the parties’ relationship was decided by the labour court. This is now set to change. The State Labour Inspectorate is to gain the power to convert civil law contracts into labour contracts based on an administrative decision.
What does this mean in practice?
According to the labour inspectorate’s announcement, inspectors should respect the principle of freedom of contract. They will, however, ensure that the form of cooperation chosen by the parties corresponds realistically to the way it is conducted. This means that the forms of cooperation used by entrepreneurs will have to undergo in-depth internal verification. At this point, little is known about what the procedure will look like. It is known that the employer will be able to appeal against an order to change the form of employment into an employment contract. It is not known whether such a right will also be available to the employee, although it seems that such a possibility should be provided for, as they will be a party to the proceedings. The new regulations are in the drafting stage, and the date of their entry into force is also unknown.
What are the risks and what to pay attention to?
Current reports cite that the main criterion for assessing whether a contract should be an employment contract will be to find the circumstances of subordination and being subject to the instructions of the entity commissioning the work. Inspectors will also look more carefully at those who have changed the form of cooperation with the existing employer to self-employment or a civil law contract. What will be examined, therefore, is not so much the content of the contract itself concluded by the parties, but the actual manner of its execution. Since the order will be issued during an administrative procedure, the PIP will have the power to question witnesses, examine documents, or question the parties. Therefore, to minimise risks, it is worth looking at the civil law contracts entered into now and correcting mistaken practices accordingly.
What are the main risks for an employer?
The main risks for an employer who enters civil law contracts under the terms of an employment contract include:
Edyta Nowak-Skawska
Head of the Health & Benefits Department
GrECo Poland
T +48 882 366 293
