Polish Prime Minister Donald Tusk announced that he has decided not to continue work on the reform of the National Labour Inspectorate (Państwowa Inspekcja Pracy – PIP).
Previously announced amendment in the scope of PIP was expected to be one of the most significant changes in labour law in recent years. Among other things, it assumed granting PIP the authority to reclassify B2B contracts and civil law contracts as employment contracts – without court involvement. Such reclassifications were to be made by PIP inspectors by way of an administrative decision, the effects of which could even apply retroactively for up to three years. These changes would entail far-reaching consequences, particularly for sectors in which the B2B model is widely used, including the IT industry.
There was no consensus within the Polish government as to the shape of the proposed amendment, and the draft law itself sparked numerous controversies – both among politicians and within the business community. At the same time, because the draft was intended to implement milestones under the National Recovery and Resilience Plan (KPO; milestones A71G/A72G), the legislative work was accompanied by strong political motivation to adopt it within the planned timeframe. As a result, recent weeks were marked by intense anticipation regarding the outcome of this issue.
It now appears, however, that this matter has been settled – the announced changes to the competences of the National Labour Inspectorate will not be introduced. Polish Prime Minister stated lately that the excessive expansion of officials’ authority envisaged by the reform would be destructive for companies and could lead to job losses for many people. Consequently, he decided to discontinue further work on the PIP reform.
It is worth remembering, however, that abandoning the planned PIP reform does not eliminate the risk – already present under current regulations – of reclassifying contracts with subcontractors as employment contracts. Given the severe consequences of such reclassification (including the obligation to pay overdue social security contributions together with interest, corrections to tax settlements, administrative fines, or the risk of fiscal criminal liability), it is still recommended to review existing civil law agreements and B2B contracts, as well as the actual manner of cooperation with subcontractors, in order to identify potential risks associated with the currently used forms of cooperation.
Agata Netyks-Zych
Manager
