Newsletter

Dear Readers,

in the August edition of our newsletter, we draw attention to ongoing legislative work concerning the inclusion of periods of professional practice under civil law contracts and self-employment in the calculation of length of service. We also present the most important changes for creditors provided for in the amendment to the Restructuring Law, which is awaiting the President’s signature. In addition, we signal the commencement of ministerial work on the amendment to the Act on the National Labour Inspectorate, which is to grant the PIP the power to determine the existence of an employment relationship.

Enjoy your read,

WBW Team

Are civil law and B2B contracts included in the length of service?

Daria Pawlak, lawyer

Purpose of the changes

Under the current legal system, it is not possible to include periods of employment based on a relationship other than an employment relationship in the length of service. In practice, this means that persons performing their profession on the basis of a contract of mandate or self-employed persons running a sole proprietorship are excluded from the possibility of building up length of service. In order to eliminate this situation, a draft amendment to the Labour Code has been submitted to the Sejm, which extends the list of periods counted towards seniority. The draft is currently at the legislative stage in the Sejm committee under print number 1548.

Proposed changes

The draft amendments provide for the inclusion in the length of service of, among other things, the period:

– running a sole proprietorship by a natural person,

– suspension of sole proprietorship by a natural person for the purpose of personal care of a child for whom pension and disability insurance contributions have been paid,

– work performed on the basis of a contract of mandate and a contract for the provision of services,

– performance of an agency contract,

– a period spent abroad other than for gainful employment.

Importantly, the above-mentioned periods of employment will be confirmed on the basis of certificates issued by the Social Insurance Institution (ZUS).

As of the date of entry into force of the amendment, persons employed in the manner specified above may acquire employee rights resulting from the addition of the above periods from the past to their length of service, e.g. a person employed under an employment contract who previously performed work under a contract of mandate may be entitled to longer holiday leave or a longer notice period. The condition for the effective addition of such periods to the length of service is that they must be documented by the current employer within 24 months of the date of entry into force of the Act.

Entry into force

The draft amendments to the Labour Code provide for a sufficiently long vacatio legis period to allow employers to amend their internal regulations and make the necessary calculations to determine the length of service of their current employees. The new provisions will enter into force on 1 January 2026, but in relation to employers who are not public finance sector entities, they will only apply after 6 months from the date of publication of the Act. 

Important changes for creditors in restructuring proceedings

Sebastian Michalak, lawyer

A draft amendment to the Restructuring Law and the Bankruptcy Law, implementing Directive (EU) 2019/1023 of the European Parliament and of the Council of 20 June 2019 (the so-called Second Chance Directive), has been submitted to the President for signature. The key changes concern the introduction into restructuring law of a creditor satisfaction test and the so-called cross-class cram-down mechanism for the approval of arrangements. The draft was the subject of legislative work in Parliament under print number 1263.

Creditor satisfaction test

The new Article 10a of the Restructuring Law will introduce an obligation for the supervisor or administrator to prepare a satisfaction test to give creditors a comparison of whether they will obtain higher satisfaction in restructuring proceedings assuming the continuation of the debtor’s operations or in the debtor’s bankruptcy and liquidation of its assets. The obligation to prepare a satisfaction test will not apply only to debtors who are micro-entrepreneurs.

Cross-class cram-down

Another issue worth noting is the change in the procedure for voting on an arrangement by creditors, referred to in Article 119 of the Restructuring Law. Until now, individual creditors representing a significant portion of the total claims have played a very important role in voting on arrangements, as in practice, the adoption of arrangements required a two-thirds majority of the total claims. The amendment is intended to lower this threshold to half of the total amount of claims, placing the interests of the majority of creditors, with particular emphasis on creditors with a higher degree of satisfaction, at the forefront.

Entry into force

The proposed amendments will enter into force within 14 days of the publication of the Act.

Will the National Labour Inspectorate be able to decide on employment relationships?

Antonina Godlewska, paralegal

Since July, the Ministry of Family, Labour and Social Policy has been working on amendments to the Act on the State Labour Inspectorate. One of the key areas of change is to strengthen the powers of the State Labour Inspectorate (PIP), which will significantly affect the situation of employers and the rules for qualifying civil law contracts. The draft law is scheduled to be adopted at the end of August, with the changes coming into force at the beginning of 2026.

Employment relationship according to the Labour Code

According to the Labour Code, the characteristics that qualify a relationship as an employment relationship are: performing work under the direction of an employer, the obligation to work at a specific place and time determined by the employer, continuity of employment, personal performance of work, and entitlement to remuneration for the mere fact of performing work.

The PIP inspector will decide on the employment relationship

The most important change planned in the draft is to grant PIP inspectors the power to issue administrative decisions transforming civil law contracts into employment contracts if the nature of the cooperation indicates the existence of an employment relationship. PIP inspectors will be able to independently assess whether a given relationship meets the above conditions of the Labour Code and, if irregularities are found, issue a binding decision.

Importantly, these decisions may have retroactive effect, which has serious financial consequences for employers, including the need to pay outstanding social security contributions, taxes and possible accounting adjustments.

Risks for employers

The planned changes entail risks for employers, such as increased employment costs, the above-mentioned retroactive contribution arrears, as well as sanctions and fines – the Labour Code provides for penalties for incorrect forms of employment, and failure to comply with PIP decisions may result in administrative enforcement.

The new powers of the PIP are intended to improve working conditions and reduce employment irregularities, but for many employers they mean a need to thoroughly review their cooperation model and pay greater attention to documentation.