Newsletter

Dear Readers,

In the January issue of our newsletter, we present the most important issues related to family foundation representation, which should be kept in mind when making a donation. We also highlight proposed changes to the Act on Combating Unfair Market Practices related to greenwashing. Finally, we highlight the main assumptions of the draft Act on Internships, which is intended to replace the

current Act on Graduate Internships. 

Enjoy your read,

WBW Team

Donating to a family foundation – how to avoid the pitfalls of representation?

Sebastian Michalak, senior lawyer

One of the primary ways to endow a family foundation with assets – besides contributing them to the founding fund – is through a donation by the founder or those closest to them. A matter that founders sometimes fail to adequately consider is how the family foundation is represented in such an agreement. This issue is particularly significant because the current process of registering family foundations often exceeds 14 months. In practice, this forces founders to contribute their final assets at the stage preceding the registration of the family foundation (at the organization stage). This stage is governed by different rules than for registered family foundations. 

Board member as a donor

The fewest doubts about the principle arise when the donor is a member of the board of a family foundation, and the foundation itself is already registered. Pursuant to Article 63, Section 1 of the Family Foundation Act (FFA), in such an agreement, the family foundation should be represented by a special proxy, appointed by a resolution of the meeting of beneficiaries. This rule also applies when a family foundation has not yet been entered into the register and is in the process of being organized. While it is true that the family foundation is generally represented by the founder, not the management board, pursuant to Article 23, Section 6 of the Family Foundation Act, the provisions on full representation of a family foundation in an agreement with a management board member should be applied accordingly.

Member of the management board is the sole beneficiary

However, the situation is completely different when a donor who is a member of the management board is also the sole member of the family foundation’s beneficiary assembly. Article 63, paragraph 2 of the Family Foundation Act stipulates that in such a case, the family foundation is represented under general principles, but the donation agreement must be concluded in the form of a notarial deed. Importantly, this applies to any donation agreement, regardless of its subject matter, including those where, under normal circumstances, it does not require any special form.

A family foundation in an organization and a founder who is not a member of the management board

In practice, the most interpretative doubts arise when a family foundation is still in the organizational phase, and the donor is its founder but not a member of the management board. Theoretically, there is no basis for applying the aforementioned rules arising from Article 63 of the Foundation’s Charter, as they pertain to representation in the agreement with a member of the management board. However, considering that the family foundation is represented in this phase by the founder, not the management board, a proper application of Article 63 of the Foundation’s Charter suggests that in such a case, the requirements specified therein must also be observed, but with respect to the founder, who, in the case of a family foundation, assumes the role of a management board member in the organizational process.

As you can see, the proper representation of a family foundation when concluding a donation agreement is not always straightforward and requires individual analysis. If you have any questions regarding the representation of your family foundation, please contact our law firm.

Greenwashing as an unfair market practice

Sebastian Michalak, senior lawyer

Greenwashing, or the creation of a false image of a business or product as environmentally friendly, is sometimes classified by the Office of Competition and Consumer Protection (UOKiK) as an unfair market practice under existing regulations. However, according to the draft amendment to the Act on Combating Unfair Market Practices, currently under legislative review by the Council of Ministers, this phenomenon is to be explicitly included in the statutory catalog of unfair market practices. 

Misleading practice

The proposed amendment defines as one of the possible actions that could mislead consumers: a business making environmental claims related to future environmental performance without clear, objective, publicly available, and verifiable commitments specified in an implementation plan. It should be noted that misleading actions are classified as unfair market practices.

Blacklist of unfair market practices

More importantly, the bill expands the blacklist of unfair market practices, which include misleading practices under any circumstances, provided they are identified on the list. In the context of greenwashing, this applies to four types of practices related to:

– displaying a sustainability label that is not based on a certification system or established by public authorities,

– making a general claim regarding environmental performance where the entrepreneur is unable to demonstrate recognised high environmental performance relevant to that claim,

– making claims regarding the environmental performance of the entire product or the entire business activity of the entrepreneur, if they concern only a specific feature of the product or a specific type of business activity of the entrepreneur,

– a claim, justified by offsetting greenhouse gas emissions, that a product has a neutral, reduced or positive environmental impact in terms of greenhouse gas emissions.

In addition to greenwashing, the amendment also expands the catalogue of unfair market practices to include other practices that mislead consumers, such as those related to offering software updates.

Sanctions

Violation of the prohibition on unfair market practices is punishable by an administrative fine imposed by the Office of Competition and Consumer Protection (UOKiK) of up to 10% of the turnover achieved in the previous financial year. Regardless of this, the use of unfair market practices may result in civil law consequences, as specified in Article 12 of the Act on Counteracting Unfair Market Practices.

Work on the draft amendment is marked in the government’s list of legislative works under number UC111.

Draft Act on Internships – the most important information

Sebastian Michalak, senior lawyer

Since November of last year, the Ministry of Family, Labor, and Social Policy has been working on a new draft law on internships. The law is intended to replace the current law on graduate internships and regulate the employment of interns. What are the most important changes introduced by the new law?

Limited scope of application of the Act

The draft law clearly defines an internship as the performance of tasks aimed at gaining knowledge, practical skills, and professional experience based on an agreement between the intern and the internship provider. At the same time, many internships regulated by separate acts are excluded from its scope, such as internships or apprenticeships necessary to practice a regulated profession or undertake or pursue regulated activities (including, among others, adaptation internships for nurses and midwives, postgraduate internships for physicians and dentists). 

Time Limit on Intern Employment

An internship agreement will be valid for a maximum of six months, and a subsequent internship with the same provider will only be possible after 24 months. For comparison, current regulations on graduate internships stipulate a maximum internship duration of three months. Notice period for termination of an internship contract Unilateral termination of the internship agreement will only be possible with a notice period of 7 days for an internship period not exceeding 3 months or 14 days for an internship exceeding 3 months.

Salary and leave

An intern’s salary cannot be less than 35% of the average salary for the first quarter of the previous year. At the same time, it cannot exceed 100% of the average salary. The intern will also be entitled to paid leave. For the first 90 days of the internship, this will be 3 days of leave (1 day of leave for every 30 days of internship completed), and for the next 90 days, 6 days of leave (2 days of leave for every 30 days of internship completed).

Partial protection under the Labor Code

The Act on Internships refers to the application of certain provisions of the Labor Code to internships, thus granting interns the same limited protection as employees. This applies, among other things, to provisions on equal treatment in employment, supervision by the Labor Inspectorate (PIP), remote work, wage protection, and night work, Sundays, and public holidays. 

Work on the draft amendment is marked in the government’s list of legislative works under the number UD307.