Social partners sign social pact declaration

The aspiration to draw up a new social pact with the social partners represents a central priority for the current government, led by Prime Minister Jarosław Kaczyński. Nevertheless, the project has failed to move beyond the initial stage of discussions for a considerable period of time. In recent months, however, some progress has been made on this issue, culminating in the signing of a declaration concerning the commencement of work on the social pact in April 2007.

At the beginning of its term of office, the current Polish government announced that it would be building a new form of government, designated the Fourth Republic. Among the pillars supporting this structure would be a new social pact. As the Polish President, Lech Kaczyński, outlined, the social pact would define, for at least several years to come ‘the means of distributing the fruits of our joint labours. Poles must know what they can expect of the state in their capacity as consumers, as employees, as employers.’

Social pact talks

Execution of the social pact has, however, proved arduous over the past 16 months, even though intensive debate on the subject has continued.

In late January 2007, a conference entitled ‘Social pacts – A chance for success’ was organised under the auspices of the Polish government. The aim of this event, which brought together government representatives, the social partners and members of the academic community, was to explore the history of national social pacts in Poland and in other countries, as well as review progress made to date in relation to Poland’s new social pact.

Government position

During the conference, government representatives reiterated the major role to be played by the state. In their opinion, it is the state which usually initiates talks, presents a working agenda and recommends solutions to specific issues; perhaps most importantly, the state is responsible for the actual implementation of these solutions.

In relation to this latter area, the government guaranteed its commitment to such responsibilities; however, this issue appears to have raised the greatest doubts among the social partners.

Reservations of social partners

Some trade union activists believe that the present government ‘can’t guarantee anything to us really. They can’t even guarantee anything among themselves’.

A representative of the Independent and Self-Governing Trade Union Solidarity (Niezależny Samorządny Związek Zawodowy Solidarność, NSZZ Solidarność) contends that:

The social pact should be negotiated with representatives of the president, because only the president guarantees stability and continuity of power over five years... As far as NSZZ Solidarność is concerned, in the political upheaval of today, it is safest to make such agreements with none other than the president.

Many representatives of the various social partners seem to view the social pact – or, indeed, social dialogue in general – as rhetoric devoid of real meaning.

Social pact declaration

The social pact concept is outlined in the declaration on accession to negotiations regarding the agreement, which is defined in terms of the slogan ‘economy – work – family – dialogue’. This declaration was signed in early April 2007 by Prime Minister Jarosław Kaczyński and by leaders of the country’s largest trade union organisations, the Forum of Trade Unions (Forum Związków Zawodowych, FZZ), NSZZ Solidarność and the All-Poland Alliance of Trade Unions (Ogólnopolskie Porozumienie Związków Zawowodych, OPZZ). On the employer side, the signatories comprised representatives of the employer organisations the Business Centre Club (BCC), the Confederation of Polish Employers (Konfederacja Pracodawców Polskich, KPP), the Polish Confederation of Private Employers ‘Lewiatan’ (Polska Konfederacja Pracodawców Prywatnych Lewiatan, PKPP Lewiatan) and the Polish Craft Association (Związek Rzemiosła Polskiego, ZRP).

The declaration provides that:

Adopting as a paramount objective of these negotiations the increasing wealth of society at large and reduction of poverty and social exclusion by way of rapid and sustained economic growth ..., the signatories of this Declaration hereby expressed their shared desire to commence, as of 3 April 2007, negotiation of the Economy – Work – Family – Dialogue social pact.

Regulatory objectives

The envisaged social pact aims to regulate, among other issues:

• mechanisms for the creation of new jobs, employment policy and labour market institutions; this includes detailed regulations with respect to activation measures for unemployed persons and in relation to fostering their entrepreneurial skills, along with measures concerning the modernisation of Poland’s employment services, job security and flexibility;

• conditions for social and economic growth – improving the quality of legislation; simplifying the relevant procedures; streamlining operation of the commercial courts; providing support for research and development; developing new technologies; and creating a modern transport infrastructure;

• social security issues, including with regard to bridge benefits paid out before the attainment of full pension rights (early retirement benefits); defining the terms of pension payments obtained from the Open Pension Funds; and the gradual introduction of greater flexibility to the rules governing the retirement age of women and men;

• implementation of family-friendly policies – institutionalising modern forms of care for young children; ensuring equal education opportunities for children; and resolving problems regarding alimony funds.

Other issues falling within the scope of the proposed social pact include: healthcare, such as setting the remuneration for medical workers and guaranteeing care services for persons unable to function independently; and social dialogue and social partnership. Among the aims in the latter areas are to increase the role played by charities, voluntary and non-governmental organisations (the ‘third sector’) in social services; reform the Regional Social Dialogue Commissions (Wojewódzkie Komisje Dialogu Społecznego, WKDS); and provide for local social pacts.

Differing aspirations of social partners

According to the adopted schedule, the social pact is due to be signed by the end of 2007. However, the initial reactions of the social partners seem to suggest that this deadline may be difficult to maintain. Statements made by the individual social partners to the press point to certain ideological differences which may be hard to reconcile within such a relatively short period of time.

The employers are hopeful that the new social pact will curtail the level of early retirement, increase the retirement age for women, reduce payroll taxes and introduce flexible ways of retaining and remunerating employees.

For their part, the trade unions would like to see the social pact improve employee protection rights, render the early retirement system more favourable to employees, improve protection measures safeguarding the remuneration and collective agreements system, and provide better working conditions for healthcare and educational workers.

Social pact priorities

Employers seem to attach the greatest importance to maximum freedom in shaping employment policy. They expect that the social pact will reduce, to the bare minimum, limitations on flexible employment forms, working time and collective redundancies.

The employer organisation PKPP Lewiatan emphasises that it has always supported the idea of a social pact – understood as an agreement between employer organisations, employees and the government, in the interests of faster, long-term economic growth and the resolution of social problems – and that it continues to do so. At the same time, the employers are hopeful that, as long as the social pact is being debated, the government will refrain from submitting to parliament draft legislation dealing with areas covered by the pact – as it has done in the past. Such restraint, they believe, would create a more favourable environment for open negotiations, free of legislative pressures. The employers find it difficult to conceive how they can negotiate on an issue covered by a bill that is currently being pushed through parliament.

The trade unions, meanwhile, take the view that, in the context of relations between employers and employees, the latter are always in the weaker position and, accordingly, warrant greater protection. In their opinion, the best means of ensuring such protection is through transparent and comprehensive legislation. In one interview, the Chair of the National Commission of NSZZ Solidarność, Janusz Śniadek, outlined that:

We believe that the social pact is needed for the fair distribution of benefits attained through economic growth, for combating social exclusion, and for cultivating a feeling of safety among the employees. While everybody declares a pact to be necessary, everybody has something slightly different in mind. Employers want a diminished ‘tax wedge’, in other words they would like to transfer some labour costs to the state; they would also like the Labour Code to be made even more flexible. The unions may be willing to go along with the employers as far as the ‘tax wedge’ is concerned, but they expect a curtailing of pathologies and of unfair competition – they want work standards to be abided by. We can offer a tentative ‘yes’ to the commencement of negotiations, but on the condition that employees are assured greater security.

At the same time, Mr Śniadek emphasised that the most important goal should be to start the social pact process in the first place, particularly given that the current macroeconomic indicators imply a more favourable climate for debating controversial topics, such as the regulation of self-employment.

Thus, it appears that all of the social partners share a desire to commence work on the social pact as soon as possible.

Commentary

Recent media reports indicate that the Ministry of Labour and Social Policy (Ministerstwo Pracy i Polityki Społecznej, MPiPS) has drafted a finished outline of the main premises of a new statute regulating bridge benefits. Specifically, the authors of this legislative draft would like to significantly limit the number of people eligible for pre-retirement benefits, arguing that the system in its current form places too much pressure on the national budget.

If the government had hoped for support from the trade unions in relation to the social pact, this draft statute may weaken such support considerably. These proposals may also come as a disappointment to the employers, who had called for the suspension of legislative work on issues falling within the scope of the social pact.

Rafał Towalski, Institute of Public Affairs (ISP)