Polish premier reverses plan to end 'junk contracts'

WARSAW

Prime Minister Donald Tusk scrapped plans to grant sweeping new powers to the State Labor Inspectorate (PIP), shelving a flagship reform aimed at cracking down on the widespread use of precarious employment contracts, known locally as 'junk contracts.'

Speaking after a coalition meeting in Paris late Wednesday, Tusk said the proposed reform risked granting “excessive authority” to labor officials and could cost jobs.

“Allowing officials to decide how and on what basis people are employed would be highly destructive,” Tusk said, concluding that the government would not pursue the legislation.

The draft bill, championed by the Left, Tusk’s junior coalition partner, would have allowed inspectors to unilaterally convert civil-law contracts and business-to-business (B2B) arrangements into standard employment agreements when workers were deemed misclassified. Employers refusing to comply could have faced court action.

The overhaul also proposed modernizing labor inspections, strengthening data-sharing between state agencies and increasing penalties for breaches of labor law. Supporters said it would help combat what unions describe as rampant avoidance of social insurance contributions and benefits.

But the project ran into resistance not only from business groups, but also within the governing camp.

The bill had already cleared the powerful Standing Committee of the Council of Ministers and was written into milestones tied to EU recovery funds, making Tusk’s reversal more striking.

Labor Minister Agnieszka Dziemianowicz-Bak, who had helped craft the package, said Wednesday she would continue working on alternative tools to reduce the use of ‘junk contracts.’

“We are talking about a pathology that affects the Polish labor market,” she said, insisting the government must protect vulnerable workers, including young employees, gig-economy staff and pregnant women, who can be dismissed at short notice under non-standard contracts.

Poland has one of the highest shares of non-standard employment in the EU. About 20% - 25% of the workforce operates on civil-law, or B2B contracts, rising to 40% among workers under 30, particularly in services, retail and logistics.

Unions hailed the original bill as a long-awaited correction to what they see as systemic abuse of flexible contracts. Business groups counter that flexibility supports job creation and helps firms manage labour costs.

By declaring the matter “closed,” Tusk has bought temporary peace between coalition partners and reassured employers. But the underlying dispute about Poland’s reliance on cheap, disposable labor remains wide open, and the Left appears determined to keep it on the legislative agenda.

WARSAW

Speaking after a coalition meeting in Paris late Wednesday, Tusk said the proposed reform risked granting “excessive authority” to labor officials and could cost jobs.

“Allowing officials to decide how and on what basis people are employed would be highly destructive,” Tusk said, concluding that the government would not pursue the legislation.

But the project ran into resistance not only from business groups, but also within the governing camp.

The bill had already cleared the powerful Standing Committee of the Council of Ministers and was written into milestones tied to EU recovery funds, making Tusk’s reversal more striking.

Labor Minister Agnieszka Dziemianowicz-Bak, who had helped craft the package, said Wednesday she would continue working on alternative tools to reduce the use of ‘junk contracts.’