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Collective labour agreement

Autonomous source of law - Characteristic feature of Labour Law, as a branch of law, are famous ‘autonomic sources of law’. They are issued not by state institutions, which the Constitution of Poland equipped in standard setting authority, but by an agreement between the parties. ‘When said about Labour Law’ – states article 9 § 1 of L.C. – ‘it is said about Labour Law regulations and regulations of other laws and executive acts, which define rights and duties of employees and employers, as well as provisions of collective labour agreements and other agreements based on the act of collective agreements, regulations and articles of association specifying rights and duties of the labour relation parties’.

This is a so called codified definition of labour law expressed in a special way. It follows that, except for a code, acts, regulations and international agreements in this branch of law, the sources of law are also the acts of autonomous labour law. These are:

  • collective labour agreements, that is agreements concluded between trade unions and employers or employers unions. They do not have a common character, they encompass employees of one employment establishment or groups of establishments, involved in the collective agreement;
  • collective labour agreements, concluded by employers and trade unions as well, e.g. during collective dispute settlement or redundancy;
  • regulations which settle the code of conduct, organization in employment establishment, and specify the rights and duties of employee and employer. These are e.g. rules of procedure and remuneration rules;
  • articles, that is in-house acts which specify labour relations in a given employment establishment.

Provisions included in the above-mentioned acts are the equivalents of the Labour Code and other laws which define rights and duties of employers and employees.

The Rule of Advantage

The other very important attribute of Labour Law is the rule of advantage specified in sections 2 and 3 of the Article no. 9. According to the rule, the provisions of the autonomous labour law cannot be less favourable for employees than the regulations of the Labour Code and other executive acts. That means that the provisions of the collective labour agreements, rules and regulations, and articles of association cannot be less favourable for employees than specified by the labour law. Moreover, regulations and articles of association based on collective labour agreements and other agreements cannot be less favourable than acts of labour law which are those agreements’ basis. That means that the autonomous sources of law can grant more rights to employees than provided by certain acts. Of course that rule refers exclusively to employees – in no case to employers.

The rule of advantage, with reference to employment contracts, is specified in Article 18 of Labour Code. ‘Provisions of employment contracts as well as other acts, which provide the conditions of employment relationship, cannot be less favourable to employees than provided by labour law’. The standards of labour law specify the inalienable minimum entitlements vested in employees. The contractual provisions which breach that rule and are less favourable for employee that the standards of law are invalid. It is assumed that this kind of contracts do not lose their legal significance entirely, but only those standards which are less favourable for employee are automatically replaced by appropriate regulations of labour law. Of course the parties of the agreement may extend employees rights e.g. by extending the length of leave or period of notice they are entitled to (‘Stipulation in the indefinite period employment contract concerning 12 month period of notice by the employment establishment is admissible by virtue of the Article 18 § 2 of L.C.’ – the resolution of the Supreme Court of 9 November 1994, file ref. No. I PZP 46/94).

Parties of the collective labour agreement

Collective labour agreement is a normative agreement, which is a source of labour law and is concluded by a trade union organization as one party, and employer or employers as the other party. The party of a collective labour agreement, instead of employer, can also be a competent minister, president of the city, mayor or commune head. As far as the collective labour agreement regulations are concerned, the article 238 of L.C. includes the following definitions:

  • a multi-establishment trade union organization – a trade union organization which is a nation-wide trade union, a federation of trade unions or a nation-wide confederation of trade unions;
  • a trade union organization representing employees – a trade union organization composed of employees, for whom the agreement is concluded. That also applies to a federation of trade unions, composed of such trade union organizations, and a nation-wide confederation of trade unions composed of such trade union organizations or federations of trade unions.

The content of the collective labour agreement consists of normative provisions (which apply to the parties of the employment relationship) as well as obligation provisions (which define the mutual relations of both parties). The content of the collective labour agreement will be discussed later on in this article. Collective labour agreement must not violate rights of third parties.

There is a rule which states that the collective labour agreement is concluded for all employees hired by employers covered by an agreement (Art. 239 L.C.). Nevertheless, there are exceptions to that rule: collective labour agreement covers also persons who provide services on different basis than employment relationship (e.g. concluded a civil-law contract) as well as retirees and pensioners. There is also a possibility that the collective labour agreement does not cover part of the employed workers – this refers to a situation of two different agreements in one employment establishment. It can be a situation when e.g. one agreement covers all mine workers, and the other one – exclusively those working underground. It is unacceptable, if there is a group of employees excluded from the collective labour agreement in an employment establishment included in that agreement (however, there is an exception to the rule – it concerns persons, who manage the employment establishment on behalf of the employer). That situation shall be deemed as violation of the prohibition on discrimination in labour relations. That classification would be particularly justified, if the provisions of collective labour agreement were more favourable to employees than the regulations of the Labour Code, e.g. if they provided for longer employee’s leave of absence or shorter working hours.

An agreement cannot be concluded for (Art. 239 § 3):

  • members of the civil service corps;
  • employees of State offices employed by nomination and appointment;
  • self-government employees employed by election, nomination and appointment in:

a) marshals’ offices;

b) poviat starosties;

c) gmina offices;

d) offices (or its equivalents) of unions of territorial self-government units;

e) offices (or its equivalents) of administrative units of territorial self-government

units;

  • judges and public prosecutors.

The content of the collective labour agreement

As it was mentioned before, an agreement should provide for: the terms of an employment relationship’s contents (normative provisions), and mutual obligations of the parties to the agreement (obligation provisions). Moreover the content of the agreement can include other provisions in the area of labour law.

The normative provisions of the collective labour agreement are the autonomous labour laws, which develop the content of the employment relationship, completing common standards of that law. In particular, the normative provisions concern employees’ rights. The content of the normative provisions provide for:

  • employees’ remuneration,
  • employees’ benefits,
  • terms of working hours,
  • terms of the leave of absence,
  • additional employees’ rights (e.g. extra leave of absence),
  • regulations concerning health and safety at work etc.

The most important of the above mentioned elements, the basic subject of the collective labour agreement regulations are remuneration for work and other employees’ benefits. Therefore the collective labour agreement includes usually the following elements:

  • components of remuneration,
  • remuneration scale,
  • table of remuneration,
  • service premium,
  • jubilee awards,
  • allowance in kind (e.g. coal allowance).

Moreover the normative provisions include employees’ duties.

The following part of the collective labour agreement specifies the obligation provisions – that is mutual relations in the agreement, including those concerning the agreement application and its terms obedience. That refers among others to the manner of publication of the agreement, the procedure for periodic assessment of the agreement function, the procedure for explaining the provisions of the agreement and for disputes settlement between the parties in that respect, costs of the specialist’s analysis etc. The obligation provisions can be settled according to their choice.

The third part of the agreement specifies other matters, in particular these are issues related to employer’s duties towards staff as well as other employee’s entitlements, on condition they are not provided by the labour law. The above mentioned refers to e.g. regulations concerning trade unions’ entitlements, social security issues or those connected with the system of adult education.

Conclusion of the Agreement. Negotiations

Conclusion of the agreement is reached by negotiations between a trade union organization or organizations, which represent employees, and an employer (Art. 2412 L.C.). the Labour Code settles the basic terms of conducting that negotiations in order to conclude or change the collective labour agreement.

Initiative of a collective labour agreement conclusion can be put forward by an employer, employers’ union or a competent trade union organization. In the last mentioned case a subject, which puts forward an initiative of agreement conclusion, is obliged to notify the other trade union organizations for the purpose of their joint action and representation (Art. 24125 L.C.). The other party must not refuse entering the negotiations on condition that the request to enter the negotiations was notified later than 60 days prior to the termination of the agreement (in case of definite period agreements) or after the day of its termination (in case of an indefinite period agreements).

Each party is obliged to conduct negotiations in good faith and with respect for the legitimate interests of the other party (Art. 2413 § 1 L.C.). This means in particular an obligation to keep common sense and moderation in finding a compromise. The collective labour agreement is always a result of concessions made by both parties who have opposite interests as a rule. The clause of good faith refers also to respecting the interests of employees to whom the agreement does not apply.

An employer shall be obliged to provide for genuine information on their economic situation, necessary to conduct negotiations. The representatives of trade unions are obliged to keep a secret of any information obtained from the employer, within the meaning of the provisions on suppressing unfair competition. Furthermore, parties have a right to use expert support.

An agreement is concluded exclusively in writing. The Labour Code provides two possible types of agreements considering their period of validity: for an indefinite or definite period. The range of the agreement depends on the level on which it was concluded. The agreement can be changed and modified. Such change is done by the additional protocol. The procedure of changes is analogous to the procedure of the conclusion of the agreement. The collective labour agreement is terminated (Art. 2417 L.C.):

  • upon a joint declaration made in writing by the parties;
  • upon the expiration of the validity period of the agreement (in case of definite period agreements, which have not been extended);
  • upon the expiration of the validity period of the agreement, issued in writing by one of the parties.

The period of notice to terminate the agreement amounts to three calendar months, unless the parties decide otherwise in the agreement. The parties can extend that period when concluding the agreement.

An agreement should be registered in the register of agreements. The register is kept for multi-establishment agreements by the minister competent for labour, for intra-establishment agreements – by the competent district labour inspector. An agreement should be registered within one month from the day of submitting application for registration. Before the agreement’s entry in the register, the agreement must be examined whether the provisions of the agreement are in conformity with law. The parties of an agreement, whose application of agreement’s registration met with a refusal, have a right to appeal to the court. The collective labour agreement must be registered in order to become effective. An employer is obliged to notify the employees of an agreement’s coming into effect, termination, of its content and amendments.

Agreement on the collective labour agreements    

Agreement on the collective labour agreements concerns subjects which are not its parties, but decide to apply to it. This refers to e.g. a situation, in which a trade union organization of one agreement or a trade union federation of a given field of economy by employer’s approval decides to apply to the collective labour agreement concluded in the other establishment or a similar sector of economy.

Multi-establishment collective labour agreement

Multi-establishment collective labour agreement can conclude (that have a legal capacity to conclude it):

  • by employees: statutory organ of the multi-establishment collective labour agreement;
  • by employers: statutory organ of the employers organization.

Both party representing trade union and employers’ organization are entitled to put forward an initiative to conclude such agreement. It should be stressed that a given organization, by putting forward an initiative, automatically becomes a party of the agreement. An initiative can be put forward even in a small-size trade union organization, whereas a representative trade union organization can conduct negotiations and become a party of the agreement.

Large number of trade union structures in specific sectors of labour is a typical situation. Therefore the Labour Code specifies the procedures according to which negotiations concerning multi-establishment collective labour agreement are conducted, and settles two types of negotiations (Art. 24116):

  • negotiations, which take part in all trade unions representing employee of a specific level – in that case trade unions can conclude a common representative organization which becomes an organ entitled to conduct negotiations or act in collaboration;
  • negotiations, which parties are exclusively representative trade unions.

According to article 24117 of L.C. a representative trade union organization is a multi-establishment trade union organization:

  • which is representative within the meaning of the Act on the Tripartite Commission for Social and Economic Matters and voivodeship commissions of social dialogue,

or

  • which consists of at least 10 percent of the total number of employees to whom its statute applies, but not less than ten thousand employees,

or

  • which consists of the largest number of employees for whom the multi-establishment agreement is to be concluded.

The organizations which apply to the above requirements, must file an application for a declaration proving its representativeness with the court.

Intra-establishment collective labour agreement

Parties in the establishment collective labour agreement are employer and trade union organization. The employer can be a natural person, a legal person or organizational unit without legal personality, if it does not employ workers. Establishment’s organizational unit can be both an independent trade union organization which associates at least 10 employees and the unit of the trade union including multi-collective structures.

Both employer and establishment’s trade union organization are entitled to put forward an initiative of concluding an agreement. If there is more than one organization like that, then the negotiations are conducted either by a common representation or by all trade union organizations working altogether. The representative trade union organization is (Art. 24125a of L.C.):

  • trade union organization which is a organizational unit or a member organization of a multi-establishment trade union organization, on condition that it associates at least 7 percent of employees of a given employer,

or

  • organization which associates at least 10 percent of employees of a given employer.

According to the rule of advantage, the provisions of the establishment’s collective labour agreement cannot be less favourable for an employee than the provisions of the multi-establishment collective labour agreement. Therefore, multi-establishment collective labour agreement is a general agreement, whereas intra-company collective labour agreement – specifies the provisions of the general agreement. Provisions of the intra-company collective labour agreement, which are less favourable than the provisions of the multi-establishment collective labour agreement by the law, are invalid and are a basis to a refusal to authorise the agreement.

Suspension of the establishment’s collective labour agreement function

According to Article 24127 of L.C. there is a possibility of temporary stay to apply establishment’s collective labour agreement. The purpose of this organization is to avoid or limit the number of redundancies for reasons concerning employer, who is in poor financial condition.

Both employer and a trade union organization can put forward the initiative of agreement which suspends the function of the collective labour agreement. The suspension allows:

  • to limit the employees entitlements defined by the intra-company collective labour agreement;
  • to limit the employees entitlements defined by the multi-establishment collective agreement, if they were included in the agreement.

Suspension of the agreement function is temporary and cannot exceed 3 years period. When it is finished, employees entitlements, referring to collective labour agreement, are automatically put back in force by the law.

Sławomir Krenczyk

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