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A Resounding Victory for Workers?

ZSP has been campaigning against subminimum wages and for guarantees linked to public tenders for the last couple of years. The government seems to have agreed to some of our postulates and has now announced measures that would affect at least 1.5 million workers on subminimum wages.

Some workers' organizations, for the sake of self-promotion, would loudly celebrate a victory. But our experience has shown that government reform is not always what it says it is. We ask if this is a resounding victory or just the first baby steps, frought with loopholes?

Over the past few years, we have made many actions which have involved companies using subminimum wages and/or providing services to public entities. A large part of our membership falls into this category of worker, which is unique for unions in Poland. To explain the issue, Polish law gives too much leeway for companies to hire workers on civil contracts instead of employment contracts, which offer more protection and benefits. Scandalously, the minimum wage law applies only to workers on employment contracts; some people, many of whom should have employment contracts, have civil contracts only to avoid benefits and minimum wage law. There are people in Poland earning less than 1 euro an hour. Some of these people are working for public entities, through service providers. In the past, such people might have been hired directly by the place they actually work and had work contracts; now they are technically hired by somebody else and don't necessarily have contracts. Such is the position of most cleaners and „security guards” (some of whom are actually used as receptionists) in places like public hospitals or municipal offices.

Unions like the lmpuls workers, whose case was exposed in much detail in the press, or the cleaners at Belchatow hospital, who fought and won against being moved to trash contracts with subminimum wages, were wake up calls for the public, many of whom were unaware at just how many people were exploited in the way. We exposed the fact that public entities were driving down prices for services by demanding the lowest price and awarding contracts to firms with such low bids that they were clearly paying much lower than the minimum wage. Because of this, a huge amount of workers have fallen into debt and need public assistance. They are also threatened by low pensions in the future. A portion of these people are actually already retired but need to work because their pension does not cover their needs.

Since we started our campaigns - first against the subminimum wage, then to set requirements about working conditions in public tenders – the subject has gathered a lot of attention. Various members of government, to whom we sent information and protests, expressed support for our postulates and other unions and some political organizations came up with their own ideas. Now the government has announced an important step – a minimum wage on mandate contracts which, at least in theory, should guarantee that a large group of workers will no longer be subjected to subminimum wages. And probably there should be new public tender procedures. We are waiting for the concrete proposals and probably we will then offer our more detailed comments.

We have long fought against the existence of subminimum wages. Surely many workers will benefit from these changes. However, we have a number of concerns and we can say in advance that, although we welcome these steps in the right direction, they are still not enough.

From our experience, we see that often loudly announced reforms on issues we were campaigning around have fallen short because other changes that need to take place did not happen. Or that they were largely to make people believe something has changed when much as stayed the same. (This is worth discussing in another article.) We think that there are potential problems here and the reforms do not offer all the changes needed. A few points on this issue.

The first major change for workers on trash contracts was that a large part of them (but not all) now have social security payments made by their employers. Before that, they were responsible for paying (or not paying) by themselves. However, most employers simply deducted this from the gross salary. This means that many low-wage earners just took a serious cut in their take home pay.

Of course there is a serious deficit in the social security system, so it is critical that the government crack down on this, but in most cases, it was the workers who paid. (There have been some examples of our organized members – for example some people in Belchatow hospital or some workers at a language school – avoiding these cuts, or of supermarket workers in Bydgoszcz who negotiated higher rates.)

The fact that a lot of workers suffered a severe material loss that worsened their misery through something that was touted as a big advance for them is typical of the fact that the state is looking for solutions that do not encumber capital. As long as workers are not on general strike and keep taking these assaults, the government will come up with solutions that can make the situation worse.

The proposed minimum wage on mandate contracts cannot make the situation worse – but it does not totally solve the problem of mass abuse of mandate contracts. Nor does it tackle some of the important issues of labour precarity.

People who work on mandate contracts still have worse working conditions than those on employment contracts. Here we are talking about paid vacations and other issues. For example, in many public tenders, the employer changes every couple of years.

We also note that these new regulations do not deal at all with false self-employed – in other words, people who are forced to work as independent contractors. These types of workers are common in many fields and the use of this form of „relationship” increased dramatically after the obligations to pay social security on mandate contracts. For example, many language teachers were forced to start businnesses after the introduction of these obligations, so most schools in no way contributed to their social security.

One businessman – boss of cleaners and „security” from lmpel company – pointed out that part of the problem is that the contracting parties don't want to pay more for the services. This is, to a certain extent true in some industries. One example given was lmpel's contract – cleaning the Social Security's office. The boss said that, since he is required to pay this money for the workers, his cost of employment has gone up, so he should be able to renegotiate the contract. But the state offices have cheap budgets, are underfunded and do not provide enough money to hire people according to these standards.

This is where we see that the state has to step up to the bat and allocate more money for public sector employees and also make sure that there are strict obligations for those who oversee tenders – or the whole thing falls through.

We have to remind the public of the situation our people encountered at the muncipal office in the Wola district of Warsaw, in order to see part of the problem. (Those who understand Polish can watch the TV reports on the actions – the reactions of the authorities were completely scandalous.) Companies were contracted by the housing administration in order to make repairs on public housing. They used workers without ever giving them a contract and in the end, a number of people were not paid. We confronted the authorities about many of the details. We asked about how they control the companies that win public tenders. They don't and claim (falsely) that they can't.

In other words, we were told that once a company wins a tender, it can do as it likes. It can even subcontract the whole tender to another company.

Now the government is proposing that in order to win public tenders, the company to render services must offer all people on its mandate contracts a minimum wage. But it does not talk yet about forbidding subcontracting, the use of false „independent” contractors, etc. ln other words, there is still a lot of potential to get around this minimum wage.

Additionally, we understand that contracts for specific work performance are not included in this category. A lot of the jobs contracted through tenders would be of this type.

Other jobs which have the character of typical full-time jobs would fall under the mandate contract. However, we think that the use of these mandate contracts should be limited. We see that the costs of hiring a cleaner directly by the hospital on an employment contract can be cheaper than contracting with outside company – even when factoring in paid vacation. (Of course it is easier to fire people easier with an external service provider.) We prefer then that public institutions practice direct employment, which would be more beneficial.

What we think can happen is that these changes can provide a „justification” for public institutions to outsource even more work.

We have to also note that there is still little help for workers who should have an employment relationship but have a trash contract. The Labour lnspectorate does not really work in this regard, the courts are a joke, as well as the fines for employers who are caught. (They are so low that employers just factor them into their potential costs and keep ignoring the labour code anyway.)

Unless there are some correctives with these other factors, the situation will not be solved entirely and there will still exist ways that employers will get around these changes.

Finally, we cannot end our comments without stating that the proposed minimum for mandate contracts is, like the minimum wage, still far to low compared to the cost of living in Poland. The net payments can hardly cover all expenses of people living in the city and these small salaries contribute to runaway debt amongst the poor working class. With this in mind, and considering the fact that workers on mandate contracts lose other benefits, we think that workers on mandate contracts should be ensured a higher rate of pay and that the minimum wage be raised above the planned levels to become a liveable wage, based on the actual cost of living in large urban areas.

We will comment more when more details about proposed changes are revealed and we will publicize our criticisms. In the meanwhile, we say to all exploited workers in this category is that it is worth organizing and fighting because enough is enough! Ours is a union that is comprised of all categories of worker and is run by the workers themselves – not by union bureaucrats. We can get more accomplished if we join forces together in a union that takes action without compromise.

Contact: ZSP Związek Wielobranżowy