18.04.2024 Labour law

[Poland] Civil law contracts and JDGs counted to seniority?

The Minister for Family, Labour and Social Policy has announced works on changes regarding counting time worked under a civil law contract or sole proprietorship (JDG) to seniority. What does the redefinition of seniority mean for employers?

Seniority in the new way – what are the implications for employers?

The idea put forward by the Ministry of Labour to count periods of work under contract of mandate and sole proprietorship to seniority is expected to result in draft amendments. Such an amendment will, however, require consultation and the development of new solutions. Although currently there is a problem with counting time worked under a civil law contract or JDG, the introduction of new rules may mean, inter alia, an increase in the burden for employers.

It should be recalled that currently, work under a civil law contract (contract of mandate) and sole proprietorship is not counted to seniority, i.e. it does not constitute a period of employment within the meaning of the labour law. A distinction must be made here between seniority and insurance seniority entitling e.g. to pension benefits. This is because in the context of pensions, both those employed under employment contracts and those working under a civil law contract or running a sole proprietorship acquire pension benefits. The exceptions to this rule are persons performing work on the basis of contracts for a specific task.

Counting time worked under a civil law contract or sole proprietorship into seniority will mean the acquisition of employee rights such as, inter alia:

  • leave entitlements,
  • seniority bonus
  • jubilee award entitlement.

For employers, the above solution will result in an increase in the financial burden associated with the acquisition by persons performing work under civil law contracts and JDGs of entitlements currently available to persons employed under employment contracts.

JDG and civil law contracts – statistics

According to statistics, in 2023, the CEIDG register received 302,000 applications for the establishment of a sole proprietorship and 177,500 applications for the resumption of a sole proprietorship. Although there were 2.7% fewer new businesses than in 2022, there were 3% more JDG renewals than the year before. The largest number of sole proprietorships – 30.3 thousand – were established in the Mazowieckie Voivodeship, followed by the Małopolskie Voivodeship with 17.2 thousand new sole proprietorships.

As regards data on civil law contracts, according to the Central Statistical Office, as of 31 March 2023, more than 2.26 million people in Poland were working on the basis of contracts of mandate and related contracts. Among contractors, the share of women was slightly higher than that of men – 51.3%. In addition, mandate contracts were mostly used in the private sector, which accounted for 89.6% of the total number of contractors.

On the other hand, in 2023, 1.2 million RUD forms (specific task contract declarations) were submitted to ZUS, on which 1.6 million contracts for specific tasks were reported. The most frequently reported contracts for specific tasks were those concluded with men – they accounted for 52.21 per cent of the contractors. Moreover, one in four contractors of a contract for specific tasks was a person aged 30-39, and contracts for specific tasks in 2023 were most often concluded for a period of one to eight days.

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