Recent Court Judgments

On-call duty performed by an employee in the place of residence combined with the obligation to be present quickly at the workplace upon an employer's request should be treated as "working time" – European Court of Justice decision dated 21 February 2018, C-518/15

The European Court of Justice concluded that Directive 2003/88/EC of the European Parliament and of the Council of the 4th November 2003 concerning certain aspects of the organisation of working time (the "Directive") does not allow the Member States to maintain or adopt a different definition of "working time" other than the definition stated in the Directive. The European Court of Justice explained that the on-call time that an employee is forced to perform at their place of residence in conjunction with the obligation to be present at the workplace within a short period time following their employer's request (which significantly limits the employee's ability to focus on other matters) should be treated as "working time." The European Court of Justice reiterated that the decisive factor in the qualification of an on-call duty period as "working time" within the meaning of the Directive is the employee's obligation to be physically present at the place designated by the employer and to be at the employer’s disposal, so that the employee can immediately perform the relevant tasks, if necessary. In this case analysed by the European Court of Justice, the employee not only had to be available during the on-call time, but was also obliged to be physically in the place designated by the employer and to appear upon the employer's request within eight minutes. Due to the above restrictions, the analysed situation should be distinguished from the situation of an employee who, during an on-call duty, remains at the employer's disposal only by being available to the employer.

A self-employed contractor considered as an employee after applying for maternity allowance – Supreme Court decision dated 20 November 2018, II UK 711/16

According to the Supreme Court, a self-employed contractor loses their status of being a self-employed entrepreneur conducting their own business activity if the risk connected with any actions undertaken towards third parties in relation to their business activity is borne by the ordering party and the performance of the agreement is carried out under the direction and in a place and time designated by the ordering party. In the analysed case, the complainant within her business activity concluded a "cooperation agreement" based on which she was obliged to provide services in a grocery store under the remuneration paid based on an issued invoice. The complainant performed the typical duties of a shop assistant, those being customer service, collecting and placing orders, and signing invoices. The above services were provided on the ordering party's account in the place of the ordering party's business activity (the grocery shop) under the same manner as the other shop assistants employed under an employment contract. As a consequence of the above, the Supreme Court upheld the decision of the Social Insurance Office in refusing the payment of maternity allowance and determining that the registration of the business activity by the complainant was apparent, the complainant did not actually conduct business on their own account, and consequently could not be subject to compulsory retirement, disability, accident insurance, or voluntary sickness insurance.

Law amendments

Shortening the time period for the storage of employee files and their electronisation

The President signed an amendment shortening the period for the storage of employee files and their electronisation. From 1st January 2019, employers, instead of keeping and storing employees' personnel files in paper form, will be able to choose their electronic form. In addition, from 1st January 2019, employers will only be able to store employee files for a period of ten years, instead of 50 years, counted from the end of the calendar year in which the employment relationship was terminated or expired. Shortening the period of storage of employees' files of persons employed before 1st January 2019 will be possible after the employer submits a special information report to the Social Insurance Office.

Remuneration for work to be paid, by default, into a bank account

From 1 January 2019, the currently applicable principle of the payment of remuneration in cash will change. The default form for the payment of remuneration will now be by money transfer to the employee's bank account without necessity of obtaining employee's consent; however, the employee will always be able to submit an application for the payment of their remuneration in cash.

New legislation works

Employee investment plans (PKK)

The Government is currently working on the creation of employee investment plans, a universal, voluntary and private long-term saving system. The project envisages the creation of PPKs in stages, and their order will depend on the headcount and type of employer. According to the project, in the first stage, i.e. at the beginning of 2019, companies with a headcount of over 250 will join a PPK, in July 2019, employers with headcount of at least 50, in January 2020 employers with a headcount of at least 20 people, and in the final stage, in July 2020 small companies and public finance sector units. The basic contribution paid by employers will be 1.5% of the employee’s gross remuneration, and the contribution paid by the employee will be 2.5%. Both the employee and the employer will be able to increase their contributions to up to 4%. The obligation to participate in a PPK will not apply to employees who have reached the age of 70 at the latest on the first day of employment. Employees who have reached the age of 55 but are under 70 will only be able to join a PPK upon their request. For other employees, participation in a PPK will be by default, but they will always be able to cease saving in the PPK. After reaching the age of 60, employees will be able to pay out 25% of the funds accumulated on the PPK in one instalment, and the remaining 75% of the funds will be paid in 120 monthly instalments over ten years. Employees will be able to decide to reduce the number of instalments and increase the amount paid out, but in this case they would be obliged to pay capital income tax.

Labour Law Codification Commission projects of the new Labour Code and the Collective Labour Code

After 18 months of work, the Labour Law Codification Commission has submitted two projects to the Ministry of Family, Labour, and Social Policy: the Labour Code, and the Collective Labour Code. The main objective of the Commission was to separate the provisions of individual and collective labour law and to provide solutions that minimize employment on the basis of civil law contracts by introducing flexible types of employment contracts for short-term work. The project provides three new types of employment contracts: (i) for the duration of occasional work - concluded for the purpose of performing non-scheduled, or short-term work, (ii) for seasonal work, and (iii) for work without an indication of the time frames addressed to students aged up to 26 and persons 60+. The project also extends trial periods from three months to 180 days. Another important change is guaranteeing 26 days of vacation to all employees regardless of their seniority. The leave should be granted by 31st January of the following year. If the holiday leave is not used within the indicated deadline, the employee's right to use their due holiday leave will expire and the employee will be entitled to compensation from the employer in an amount of twice the holiday pay. The Ministry of Family, Labor and Social Policy has announced that it will not work on the Commission's projects, but some of the solutions proposed by the Commission will be used to work on the government's projects.