Labour Law Policy in Poland After the Beginning of the Economic Crisis. Labour Market Segmentation and Infringements

The aim of the project is to analyse the manner in which the Polish government conducts labour law policy after the beginning of the economic crisis, and to evaluate the results of this policy from the perspective of labour law infringements and labour market segmentation, i.e., the increase in the number of workers employed on non-standard contracts. Discourses on types of labour law policies pursued after the beginning of the crisis are dominated by interpretations speaking of the "liberalisation" of labour law and labour markets to restore their balance and rebuild investor confidence. I seek to argue that Polish labour law policy does not follow a simple logic of "liberalisation" but presents a more complex picture. In response to the crisis, the government made code-based contracts more flexible. Concurrently, a policy of significantly increasing the minimum wage was initiated, which contributed to an increase in the number of workers on atypical contracts (i.e., labour market segmentation), as not all employers were willing to accept increases in labour costs and pushed workers outside the scope of protection of the Labour Code, onto so-called "junk contracts" (civil law contracts to which minimum wage provisions do not apply and which are significantly more flexible). Employers also try to balance increased labour costs or unstable demand after the crisis by infringing labour law. Due to the increase in segmentation, a new strategy of stiffening atypical contracts was adopted. The project consists of three parts. In the first part, I seek to identify the role of labour law in Poland using the theoretical framework of the "varieties of capitalism" approach, which attempts to conceptualise and generalise different institutional models of given economies based on their comparative advantages. According to this approach, Poland belongs to the so-called dependent market economies, specialising in the global division of labour in industrial production and the outsourcing of low value-added goods and possessing a comparative advantage in cheap, educated labour that can be easily adapted to changing demand and new production methods. Within the paradigm of varieties of capitalism, Poland does not need to have very flexible labour law, but it needs regulations that allow employers to easily adjust employment levels to fluctuating demand. In the second part of the study, I will use statistical methods to examine public data on labour market segmentation and analyse, based on data from the Labour Inspectorate and the Central Statistical Office, which enterprises commit labour law infringements, in which sectors they operate, and what is the nature of these infringements. In the third part, I will try to show how the development of labour market segmentation and the increased frequency of certain types of labour law infringements are a way for employers to balance increases in labour costs resulting from labour law policy and demand instability. Since the crisis represents a threat to growth dynamics, and entrepreneurs operating in Poland do not have institutions allowing for innovation (low level of investment, low expenditure on research and development), they must seek ways to maintain cost competitiveness to remain generally competitive. The study is important for several reasons. Firstly, it will advance the ongoing debate on the precariousness of employment conditions in Poland and explain that workers performing work on atypical contracts not only have, as previous studies indicate, less employment stability, lower wages, and limited access to the credit system and social insurance, but also more frequently encounter labour law infringements. This means that widespread labour law infringements should be added to our understanding of labour market segmentation. Secondly, the study will show that the adopted trajectory towards unifying code-based and non-code-based contracts, increasingly understood as moving towards a single contract (instead of a multitude of contracts on the basis of which work can be performed, which allow for segmentation), cannot achieve its goal if employers in any case "flexibilise" employment relationships through labour law infringements. For this policy to achieve its objective, a better degree of compliance with labour law must be ensured. The Labour Inspectorate constantly points out that it does not have effective tools to combat infringements of rights arising from the Labour Code. Thirdly, the project will enable showing labour market segmentation and related labour law infringements as structural problems of the Polish economy caused by the fact that its main comparative advantage is low labour costs. If Poland wants to compete on labour costs, raising the minimum wage, introducing better worker protection, and improving working conditions, or other actions causing labour cost increases in any way, will trigger reactions aimed at maintaining comparative advantages, such as, among others, labour law infringements. If one wants to think about a sustainable, long-term policy that can ensure greater employment stability, higher wages, and better compliance with existing regulations, other comparative advantages should be sought.