Employment issues in the construction sector
By Bartosz Wszeborowski, advocate, senior lawyer and Aleksandra Nowacka, paralegal, PCS Paruch Chruściel Schiffter Stępień Kanclerz | Littler
The nature of the construction sector means that the relationship between employer and employee is quite different to that found in office work! We take a look at the specific issues that of most concern to employers in construction. Even if you are a client of a construction firm, these are all worth having in mind.
Illegal work – what are the risks?
In the present climate of recession, soaring inflation and high energy cost, the building industry is suffering as well. In this sector, it is commonplace to employ people off-the-books. It is estimated that about 75% of construction workers in Poland are working in the black economy. Unfortunately, there are no indications that this will change.
Working off-the-books often means cost savings for the employer. However, this is only an illusion. If people were found working illegally, both the employer and the employee would bear the consequences, though, the employee to a lesser extent. With the enactment of the Polski Ład (‘Polish Deal’) regulations in 2022, an employer who was found to have taken on workers off-the-books would have to pay them a minimum monthly salary in addition to what they have already paid them for every month of hiring without a contract.
Other penalties for non-compliant employment practices include:
- a fine between 1,000 and 30,000 złotys for not providing an employee with a written employment contract or entering into a contract based on the Civil Code instead of an employment contract
- a fine of up to 5,000 złotys, community service, attachment of earnings or imprisonment of up to two years (if the violation of employee rights is considered malicious or persistent) for failure to pay social security contributions for an employee
- a fine of up to 720 day-units (where one unit is not less than one-thirtieth of the statutory minimum monthly salary) and/or community service, attachment of earnings or imprisonment of up to three years if the employer is found guilty of a tax offence.
The Polish Deal also covered the issue of paying employees off-the-books, which in Poland is known as “paying under the table”. If any irregularities are found, only the employer will face consequences. It is the employer, not the employee, who will have to pay due tax on any payments made off the records. Those rules apply to employees and employers in the construction industry as well.
How to determine an employee’s place of work?
Frequent site switching is given in the building industry, making it sometimes difficult to determine a worker’s permanent place of work. Establishing the place of work can be approached in different ways.
The first method is to determine the place of work based on a geographical point or a specific address. It is used for employees who work at a fixed place, for example, an office or a store. The second way is to determine a certain geographic area where the employee will work. This is most often applied to mobile workers who move within the designated area. According to the majority of Polish judicial decisions, such an area is not only the employee’s place of work under Article 29(1)(2) of the Polish Labour Code but also a permanent place of work within the meaning of Article 775(1) of The Polish Labour Code. What follows is that a mobile employee is considered to be on a business trip only if requested by their employer to perform a task outside the area set out in their employment contract and their place of work is changed only temporarily, by defining the place of work as mobile or movable.
Notably, construction workers are a separate group of mobile workers. It is because they often move around a certain area, but stay in various locations (usually for construction projects) for specified periods. Applying the mobile place of work solution works well for such employees. To successfully use it, the employment contract should outline a specific area of the employer’s operations and set out the employee’s place of work as the construction sites defined in the contract. However, if the construction projects carried out by the employer are concentrated mostly in one area of the country, for example, in a few voivodships, it is recommended to narrow down the place of work to these regions.
Construction workers are at a high risk of work injury because this industry comes with some inherent risks ad hazards. An accident at a construction site may be one of many examples of an accident at work. The statutory definition of an ‘accident at work’ under the Polish Labour Code is relatively broad.
The first step to avoid an accident at work is to comply with the basic employer duties, including compliance with health and safety regulations. Before an employee is allowed to work, the employer must provide them with occupational health and safety (OHS) training and make sure that the OHS training is repeated at statutory intervals. The employer should also receive the training necessary to perform their duties concerning workplace safety.
However, the question of liability for an accident at a construction site is not that simple and clear-cut because of a plethora of applicable regulations. Depending on circumstances, the liability may go to an employer, construction manager, designer, investor, employees or even third parties. Notably, criminal liability for a construction-site accident is far from being straightforward. The legal ramifications will depend on many factors, such as the degree of negligence and the seriousness of the accident consequences.
As a side note, larger construction projects in Poland tend to be safer for workers compared to smaller ones. According to the PIP, the Polish national labour inspectorate, small construction sites are related to more accidents and occupational risks. According to Statistics Poland, in Q1 2021 alone, there were 572 reported accidents at construction sites, including eight fatal and 10 serious ones. The average period of inability to work for a person injured in a construction-site accident was 38 days, whereas the average for other industries is 27 days.
Seconding workers to other EU countries
As mentioned before, construction workers belong to the group of mobile workers. This means that their place of work is not permanent and they are often relocated to different sites, depending on the location of the construction project. The secondment of a construction worker very often involves moving an employee to work abroad.
A short-term secondment of up to eight days in a year is rare in the construction industry. Due to the nature of construction projects, the secondment is often longer than 12 months (or 18 months, provided that there are important reasons and the host country is notified about them). The employer must ensure that long-term secondees work under the same terms and conditions of employment as the host country workers, apart from additional pension benefits and contract termination terms and conditions.
Secondment of construction workers abroad also entails compliance with salary and annual leave requirements.