Sołtysiński Kawecki & Szlęzak
Established in 1991, SK&S is one of the leading law firms in Poland. SK&S employs currently over 120 attorneys and provides highest standard legal services in all areas of business activity. Combining theoretical reflection on law (SK&S employs several past and current academic authorities on Polish law) with a focused emphasis on practical solutions, SK&S is uniquely qualified to deal effectively with the most complicated legal issues present in complex business transactions.
The Act of 27 October 2017 amending the Personal Income Tax (PIT) Act, the Corporate Income Tax Act and the Flat Income Tax on Certain Revenues Performed by Individuals Act amended the PIT Act to introduce categories of creative activity which entitle authors to settle 50% of their tax deductible expenses and doubled the annual limit of tax deductible expenses. Following doubts over the shortcoming of the amendments, the legislature decided to remedy their scope.
Employment & Benefits
Social security contributions in Poland are significant, particularly in the case of highly paid managers. As a result, it is common practice for managers to perform their duties as self-employed persons under management contracts. A recent Supreme Court decision confirmed that management contracts can still be performed by self-employed managers and that such business activity constitutes a basis for social security insurance if the manager is not a management board member.
Supreme Court decides that employers can demand information on employees' additional work activitiesPoland | 25 October 2017
The Supreme Court recently ruled that an employer can demand that an employee inform it of any additional activities that he or she undertakes during the employment period. If the employee fails to do so, this can justify his or her employment contract being terminated upon notice. The judgment confirms the court's existing position in this regard. However, the court's second conclusion concerning data protection is new and may raise doubts regarding its compliance with the Labour Code.
The Act Amending the Act on the Employment of Temporary Workers and Certain Other Acts recently entered into force. It introduces important changes and limitations concerning temporary work and aims to improve the temporary work market and counteract abusive practices. The amendment concerns all employers that hire temporary workers.
In a recent judgment concerning an employment agreement concluded with a pregnant woman, the Supreme Court stated that the actual and real performance of an employment relationship is decisive for determining whether the parties actually concluded an employment contract. Entitling a document 'employment agreement' and having it signed by the parties does not determine its legal status – rather, it is crucial that work is performed on the basis provided for in the employment contract.
The Supreme Court recently decided that bringing a claim against an employer for the unlawful termination of an employment contract pursuant to Article 45(1) of the Labour Code is not a prerequisite to obtaining an award of damages pursuant to Article 18(3d) of the code. The decision fundamentally changes the risks associated with serving a termination notice and terminating an employment contract and enables employees to make claims long after their employment has been terminated.
The Supreme Court recently ruled that an employee's breach of the obligation to obey an employer's instructions constitutes a violation of the employer's intangible interests. The court explained that irrespective of the working time system in which an employee is employed, he or she is bound by an employer's instructions concerning work, unless they are against the law.
The Ministry of Finance recently issued a general interpretation of the Personal Income Tax Act 1991 provisions regarding the tax exemption applicable to employee compensation received under voluntary redundancy programmes. The interpretation introduces a new approach to the taxation of voluntary redundancy benefits and will likely lead to the unification of the tax administration's practice in this respect.
The Act on Posting Employees within the Framework of the Provision of Services recently entered into force, guaranteeing an appropriate level of protection for posted employees. In particular, the act determines the terms and conditions of employment, as well as the principles of administrative cooperation between Polish authorities and EU member states. The act also introduces obligations for foreign employers that post employees to Poland.
The Supreme Court recently ruled that an employee was entitled to damages for unlawful termination of employment with notice not exceeding the salary of his statutory notice period, even though it had been contractually extended by the parties. This provision does not apply if the parties to the contract have agreed that an extended notice period be included when calculating damages for unlawful termination.
The recent amendments to the Labour Code made long-expected changes regarding fixed-term employment contracts. The amendments aim to eliminate the abuse of fixed-term contracts by employers. As the interim regulations are still relatively ambiguous, employers should carefully examine each case alongside the provisions of the Labour Code, which may govern the particular situation differently from the newly introduced provisions.
The Supreme Court recently ruled that a management contract rather than employment status is the legal basis for calculating social security contributions for managers who are registered as self-employed and have management contracts with a company in which they are board members. The decision establishes a legal principle under which members of management boards cannot enjoy the favourable social security benefits available to self-employed persons.
The Constitutional Tribunal recently ruled that Article 2(1) of the Trade Unions Act – which grants the right to establish and join a trade union to employees only and not to other persons performing paid work – was unconstitutional. The judgment does not mean that this section of the act has lost its binding force, but it should result in its immediate modification.
In a recent judgment the Supreme Court ruled that in order to assess whether a subsidiary had breached the principle of equal treatment in employment, the circumstances of its employees could be compared to those of employees of its parent company. The judgment also confirmed the court's position on the difference between unequal treatment and discrimination in employment.
The European Court of Justice recently ruled that the Labour Code provision regarding notice periods applicable to fixed-term employment contracts infringed the requirement to treat fixed-term employees as favourably as permanent employees if their working conditions are comparable. The cabinet recently presented a bill that proposes to eliminate the Labour Code's discriminatory provisions.
The Ministry of Labour and Social Policy has recently acknowledged the need to amend the temporary agency regime. If the envisaged changes are adopted, they will significantly influence the temporary employment agency market. Work agencies will no longer be able to assign the same temporary employee to one user-undertaking over many years by juggling the employee between themselves.
The Supreme Court recently confirmed that it is possible to terminate a post-employment non-compete agreement with notice on condition that the agreement includes prerequisites for such termination. The rules under which a post-employment non-compete agreement can be concluded are set out in the Labour Code.
The Supreme Court recently ruled that notice periods may be shortened, but only when the notice is served by the employee and the shorter notice period is more favourable to that employee than the statutory one. The judgment outlines the court's position on the autonomy of will of parties to employment contracts in respect of the length of notice periods. However, it is still not possible to shorten the notice period in case of termination by an employer.
The European Court of Justice recently ruled that the Polish Labour Code provision regarding notice periods applicable to fixed-term employment contracts infringes the prohibition against treating fixed-term employees less favourably than permanent employees if the situations of those employees are comparable. It remains to be seen how the judgment will affect Polish court practice in similar matters.
It is common practice in Poland for companies to hire individuals based on civil law contracts (ie, those for self-employed contractors), as opposed to employment agreements. In this regard, the Supreme Court recently issued a ruling concerning the issue of compensation for a self-employed individual in return for a post-termination non-compete obligation.
The Supreme Court recently issued an important ruling concerning the secondment of an employee to another EU member state, in view of the legal characteristics of a business trip. The ruling materially affects social security obligations with respect to the remuneration of employees posted abroad, and confirms and strengthens the court's general position concerning the narrow understanding of the term 'business trip'.
A material amendment to the Labour Code recently entered into force. The changes concern working time and are generally to employers' advantage – their aim is to increase flexibility and limit personnel costs. Among other things, the changes allow for the extension of working time settlement periods and introduce flexible working hours and procedures for making up for employee absence.
A contractual penalty is widely accepted as a convenient instrument for ensuring that the damage suffered by an employer connected with the violation of a non-compete agreement is compensated. However, it is important to balance the amount of the penalty against the amount of compensation paid to the employee for compliance with the non-compete obligation. The Supreme Court recently ruled on this matter.
Following an employer's instructions is one of the basic obligations of an employee. The Labour Code does not explicitly state the consequences of an employee following unlawful instructions or adhering to unlawful practices applied at the workplace. Such actions could clearly expose the employee to potential liability under criminal or administrative law, but the consequences under employment law are less obvious.
The Supreme Court recently confirmed a new approach to analysing the consequences of a trade union's failure to notify the relevant employer of the number of union members among its employees in a timely manner. The approach provides a better balance between protecting the rights of a trade union and protecting the employer from negative consequences resulting from the union's negligence.
The Supreme Court has ruled on the reinstatement of a dismissed management board member to his job. The court distinguished between the corporate relationship and the employment relationship between the management board member and the company. The decision should end discussion of whether the Commercial Companies Code regulations affect the claims available to employees under the Labour Code.
The Supreme Court recently ruled on the role of company trade union organisations in termination decisions. The court ruled that under certain circumstances, the failure on the part of the company trade union organisation to provide information requested by the employer did not release the employer from the obligation to notify the organisation of its intention to terminate an employee's contract.
The International Labour Organisation has provided the Polish government with recommendations that it change the legislation concerning employees' freedom of association. Following these recommendations, the government should amend labour legislation to ensure that the right to establish and join trade unions is granted not only to 'employees' in the sense of the Labour Code, but also to other categories of worker.
In the absence of Labour Code regulation, the rules for receiving bonuses are largely determined by decisions of the Supreme Court. A significant change in court practice sheds light on the question of whether incomplete performance of a bonus-related task entitles an employer to withhold an employee's bonus in full.
Polish trade union Solidarity has filed a complaint against the government with the International Labour Organisation (ILO) concerning alleged infringement of workers' freedom of association. Solidarity alleges that the Act on Trade Unions 1991 does not comply with ILO Convention 87, "Freedom of Association and Protection of the Right to Organise Convention", as it wrongfully limits the freedom of association of workers.
Poland has not avoided the effects of the world economic crisis. To mitigate their impact on employment law, the parties of social dialogue have agreed upon a so-called 'anti-crisis package', including a range of instruments aimed at making employment relationships more flexible. The package was introduced into the Polish legal system by the Anti-crisis Act, which will continue in force until December 31 2011.
In a recent ruling the Supreme Court stated that the collective redundancy procedure also applies in cases where the employer has issued an appropriate number of notices of alteration of terms of employment. However, not all commentators agree with the court's reasoning.
The Constitutional Tribunal recently found that the information claim mechanism provided for in the Industrial Property Law does not comply with the Constitution. Following the tribunal's ruling, the scope of the legal mechanisms to obtain information to determine the scale of an IP infringement has been reduced. However, the decision also makes it possible to protect entrepreneurs from the unjustified and unnecessary disclosure of business secrets.
Andrzej Sapkowski, a well-known Polish writer and author of The Witcher fantasy saga, recently requested additional remuneration of at least Z60 million from CD Projekt for a video game based on his work. Following the game's worldwide success, Sapkowski claimed under Article 44 of the Copyright Act that the remuneration granted to him was too low relative to the benefits derived from the exploitation of his work.
The Copyright Law provides no legal definition of what constitutes an 'audiovisual work', which has resulted in problems regarding the remuneration of authors and the role of collective management organisations in this context. The practical issues concerning remuneration for the use of audiovisual works underline the need to amend the Copyright Law, as the existing legislative gaps cannot be resolved by case law alone.
The Polish legislature is in the process of implementing the EU Trade Secrets Directive. The new legislation is considered to be generally compliant with the directive and is likely to come into force on June 9 2018. While the legislature should be praised for its attempt to implement the directive on time, work appears to be progressing too quickly in order to discover and eliminate possible deficiencies and guarantee the directive's full implementation.
There is an urgent need to improve the collective management system in Poland. The recent proposed introduction of the extended collective licensing model offers a chance to solve the existing legal and practical problems, but any such change should be considered and consistent with the whole collective management system in order to avoid further complications and the creation of new weaknesses in the legal framework.
There is a need for Polish patent law to provide for an explicit procedure that allows for the amendment of patent claims during invalidity proceedings. Although two theoretical options exist, the lack of well-established case law means that their viability remains uncertain. However, it is hoped that the admissibility of these options will be assessed by the Patent Office and the courts in the near future, as patent holders have become more interested in exploiting less obvious means of defending their patents.
The legislature recently adopted changes that could be of major importance for entities that provide IT systems to the courts and judicial authorities. According to the Act amending the Act on the Common Court System, the minister of justice will acquire the right to decide unilaterally whether judicial authorities can use software if an important state or justice interest requires an efficiency of performance or continuity of operation and an agreement with a copyright holder is troublesome.
Under the Industrial Property Law, a rights holder may demand that an infringer surrender any benefits obtained unlawfully by way of trademark infringement. In practice, calculating the amount of profits can be challenging. While the amount of profits should be calculated on a case-by-case basis, there are some general principles that should be considered.
The Industrial Property Law does not explicitly mention the possibility of assessing patent infringement under the doctrine of equivalents. However, the doctrine seems to be gaining support among legal commentators and judges. The admissibility of the doctrine of equivalents in Poland has long been the subject of lively discussion, which may soon be concluded with definite answers.
Definitive end to controversial calculation of double and triple damages for copyright infringement?Poland | 09 January 2017
Article 79(1)(3)(b) of the Copyright Act allows a rights holder to demand double the amount of damages for an infringement or, if the infringement was culpable, three times the amount of appropriate remuneration. This regulation was partly invalidated by the Constitutional Tribunal in mid-2015, and the European Court of Justice advocate general recently delivered an opinion that this provision may not agree with the EU IP Rights Enforcement Directive (2004/48/EC).
The commercial use of 'artistically processed' national symbols is allowed in Poland. However, it is recommended that any changes to such symbols are made visible, to comply with the law and that ensure their use is not disrespectful. Further, parties intending to use a national symbol in a commercial way should be aware that obtaining protection for a trademark that includes a reference to a national symbol will likely be impossible.
A judgment was recently delivered on the admissibility of using the SOLIDARITY sign in artistic activity. The figurative sign, which represents the trade union Solidarity, gained international recognition due to the crucial role that Solidarity played in the Polish transition to democracy. The court decided that the unauthorised use of this sign in the music video "I hate you, Poland" did not infringe Solidarity's copyrights or harm its interests and reputation.
In a recent judgment concerning an alleged industrial design infringement, the Supreme Court redefined the principles of protection of industrial designs in Poland. The court deliberately deviated from well-established case law and decided that the courts should not address the question of infringement of a Polish industrial design until the validity has been decided in administrative proceedings.
Recent amendments to the Industrial Property Law resulted in the Patent Office moving from a relative examination system to an absolute examination system for trademark applications. The decision to eliminate relative examination is an example of the ongoing harmonisation of EU trademark practice and it is hoped that it will shorten the trademark registration process significantly.
Significant amendments to the Industrial Property Law will enter into force in December, bringing important changes to the patent, trademark and industrial design regulations to ensure compliance with European standards. Among the patent regulation amendments are the introduction of a disclosure of inventions grace period, a clear and complete disclosure requirement and changes to biotechnological invention patent claims.
Establishing the boundaries of a trademark's protection is important for rights holders and parties that could be suspected of unlawfully using another party's exclusive rights. A recent Supreme Court case examined the restriction on trademark rights where it is necessary to indicate the intended purpose of a product or service and found that the word trademark was sufficient in this context.
The Industrial Property Law provides that a product's shape or packaging may qualify for trademark protection if it is capable of distinguishing the goods of one undertaking from those of another and the shape is not excluded from trademark protection. Recent decisions illustrate the criteria that the Patent Office applies for the registration of shapes and the protection offered by the courts.
Poland has recently become an important venue for European litigation in industrial property matters, as rights holders become increasingly conscious of the importance of protecting and effectively enforcing their rights in Poland. This update summarises the position of Polish courts regarding the methods for calculating the prescription period of infringement claims.
Polish courts have generally upheld Polish Patent Office (PPO) decisions refusing to validate European patents on software-related inventions in Poland. However, the Supreme Administrative Court recently departed from this approach in determining the technical character of inventions related to digital electronics. It will be worth watching carefully whether the PPO follows the court's judgments in the future.
International trademark practice has developed letters of consent to overcome a prima facie conflict between trademarks. The Polish Patent Office has accepted letters of consent in the past; however, a couple of years ago it changed its position and it now refuses to acknowledge them. Legislation has now been proposed under which they would once again be accepted if they fulfilled certain requirements.
Tech, Data, Telecoms & Media
Under a new financial support scheme, the Polish Film Institute will now offer cash rebates as a form of support for the production of feature films, documentaries, animated films and TV series. The general aims of the scheme are to assist the audiovisual market, attract foreign capital, support the production of films in Poland and promote the country and its cultural heritage abroad.