The most recent amendments to the legislative Act instituting caps on remuneration of executives managing Poland’s state-owned enterprises may cause some broader confusion. These amendments stipulate that maximum salaries for 2015 shall be defined without reference to statistical data for the last quarter of the preceding year, as has hereto been the general rule. 

The legislative Act of 3 March 2000 regarding remuneration for persons managing certain legal entities (2000 Journal of Laws No 26, item 306) (hereinafter referred to as “the Act”) defines and regulates maximum remunerations for individuals serving in managerial positions in Poland’s public sector. Under this Act, maximum monthly remuneration for a manager at a state-owned enterprise is calculated by multiplying the appropriate figure defined by the legislature for a given employee group (between 1 and 6) by the statistical index announced by the Central Statistical Office for Poland corresponding to the average monthly remuneration in the enterprise sector (without distributed profits) in Q4 of the previous year. A general rule to this effect is laid down in art 8 of the Act.

In light of the legislative amendments now implemented, calculation of maximum remuneration for 2015 shall refer not to statistical data for the last quarter of the preceding calendar year, but to data for another period defined by the legislature.

A different reference period 

Under the legislative Act of 28 November 2014 regarding amendment of certain acts in connection with realisation of the budget act (definitively adopted by the lower chamber of Polish Parliament on 5 December following consideration of modifications posited by the Senate), the Act as it hereto was has been supplemented with new provisions to the effect that calculation of the maximum remuneration permitted in light of the Act in 2015 shall proceed in reference to the average monthly remuneration in the enterprise sector (without distributed profits) in Q4 of 2009 or, in the case of members of selected supervisory bodies, the average monthly remuneration in the enterprise sector (without distributed profits) in Q4 of 2011.

In numerical terms, this means that the index for calculating public sector salaries shall stand at PLN 3,454.58. When multiplied by 6, i.e. the highest possible multiplier, this translates into monthly remuneration of PLN 20,727.48. A different index, PLN 3,769.83, may be applied only with respect to members of supervisory boards and audit boards of state agencies (whatever their organisational and legal form); seeing as the legislature has set a multiplier of 1 for this category of recipients, PLN 3,769.83 will be the maximum remuneration for persons serving in supervisory roles at such entities.

Albeit the statistical figures for Q4 of the previous year, 2014, yet have to be announced (the Central Statistical Office for Poland usually publishes them in January of the following year),if the data for Q3 and Q4 of 2014 are anything to go by, it would seem that average monthly remuneration in the enterprise sector (without distributed profits) in Q4 of 2014 will easily top PLN 3,900.00. In other words, this figure will exceed the maximum imposed by the legislature in the recent amendments to the Act – logically enough, if we consider that the object is to prevent public sector remunerations from exceeding a certain level.

Problems with contracts 

The amendments to the Act described above may give engender certain complications in practice. For instance, there arises the question of what remuneration shall be payable to an employee in a situation where her employment contract or appointment expressly stipulates that she is entitled to the maximum remuneration provided for in the Act (duly set in reference to the statistical data for the previous year). In such a scenario, tension arises between the more favourable contractual provision (or terms of appointment) on the one hand and the less favourable statutory provision on the other.

Disbursement of remuneration in excess of the statutory maximum may pose problems for the employer and the employee alike. Art 13 of the Act provides that stipulations of employment contracts (and likewise of other documents constituting the basis for employment relationships or, more broadly, of retention of the given individual) which purport to set monthly remuneration, annual bonuses, severance benefits and/or additional perquisites at a value exceeding the statutory maximum shall be null and void through operation of the law insofar as they exceed that statutory maximum. In other words, the public sector employer has no legal possibility of disbursing remuneration in excess of the maximum defined by the then-current versions of the Act, even if the applicable employment contract or appointment stipulate a higher amount.

No margin of error 

Also worth noting in this context is art 14 of the Act, whereunder failure to abide by the Act (also in terms of remuneration values) causes dismissal of the supervisory bodies of the offending entity, with the members thus dismissed barred from reappointment as State Treasury or local self-government representatives for the next period in office. The language of the Act is quite strict in this regard; there is no provision which might enable rectification of a transgression, and exceeding the statutory remuneration maximum by even the most minute amount may incur the full set of penalties.

It should also be borne in mind that the remuneration packages of individuals covered by the Act are in the public realm and are exempt from the usual laws concerning protection of personal data or of business secrets. Accordingly, ascertainment of the earnings of individuals serving in managerial or supervisory capacities at state-owned enterprises is quite easy.