Policy options to tackle labour market dualism – seminar in Warsaw

In Poland the phenomenon of dual labour market involves abuse of the possibility to hire employees under civil law contracts.

During the seminar IBS presented solutions of this problem.

They comprise the following recommended solutions in the area of labour law and worker taxation:

1. Single contract – single type of employment contract

The idea has been put forward by Tito Boeri (Bocconi University, Milan). Single contract is an open-ended employment contract, which provides newly employed workers with a weaker protection against dismissal than presently enjoyed by employees working under an employment contract, yet greater than in the case of persons working under civil law contracts and self-employed individuals, and this protection increases with time.

2. Two labours codes – one for small enterprises, one for medium-sized and large enterprises

This recommendation especially due to small enterprises. IBS proposes to restrict some of the administrative obligations imposed on small companies, concerning such issues as sending workers for medical examinations, creating holiday plans, retaining employee files or the possibility of paying an equivalent compensation for a working Saturday.

3. Reducing the tax burden of law earners

IBS proposes to increase the tax deductible expenses and the basic personal income tax rate to 20% in order to reduce the total tax burden oflow earners.

The panel debate was attended by experts from public aministration and science. Panellists commented on the results of the report ‘Dual labour market in Poland – proposals for overcoming the deadlock’. One of the guests was prof. Tito Boeri from Bocconi University.

Pannelists:

Jacek Męcina – Secretary of State, the Ministry of Labour and Social Policy in Poland
Robert Kowalski – the Chancellery of the President
Roberta Gatti – World Bank
Grzegorz Baczewski – Polish Confederation Lewiatan
Piotr Arak – Polityka Insight

Moderator
Cezary Kowanda – Polityka