A new study published by the Central European Labour Studies Institute (CELSI) lifts the veil on the hidden impact of the crisis on Poland's labour market. It reveals that while Poland was the only EU country not to enter recession, its effects on the Polish workforce have been severe.

Even though Polish GDP kept growing by an average of 3.4% per year between 2008 and 2011 and company profits rose 40% in the same period, Poland is one of the countries that saw the largest proportional increase in unemployment rates.

While non-exporting industries were kept afloat by strong domestic demand, exporting industries were hit hard, and foreign car manufacturers closed plants in Poland to protect jobs in their home countries. Overall, employees have suffered from increasing unemployment and stagnating wages.

These shocks led to attempts by unions and employers to negotiate on working time in order to protect jobs. At the national level, over 1,300 companies, employing over one million people (half of whom in the automotive sector), took advantage of the norm that allows company-level agreements to make working time more flexible (in particular, the annualisation of working hours).

This measure is deemed to have resulted in limited job losses in manufacturing, although a precise assessment of the effects is lacking.

However, other aspects of the negotiated package remained virtually dead-letter, in particular the support to lifelong learning (only 15 companies for a total of 55 employees benefited from it).

Therefore, the authors of the study argue that these negotiations did not foster better industrial relations on other issues, and Poland's traditionally weak collective bargaining actually became even weaker.

In the public sector, annual negotiations on pay stopped, causing unions to adopt more proactive strategies, including the threat of strikes, in order to bring employers to the negotiating table. The fact that the best gains were achieved by the unions in election years (2007 and 2010) indicated that in the public sector the unions have been able to use their political power effectively, regardless of the global economic crisis.

Meanwhile, in the steel industry employers laid off their permanent staff in favour of agency workers, following the expiration of collective agreements on job protection.

Meardi and Trapmann, who authored the study, argue that the crisis has had a strong negative impact on some sectors of the Polish labour market and led to more adversarial industrial relations, and that the symbolic legacy of the crisis in Poland is an end to "market euphoria" and a declining acceptance of global market integration and employment flexibility.

Dr. Marta Kahancova, CELSI's Managing Director, said: “This study shows us that although the Polish economy has continued to grow throughout the crisis, its labour market has still seen rising unemployment, wage stagnation, and growing tensions between employers and employees. This could indicate a surprising degree of flexibility in the Polish labor market, but also looming tensions and deterioration of working conditions.”

"Poland: Employment Relations and the Crisis... of its Neighbours" by Meardi, Guglielmo and Trapmann, Vera. Available at: http://www.celsi.sk/en/publications/discussion-papers