Category: Poland

Greenberg Traurig has announced the establishment of its new Data Center practice in the firm’s Warsaw office, to be headed by Counsel Adam Narloch.

According to Greenberg Traurig, the Data Center practice aims to provide clients with legal advice related to the aspects of the development and expansion of their digital infrastructure while drawing expertise from its Real Estate, Corporate, Banking, and Competition departments and the Environmental and Energy practice areas.

Narloch, specializing in real estate and corporate and M&A, has been with the firm since 2015, having first joined as a Senior Associate. He was promoted to Counsel in 2023. Earlier, he was an Associate with Allen & Overy, from 2010 to 2015.

“Recently, we have seen a surge of interest in data center investments in Poland, which is linked both to global trends and the very positive perception of our market by investors,” Narloch commented. “There is no doubt that with the rapid growth of cloud computing and big data, the data center sector will continue to flourish in the coming years.”

“We recognize that data centers are the backbone of modern businesses, and we are proud to be at the forefront of this industry,” Greenberg Traurig Poland Managing Partner Jolanta Nowakowska-Zimoch added.

Selling a part of an undertaking and the consequent transfer of a part of the business to another employer raises several practical and legal issues. This applies in particular to employees assigned to several organisational units, including the transferred part of the undertaking. According to CJEU case law, such employees’ employment contracts may be divided as long as this does not entail a deterioration in the working conditions and does not adversely affect safeguarding employee rights.

Both merging the companies and selling or dividing a part of the undertaking result in transferring the business or its part to the transferee. According to the Labour Code, there is no need to conclude new employment contracts in such a case, as the transferee or the company established in connection with the division becomes, by operation of law, a party to the existing employment relationship. However, pursuant to Article 23(1) of the Labour Code, there is a necessity to notify employees in writing about the planned transfer of business thirty days beforehand. Such a notice must include the information on the anticipated date of transferring the business, the reasons for the transfer, the legal, economic and social consequences for the employees, and measures relating to the terms and conditions of employment, in particular working conditions, wages and retraining.

Importantly, the employer cannot terminate the employee’s employment contract by giving the transfer of business as the reason for termination, whereas the employee has the option to terminate the employment contract with seven days’ notice within two months following the transfer. Although such termination has the same effects for the employee as those for employment termination with notice by the employer, in this case the employee is not entitled to full notice pay, and the possibility of receiving severance pay is limited.

The situation becomes more complicated when it is difficult to assign the employee in question to one particular department subject to transfer. For example, a company sells a part that produces paints and a sales department that supports this product range. So, if a sales representative sells paints, wallpapers and painting accessories and spends 40% of time handling paint sales, should this sales rep transfer to the buyer of the department? Or should the employment contract be divided?

Guidance on the fate of employees who are not exclusively assigned to the transferred part of the business is provided by the CJEU judgment in Case C-344/18 dated 26 March 2020. This judgment concerned an employee working in Belgium for ISS which informed the employee that given the transfer of part of the undertaking, Atalian, which had been awarded two out of three parts of the contract previously performed by ISS, had become her employer. However, Atalian, the company to which the worker was to transfer, disputed that there had been no transfer of a part of the undertaking. The employee brought an action against both ISS and Atalian for compensation in lieu of employment termination. The CJEU allowed the employment contract division in proportion to the tasks performed by the employee provided that such a division is possible and neither worsens working conditions nor adversely affects the safeguarding of workers’ rights. The CJEU justified this approach on the grounds that it ensures a fair balance between the interests of employees and those of the transferees. In practice, however, the division of employment contracts will often not take place as it may be impossible or may involve deteriorating the employee’s working conditions.

Dividing an employment contract between two or more employers often results in significantly longer commute due to different workplaces, which makes the division impossible. Such an arrangement may also partially deprive the employee of the remuneration in the form of overtime allowance or the possibility of compensating overtime with time off since in the case of part-time employment such an allowance may not be due to the employee for overtime work that does not exceed the working time standards unless the employment contract provides otherwise.

The division of the employment contract may also lead to worsening the situation of an employee who is a parent entitled to parental leave and who has reduced working time in order to care for a child. Such an employee, as a result of the 50:50 division of the employment relationship between two employers, will not be able to reduce working time. This is because the Polish Labour Code limits the reduction in working time to 1/2 FTE. Therefore, even if as a result of dividing the employment relationship, the employee will be employed by one employer more than 1/2 FTE, the employee’s situation will still deteriorate – with two part-time contracts, the employee will be able to reduce the working time by a smaller number of hours in total than would be possible with one full-time contract.

Dividing the employment relationship may also raise issues related to scheduling working hours and the need for appropriate agreements between employers in this regard. Leave planning is also made more difficult. Moreover, it cannot be excluded that an employee will work for employers with conflicting interests, operating and competing within the same industry. In such a situation, an existing non-compete can be an effective barrier to a possible division of an employment contract.

The CJEU judgment in the ISS case therefore provides clues on the fate of employees who are not exclusively assigned to the transferred part of the business. However, it leaves room for additional analysis as to whether the employment contracts of employees performing tasks not exclusively for the transferred part of business should and can be divided between the transferor and the transferee.

If the division of the employment contract is not possible, the degree of the employee’s assignment to the part of the business should be the deciding factor. This solution most fully meets the objective of Directive 2001/23/EC which states that in the event of a transfer of an undertaking or business, employees retain their rights and obligations under the existing employment contract.

By Agnieszka Nowak-Błaszczak, Counsel, Wolf Theiss

Rymarz Zdort Maruta has advised Kajima Partnerships and Griffin Capital Partners company Cerceda on its acquisition of Hymon Fotowoltaika from BNS Capital. Gessel and HWW Hewelt Wojnowski i Wspolnicy advised the seller.

“This is the second investment of this type by Kajima and Griffin on the Polish renewable energy sources market,” Rymarz Zdort Maruta informed. “In September 2021, the companies announced the creation of a joint venture to finance and develop renewable energy investments in Poland.”

Hymon Fotowoltaika is a Polish company specializing in photovoltaic installations and the supply of heat pumps to households and industrial and corporate customers.

Kajima Partnerships Limited invests in real estate, renewable energy sources, and other infrastructure assets. Griffin Capital Partners is a private equity and real estate investor and asset manager in Europe.

The Rymarz Zdort Maruta team was led by Managing Partner Pawel Zdort and included Partners Jakub Krzemien, Iwona Her, and Jakub Rachwol, Senior Associates Marzena Iskierka-Janota and Tomasz Kordala, and Associates Jakub Wilk, Szymon Rutecki, Michal Lulka, Justyna Niezgoda, and Augustyna Porzucek.

The Gessel team was led by Partner Michal Bochowicz and included Partner Bernadeta Kasztelan, Associates Rafal Smolik and Maria Kozlowska, Lawyer Karolina Olszewska, and Junior Associate Julia Gardecka.

The HWW team was led by Managing Partners Damian Wojnowski and Mikolaj Hewelt.

Lewczuk Lyszczarek i Wspolnicy has advised Contec on its EUR 10 million financing round led by HiTech ASI. SSW Pragmatic Solutions reportedly advised HiTech ASI.

The Warsaw Equity Group, an existing shareholder of Contec, participated in the round. 

Contec is a start-up that specializes in the processing of car tires and the production of raw materials reused in the industry.

HiTech ASI is a corporate venture capital fund managed by Bank Gospodarstwa Krajowego subsidiary Vinci.

“The funds obtained will be used to increase the processing capacity of Contec’s Szczecin plant,” a Contec press release stated. “Once completed, the plant will be able to nominally process 33,000 tons of used tires per year – three times more than today. In addition, the modernization will increase the production capacity of post-pyrolysis oil and recovered carbon black.”

The Lewczuk Lyszczarek i Wspolnicy team was led by Partner Lukasz Lyszczarek.

Gessel has advised Urteste on the public offering of its new share issuance and switching its market listing from the ASO NewConnect to the regulated market of the Warsaw Stock Exchange.

Dom Maklerski Banku Ochrony Srodowiska coordinating the offering.

Urteste is a biotechnology company from Gdansk that develops a method of detecting cancer from a urine sample.

Gessel’s team included Partner Krzysztof Marczuk, Managing Associate Michal Wielinski, and Associates Dawid Marciniak, Michal Dunikowski, and Piotr Blank.

Gessel did not respond to our inquiry on the matter.

Wardynski & Partners has advised multinational chemical company LyondellBasell Industries on the acquisition of the Mepol Group, including Industrial Technology Investments Poland and the Mepol and Polar companies in Italy. 

The Mepol Group manufactures recycled plastic products at plants in Italy and Poland.

The Wardynski & Partners team included Partner Krzysztof Libiszewski and Lawyers Aleksandra Drozdz, Sandra Derdon, Joanna Dudek, Marcin Kulesza, and Marcin Rzysko.

Wardynski & Partners did not respond to our inquiry on the matter.

The Polish Parliament is finally moving forward with the implementation of the EU directive on predictable and transparent working conditions (Directive (EU) 2019/1152).

The deadline for member states to implement the law expired on August 1, 2022. Similarly, to a number of other member states, the Polish government failed to promptly prepare the implementing bill on time. It appears that the changes will take effect in Poland in the spring of 2023, so below we have provided a Q&A setting out a brief description of what will change in the existing legal status in Poland.

What is the scope of changes being introduced by implementing the directive?

The modifications are intended to increase predictability and transparency of employees’ working conditions. They comprise a lengthy list of employment-related information that employers must give employees when they begin working, as well as a number of rights employees are entitled to exercise to protect against unfair treatment or termination. Also, a there will be a change to how probationary employment contracts can be concluded.

What modifications are going to be made to probationary employment contracts?

Currently, under the Polish Labor Code a probationary employment contract can last no more than three months. This general rule will stay unchanged, yet under the new legislation, if followed by a fixed-term employment contract, the length of the probationary period will vary:

For fixed-term contracts of no longer than six months, the preceding maximum probationary period is one month;
For fixed-term contracts lasting from six to 12 months, the preceding maximum probationary period is two months.
Additionally, if justified by the type of work, the probationary period may be extended once, by mutual agreement of the parties, for a maximum of one month, keeping the probationary period’s maximum length to three months.

Provided both parties agree in the employment contract, the probationary period may also be extended by annual leave taken as well as for other excused absences of the employee.

The current legal framework allows for a second probationary contract if at least three years has passed since termination of the employee’s previous work contract and the new contract is to perform the same type of job. Under the new legislation, however this is forbidden; a probationary contract can only be concluded again if the employee is hired for a different kind of work.

What information must employees receive in the content of an employment contract?

Until now, the employer had to include the following information in the employment contract:

• Type of work
• The place where the work is performed
• The remuneration for the work corresponding to the type of work, with an indication of the components of remuneration
• Working hours
• The date of work commencement
• The changes in this regard are relatively minor—under the new legislation it will be possible to indicate several places of performing work.

In addition, it will be necessary to clearly indicate in the employment contract the duration or end date of the probationary period contract, as well as to include (if so, agreed by the parties) a provision for extending the contract for vacation leave or sick leave. The parties will also be able to indicate if they plan to conclude a fixed-term employment contract after the probationary period and if so, for how long.

In the case of a fixed-term employment contract, it will be necessary to specify its duration or end date.

Please note that these changes affect the content of currently used employment contract, therefore please consider updating the employment contract templates you use.

What additional information must the employee receive?
Not later than seven (7) days after the employee begins work, the employer must have provided at least the following information:

The employee’s daily and weekly working hours and if the employee work full time or in different model

• Work breaks entitlement
• Daily and weekly rest entitlement
• Rules on overtime work and overtime compensation
• For shift work—the rules on transitioning from shift to shift
• When the employee has several workplaces—rules on movement between them
• Entitlements to other remuneration and benefits, in cash or in kind, than those agreed in the employment contract
• The amount of paid leave, in particular annual leave; if this is not possible to determine at the time of the information is provided, then the rules for determining and granting leave
• Rules for terminating the employment relationship, including formal requirements length of the notice period time limit for appeal to the labor court or,
• (if it isn’t possible to determine the length of the notice period at the time this information is provided) the method for determining the notice period
• The right to training (when provided by the employer) in particular, the general principles of the employer’s training policy
• Any collective bargaining or other collective agreements that cover the employee (if there is an applicable collective agreement concluded outside the workplace by joint bodies or institutions, the name of those bodies or institutions)
• If the employer has not established work regulations—the time, date, place and frequency of payment of salary (as well as for night work) and the method used by the employer for confirming the employee’s arrival and presence at work and the rules on absence from work

No later than thirty (30) days after employees begin work, the employer must inform them of the chosen social security institution where their employment-related contributions are paid and about the protection related to social security provided by the employer; this does not apply if the employee chooses the social security institution.

Please note that these changes affect the content of currently used employment contract, therefore please consider updating the employment contract templates you use.

What information should be provided to employees before they go abroad on a business trip?

Currently, the employer only needs to specify the duration of the work abroad, the currency in which the salary will be paid, the benefits due to the employee for working abroad as well as the conditions for the employee’s return to the country.

After the changes, employers will be obliged to inform employees going abroad on a business trip of the following:

• The country or countries where the work outside the country is to be performed
• The expected duration of the work outside the country
• The currency the employee will be paid in
• Benefits, in cash or in kind, related to the performance of the work outside the country
• Provision or lack of provision for the employee’s return to Poland
• The conditions of the employee’s return to the country—if such return is provided
• Please note that these changes will affect the content of various internal regulations, such as business trip regulations, so it seems reasonable to update these.

Can a currently employed employee ask for additional information about their employment as a result of the directive?

The new law indicates that employees who are employed when this new law enters into force can request extended information about their employment terms in line with the directive. The employer has three months to respond to the request. That said, the employer is under no obligation to inform its employees about this right.

Can an employee request changes in the employment contract, in particular, a change in the type of indefinite employment contract or for more predictable and safer working conditions?

Yes, once employees are employed for more than six months, they may make this kind of request to the employer—no more than once a year.

The employer should—to the best of its abilities—agree with the employee’s request. The employer has one month to respond to the employee’s request, in writing or electronically. If the employer chooses not to grant the employee’s request, it must justify the rejection.

Please note that informing employees in their employment contract of this right could be viewed as a good practice, so it might be reasonable to reevaluate employment contract templates.

Can an employer prevent employees from taking up parallel employment?

An employer may only prohibit an employee from working for another competitive entity by concluding a noncompete agreement, with the mutual consent of both parties. This position has long been expressed in the jurisprudence of the Polish Supreme Court and will soon find a place in the Labor Code.

Please note that this new stipulation may impact current employment contracts concluded with your employees, so it might be useful to reevaluate their content.

Who covers the cost of mandatory employee training?

Employers are obliged to cover the costs of training employees if it is necessary for the performance of a specific type of work or work in a specific position and this obligation results from the provisions of a collective bargaining, internal rules, legal regulations or the employment contract. In addition, this training must take place, to the greatest extent possible, during the employee’s working hours. If training must take place outside the employee’s normal working hours, it is still considered as working time. This also applies if trainings are ordered by an employer in the form of a formal instruction.

Please note that this amendment might necessitate some changes to the content of internal regulations regarding employee trainings, if your business has them.

Are employees protected from unfavorable treatment following their exercise of a right under labor law?

Yes, currently the principle of equal treatment in employment generally protects employees from unfavorable treatment after having exercised their rights. After the implementation of the directive, they will also be protected from adverse treatment resulting from an employee’s exercise of any right arising from a violation of labor laws.

Please note that this amendment might require a change in your internal antidiscrimination policies.

How are employees protected from unjustified terminations of employment under this directive?

Employees are protected from termination of employment with or without notice, if the termination resulted from any of the following:

• The employee requests a different type of employment contract and for more transparent and secure working conditions.
• The employee has a parallel employment with another employer (does not apply to prohibitions established in the form of a noncompete agreement).
• The employee asks for information that the employer is obliged to provide in connection with the performance of work.
• The employee exercises the right to request that the employer cover the cost of obligatory trainings or those mandated by the employer.
• Furthermore, the employer bears the burden of proof to explain that the termination was not based on any facts prohibited by the law.

When will the regulations come into effect?

We anticipate that the legislation will come into force soon, not later than in the second quarter of the year 2023.

By Aleksandra Minkowicz-Flanek, Partners and Magda Slomska, Counsel, Dentons

DWF has advised Multikino on its sale of a property in Warsaw’s Ursynow district to GH Development 11. Goralski & Goss Legal reportedly advised the buyers.

According to DWF, the plot of land is located at “the junction of KEN Avenue and Indira Gandhi Street in Warsaw […] According to the lease agreement signed on the date of sale, the Multikino Ursynow cinema will operate unchanged for at least 18 consecutive months.”

“Multikino, owned by the Vue Entertainment International Limited Group, was the first operator to launch a multiplex cinema in Poland in 1998,” DWF informed. “Currently, 45 cinemas in 37 Polish cities operate under the brand. The British Vue Group is the operator of the largest private cinema chain in Europe, operating in nine countries: the UK, Ireland, Germany, Denmark, the Netherlands, Italy, Poland, Lithuania, and Taiwan.”

DWF’s team included Local Partner Malgorzata Lesiak-Cwikowska, Counsel Katarzyna Stec, and Junior Associates Patryk Hilla and Michal Zaniecki.

Polish lawyers are actively discussing two legislative acts – one regulating family foundations and the other focused on remote work – set to impact their practices, according to KWKR Konieczny Wierzbicki & Partners Managing Partner Michal Konieczny.

“In Poland, a new law establishing a new type of entity is just coming into force,” Konieczny begins. “In May 2023, a new act will be introduced to regulate family foundations.” He points out that “family businesses have been popular in Poland but, until now, they had no specific regulation regarding succession in Polish law. As a result, their assets are often placed abroad in various forms, which was quite costly.” According to him, “the purpose of family foundations is to create a structure to support businesses over generational transitions and to support the successor. The business and the family would be formally separated, with the family being the beneficiary of the foundation. The foundation would be managed professionally to protect the assets in case of the retirement of the founder of the family business.”

Konieczny believes that family foundations could be quite a popular type of entity in Poland because the legislation also sets out favorable tax solutions for them. “The establishment of such foundations will not be taxed, and transferring assets to them will also not be taxed,” he notes. “Additionally, the acquisition of property rights for the beneficiaries of family foundations will not be subject to inheritance or donation taxes. Therefore, beneficiaries may become beneficiaries without any tax costs.”

Moving on to remote work, Konieczny highlights new regulations on remote work that are set to come into force in Poland. “Before the COVID-19 pandemic, there were regulations in place for teleworking, but they were over-regulated and not commonly used in the market,” he says, adding that “during the pandemic, temporary regulations were introduced to support employers in maintaining their business operations, making distance working less strict, more flexible, and easier to implement.” Now that these temporary regulations are expiring, he says “an amendment to the Polish labor code has been introduced.”

According to Konieczny, law firms will need to comply with new remote work themselves: “this has led to shifts in the work of law firms.” Additionally, “businesses are more open to remote work, especially those in IT or new technology, with 80 to 90% of employees working remotely regularly, with fewer days in the office. The new regulations will come into effect in April, and it is high time for compliance work,” he notes.

Konieczny also highlights some current developments in the Polish market. “Currently, the market appears to be stable, but the real estate sector is less dynamic due to inflation and high loan costs. Sales of new apartments have stalled and are significantly lower than last year, resulting in the sector being less active and in a holding pattern,” he notes. “Regarding M&A, I did not observe any negative developments, however, there is still less activity,” Konieczny points out. “While the ongoing deals continue to proceed, unfortunately, we are not witnessing many new projects starting or picking up, and it is unlikely that we will see a large number of new and exciting projects in the market, for at least the first half of the year.”

 

 

CMS has advised the Constantia Flexibles group on its acquisition of Drukpol Flexo in Poland.

The transaction remains contingent on regulatory approval.

Constantia Flexibles specializes in the packaging industry and employs almost 9,000 people in 16 countries.

Established in 1992, Drukpol Flexo is a Polish family-owned company.

Back in 2019, CMS also advised Constantia Flexibles on its acquisition of a majority stake in packaging producer TT-print (as reported by CEE Legal Matters on October 10, 2019). 

The CMS team was led by Partner Blazej Zagorski and included Partner Agnieszka Skorupinska, Counsels Agnieszka Starzynska and Maciej Andrzejewski, Senior Associates Magdalena Piszewska and Maciej Olejnik, Lawyers Magdalena Mentrak, Tomasz Piotrowski, Jan Macior, and Marta Tarkowska, and Associate Karina Zielinska-Piatkowska.

CMS did not respond to our inquiry on the matter.