Category: Legal alert

On 9 May 2019, the upper house of the Polish parliament (the Senate) adopted, without revisions, the Act of 26 April 2019 on Amendments to the Agricultural System Act and Selected Other Acts (the “Amendment”). The Amendment was subsequently signed by the Polish President on 27 May 2019.

It will come into force on 26 June 2019.

We have prepared an overview of key changes brought – in our opinion – by the new legislation, which will relax the restrictions on agricultural land transactions.

1. The list of cases to which the provisions of the Agricultural System Act do not apply was expanded to include, among others, agricultural land situated within the administrative boundaries of cities/towns, with respect to which a resolution on location of a residential project (as defined in the Facilitation of Preparation and Implementation of Residential Projects and Auxiliary Projects Act of 05 July 2018), or a resolution on location of an auxiliary project (as defined in the aforesaid Act) has been passed.

2. In accordance with the Amendment, agricultural land may be acquired by persons/entities other than individual farmers if the area of such farmland is below 1 ha.

3. The period over which agricultural land has to be used by its acquirer for agricultural purposes has been reduced from 10 to 5 years.

4. The definitions of ‘farm’ and ‘relative’ have been rephrased. Pursuant to the Amendment, a ‘farm’ should be understood to mean a “farm’ defined in the Polish Civil Code, in which the area of agricultural land or the total area of agricultural land lots is no less than 1 ha. As far as a ‘relative’ is concerned, the definition will now include stepchildren and parents’ siblings.

5. The Amendment names new entities entitled to apply for an agricultural land acquisition approval to the Director General of the National Support Centre for Agriculture. These include, among others:

– public higher education institutions – if the property is necessary for educational, research or development purposes, and will be put to agricultural use;

– those acquiring agricultural land for public purposes, as defined in the Property Management Act.

The requirements applicable to entities named in the Act before the Amendment, i.e. sellers of agricultural land and individuals intending to set up a family farm, have also been modified.

6. The Amendment elaborates on the procedure of and conditions for agricultural land acquisition approval (expressed in an administrative decision issued by the Director General of the National Support Centre for Agriculture) by setting forth the requirements that an application for approval needs to satisfy, and listing documents to be attached.

7. There are also changes to the right of first refusal and the acquisition right held by the National Support Centre for Agriculture.

8. The Amendment provides for the establishment of a system designed for free publication of agricultural land sale advertisements and responses to them, while also setting the rules of publication and basic requirements which such advertisements and responses should satisfy.

The changes outlined above reflect the general trend to make the rules applicable to agricultural land transactions more lax for certain entities and in specific cases.

If you have any questions about the issues discussed above or other changes to the Act, please feel free to get in touch with us any time.

Contact person
Michał Sołtyszewski
Attorney-at-law / Partner
michal.soltyszewski@actlegal-bsww.com
+48 22 420 59 59

From 1 July 2019 the largest employers will have to enable their employees to enrol in employee capital plans.

Employee capital plans (referred to by their Polish acronym “PPK”) were introduced by the Employee Capital Plans Act of 4 October 2018 [Ustawa z dnia 4 października 2018 r. o pracowniczych planach kapitałowych](Dz.U./Journal of Laws of 2018, item 2215, referred to below as the “PPK Act”).

We have prepared a brief overview of key provisions of the PPK Act.

1. COMING INTO FORCE

The PPK Act came into force on 1 January 2019, however, employers (i.e. those hiring under employment contracts and contracts of mandate, as well as entities where supervisory board was appointed) do not have to apply its provisions right away.

The first to set up PPK, on 1 July 2019, will be employers who as of 31 December 2018 hire at least 250 individuals. Smaller businesses do not have to worry about PPK until later, with the next group required to introduce PPK on 1 January 2020 (employers with at least 50 employees as of 30 June 2019).

When determining the number of employees one needs to be wary of two different definitions of employee under the PPK Act and the Labour Code. In the case of the PPK Act, an employee is a broader term that encompasses individuals hired under agency contracts, contracts of mandate and service contracts, as well as supervisory board members who are compensated as such.

2. VOLUNTARY PARTICIPATION

Participation in PPK is voluntary, although, employees will be defaulted to the plan, with the option to opt out on the basis of a written statement. The decision to opt out is not permanent.

On the one hand, an employee who gave up saving can reenrol whenever they wish. On the other hand, if such employee sticks with their choice to resign, they will have to renew the opt out every 4 years. A different solution is provided by the PPK Act for those who are 55 years of age, but not yet turned 70. They can save through PPK, but their enrolment is not automatic – they need to apply. PPK, however, is not an option for those who turned 70 on their first day of work at the latest.

ATTENTION

Employers must not encourage employees to opt out of PPK. Such conduct exposes them to criminal liability (an employer may be fined up to 1.5% of its payroll fund in the preceding financial year).

3. PPK CONTRACTS

Apart from paying contributions, basic obligations of employers related to PPK include making two contracts which lay down the terms and conditions of saving and managing the funds. The first contract concerns the management of PPK and is made between an employer and a financial institution, the second contract concerns the operation of PPK and is made also between an employer and a financial institution, but for and on behalf of employees who decided to save for retirement through PPK.

Employers required to implement PPK on 1 July 2019 will have to execute the contract for the management of PPK no later than 26 September 2019, and the contract for the operation of PPK – 10 October 2019.

ATTENTION

An employer who failed to execute either of the above said contracts within the specified deadline faces criminal liability (the contract for the management of PPK – a fine up to 1.5% of the payroll fund of the employer in the preceding year, the contract for the operation of PPK – a fine between PLN 1,000 and PLN 1,000,000).

4. CONTRIBUTIONS TO PPK BY EMPLOYER AND PPK PARTICIPANTS

PPK contributions will be made by both employers and PPK participants (employees who sign up for the plan). The PPK Act provides for two types of PPK payments – a basic (minimum) contribution and an additional contribution, which is voluntary for both participants and employers. The basic contribution paid by the employer is 1.5% of the salary. The employer may choose in the contract for the management of PPK to pay additional contribution which, however, cannot be higher than 2.5% of the salary.

PPK participants make basic contributions equal to 2% of their salaries (lowered to 0.5% in special cases), with the option to make additional contributions up to 2% of their salaries.

In addition, participants will be subsidized by the Labor Fund. They will receive one-off welcome contributions and, if eligible under the PPK Act, annual contributions.

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The above is only a brief overview of PPK. The PPK Act is extensive and covers an array of specific cases modifying the discussed general rules and providing more detail on individual issues.

If you have any questions, contact us:

Ewa Bieniak
Attorney-at-law/Of Counsel
+48 22 420 59 59
ewa.bieniak@actlegal-bsww.com