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Currently, seniority mainly includes employment based on a traditional employment relationship. This effectively results in unequal treatment of current employees who previously worked with an employer (for example) as independent contractors or on a mandate agreement basis. They now have lower severance pay, a shorter notice period, and/or less vacation time than employees who have been working under an employment contract for the same period of time. The same may also apply to other entitlements that are granted on the basis of seniority, such as allowances and bonuses.  

This is now set to change, and periods of self-employment and work performed under other civil law contracts (with the exception of work product agreements), among others, will also be counted as part of the period of employment. The new regulations are to apply retroactively, and thus take into account the employee’s entire career to date. Confirmation of these periods is to be provided by way of a certificate issued by the Social Security Institution (ZUS).  

Seniority will also include certain periods when the employee is not subject to social security as stipulated by special regulations, such as service agreements entered into by secondary school students or students up to the age of 26. 

Takeaway for employers

Human resources departments should prepare for the planned changes. If you know that there are employees who previously worked with the employer on a freelance or other contract basis, it is worth calculating in advance how the cost of employing those employees will increase due to seniority allowances, and prepare for this from the organisational side. It will also be good practice when the new regulations come into effect to inform employees that their seniority has automatically increased and what the practical implications of this are (e.g. vacation time, termination notice period).  The changes will also increase the pool of available candidates for senior positions in the public sector. This is because a certain length of service is often a statutory requirement for employment in those positions.  

The bill is expected to be approved in the third quarter of 2024. 

 

Discover more about compensation and benefits on our Global HR Law Guide