Poland's labour inspectorate can now convert civil contracts into employment, as reform takes effect

What changes today

A reform of the State Labour Inspectorate (PIP) enters into force, giving district labour inspectors the right to convert civil law contracts into employment contracts. Until now, only labour courts could order such a change. The new power is the centrepiece of a law designed to curb the misuse of so-called junk contracts, where workers perform duties typical of an employment relationship but are kept on mandate or B2B agreements that deny them paid leave, sick pay and job security.

There will be no automatic conversion of civil law contracts into employment.

The reform does not alter the legal definition of an employment relationship. Article 22 of the Labour Code still requires that work be performed personally, under the employer's direction, at a time and place set by the employer. Inspectors will examine the day-to-day reality, not just the paperwork.

Conditions for conversion

A contract can be reclassified only when three conditions are met: the work is done under the employer's supervision, at a designated place and time, and is carried out personally and continuously. The Ministry of Family, Labour and Social Policy says the reform targets situations where an employment relationship exists in fact but is hidden behind a civil law contract. Properly structured B2B or mandate agreements are not at risk.

Paper will bear anything, but it is not the contract wording that will determine our decisions. The labour inspector will analyse the actual state of affairs, conduct inspections and hearings.

Impact on B2B and mandate contracts

Self-employment and mandate contracts remain legal. The reform does not ban them. However, inspectors will look closely at cases where a sole trader invoices only one client, uses the client's equipment, and has no real business risk. The Ministry of Finance estimates that about 160,000 B2B contracts are fictitious. The labour ministry puts the number of people on civil law contracts at roughly 1.5 million.

Inspection process and appeals

Inspectors can now carry out parts of a check remotely, via video conference and by requesting electronic documents. A new risk-analysis tool allows PIP to exchange data with the Social Insurance Institution (ZUS) and the National Revenue Administration, helping to target firms where a single contractor issues invoices to one counterparty over a long period. Employers can appeal an inspector's decision to a labour court.

Only in a few years will we know if the reform worked. Then the first decisions will go through the courts. I suspect that employers who have the most to lose from such a decision will appeal to the court until the very end.

Why the reform matters

The government has framed the change as both a worker-protection measure and a condition for unlocking EU recovery funds under Poland's National Recovery Plan. It also aims to level the playing field for businesses that already employ staff on proper contracts, ending a competitive advantage built on precarious work arrangements.