Poland’s Labour Inspector Reform: More Power, Less Clarity

Fighting labour market dualisation without clarifying who an employee is.

At the beginning of April 2026, the President of Poland, Karol Nawrocki signed an amendment strengthening the powersof the National Labour Inspectorate while simultaneously referring the law to the Constitutional Tribunal for ex postconstitutional review. The reform was presented as a major step in combating bogus self-employment and labour market dualisation. For the first time, labour inspectors were granted the power to issue administrative decisions establishing the existence of an employment relationship where work formally performed under civil-law contracts or self-employment arrangements in fact meets the criteria of employment.

Public debate surrounding the reform focused primarily on constitutional concerns. Critics argued that the new powers granted to the Labour Inspectorate might excessively interfere with freedom of contract and the constitutional principle of freedom of economic activity. These objections proved significant enough for the President himself to refer the statute to constitutional review.

Yet the deeper problem may lie elsewhere. The reform does not actually resolve the long-standing ambiguity surrounding the legal test used to distinguish employees from non-employees in Polish law. On the contrary, it may intensify it.

The amendment was adopted under pressure connected with a milestone in Poland’s National Recovery and Resilience Plan (KPO, Krajowy Plan Odbudowy), linked to the disbursement of EU recovery funds. At the same time, the final version of the reform introduced additional interpretative complexities instead of clarifying the employment test. As a result, a reform intended to strengthen labour law enforcement may ultimately weaken legal predictability in one of the most contested areas of Polish labour law.

This post argues that the core problem created by the reform is not simply the expansion of labour inspection power. The more fundamental issue is that the legislature strengthened enforcement mechanisms without resolving the underlying uncertainty surrounding employment classification itself.

Poland’s Long-Standing Classification Problem

The reform emerged within the context of a deeply dualised Polish labour market. Since the economic transformation after 1989, work performed outside standard employment relationships has become a durable and systemic feature of the Polish economy, rather than a marginal phenomenon. Alongside employment contracts, large segments of the labour market came to rely on civil-law contracts and forms of self-employment that offered lower labour costs and greater organisational flexibility.

The economic incentives sustaining this model were significant. Standard employment relationships entail full social security contributions, dismissal protection, paid leave, working-time obligations, and the transfer of economic risk to the employer. By contrast, civil-law contracts and self-employment often reduce these burdens or shift part of the risk onto the worker. Over time, these arrangements became not merely tolerated, but effectively normalised within labour market policy. Rather than consistently attempting to eliminate non-employment forms of work, the Polish state frequently extended selected protective mechanisms to them, thereby stabilising a dual structure of labour market participation.

At the formal legal level, the Polish Labour Code appears to adopt a relatively clear and objective model for distinguishing employment from non-employment. Article 22 of the Labour Code provides that an employment relationship exists where work is performed personally, for remuneration, under the employer’s direction, and at a place and time designated by the employer. The provision further states that the existence of an employment relationship depends on the actual conditions under which work is performed rather than on the contractual label chosen by the parties.

In practice, however, the application of Article 22 never produced a fully stable legal test. Polish Supreme Court case law developed in several partially competing directions.

One line of jurisprudence emphasised the objective features of employment and treated the contractual label as irrelevant where work was in fact performed under conditions of subordination and economic dependence (for example Supreme Court judgments of 7 April 1999, I PKN 642/98, and 5 May 2010, I PK 8/10). A second strand placed greater emphasis on contractual autonomy and accepted that the parties may legitimately choose civil-law forms of work even where certain elements resemble employment relationships (for example Supreme Court judgment of 5 September 1997, I PKN 229/97).

Most importantly, a third line of case law developed a mixed model. In borderline situations, where features of employment and civil-law work appeared with comparable intensity, courts increasingly referred to the parties’ common intention and the purpose of the contract (for example Supreme Court judgments of 18 June 1998, I PKN 191/98, and 2 September 1998, I PKN 293/98). At the same time, the concept of subordination itself evolved. More recent judgments accepted forms of “autonomous subordination”, based less on direct supervision and more on control of tasks and results (for example Supreme Court judgment of 10 May 2018, I PK 60/17).

As a result, the boundary between employment and non-employment became increasingly difficult to define in practice. The instability of the jurisprudence became so visible that the Supreme Court itself acknowledged that, in borderline cases, it was possible to selectively invoke judgments supporting opposite conclusions (Supreme Court judgment of 19 March 2013, I PK 223/12).

The problem confronting the new reform was therefore not simply the lack of enforcement powers. It was the absence of a fully coherent and predictable test for determining who is legally considered an employee.

The Reform: Politically Necessary, Doctrinally Unresolved

The reform of the National Labour Inspectorate was not primarily the result of a long-term doctrinal evolution within Polish labour law. Rather, it emerged under political and institutional pressure connected with the implementation of Poland’s National Recovery and Resilience Plan (KPO). One of the commitments linked to the EU recovery funding concerned measures aimed at reducing labour market segmentation and limiting the misuse of non-employment forms of work.

Originally, the government intended to address this issue mainly through the extension of full social insurance contributions to mandate contracts. The objective was straightforward: reducing the economic attractiveness of civil-law employment by narrowing the cost gap between employment contracts and non-employment forms of work. However, this proposal encountered strong resistance from employer organisations and was ultimately abandoned.

The reform of the Labour Inspectorate consequently became a substitute mechanism through which the government attempted to demonstrate progress in combating labour market dualisation. Instead of changing the economic incentives behind non-employment work, the legislature chose to strengthen enforcement mechanisms intended to identify disguised employment relationships.

The draft implementing this approach was submitted to Parliament as bill no. 2250. In its original form, the proposal was based on a relatively strong administrative model. Labour inspectors were to receive the authority to issue binding administrative decisions establishing the existence of an employment relationship where work was performed under the conditions defined in Article 22 of the Labour Code. The underlying logic appeared relatively coherent: if the employment relationship is determined by the factual manner in which work is performed, rather than by the contractual label, then the state should possess an effective administrative instrument capable of enforcing this principle.

Importantly, the original proposal largely reflected the objective model traditionally associated with Article 22. The central question was supposed to concern the actual organisation of work rather than the contractual preferences declared by the parties.

During the legislative process, however, the reform underwent significant softening. Additional procedural guarantees were introduced, and the model gradually shifted away from a strong administrative determination towards a more cautious and evaluative mechanism. These modifications reflected growing political and constitutional concerns regarding excessive state interference with contractual autonomy and freedom of economic activity.

The most significant change appeared at a late stage of the legislative process. The final version of the statute introduced an explicit requirement that labour inspectors take into account the intention of the parties when assessing the legal nature of the relationship, provided that such intention does not aim to circumvent the law.

This amendment has major systemic implications. The issue of whether, and to what extent, party intention should influence employment classification has long been one of the most controversial and unstable questions in Polish labour law doctrine and Supreme Court jurisprudence. Introducing such a provision into the regulation therefore did not concern a minor procedural detail, but rather one of the core interpretative elements shaping the employment test itself.

The manner in which this change was introduced is particularly striking. A doctrinally significant modification affecting an already unstable area of law appeared only in the final stages of the legislative process, without resolving the broader tensions surrounding the interpretation of Article 22. Instead of clarifying the classification framework, the legislature effectively embedded existing ambiguities directly into the new enforcement mechanism.

As a result, the final reform became a compromise between conflicting pressures: EU conditionality linked to the KPO, political demands for stronger action against bogus self-employment, constitutional concerns about state intervention, and the absence of a coherent doctrinal consensus regarding the legal test of employment. The outcome is a reform that formally strengthens the powers of the Labour Inspectorate while simultaneously increasing the interpretative complexity surrounding employment classification itself.

Why the Reform May Increase Uncertainty Rather Than Reduce It

The final shape of the reform creates a fundamental tension between the formal structure of Article 22 of the Labour Code and the new mechanism designed to enforce it. Importantly, Article 22 itself remained unchanged throughout the legislative process. The statutory definition of an employment relationship continues to rely on objective criteria related to the factual manner in which work is performed.

In theory, the legal model therefore remains the same. What changed was the enforcement framework.

Under the previous system, the ambiguity surrounding employment classification was concentrated primarily within judicial practice. Courts struggled to apply Article 22 consistently, but the statutory provision itself continued to present an ostensibly objective model. The new reform transfers part of this interpretative conflict into administrative proceedings conducted by the Labour Inspectorate.

The problem is not simply that labour inspectors received stronger powers. The more important issue is that they must now exercise these powers within a framework that explicitly combines objective and subjective elements. On the one hand, inspectors are still expected to assess the actual conditions under which work is performed. On the other hand, the amended legislation now requires them to consider the parties’ intention when determining the nature of the legal relationship.

This significantly increases the discretionary dimension of the employment test. The reform does not establish a fully subjective model of classification, but it clearly moves away from a purely objective one. Labour inspectors are no longer asked only whether the factual conditions of work correspond to Article 22. They must also evaluate whether the parties genuinely intended to create a non-employment relationship and whether that intention should influence the final legal assessment.

In practice, this may further destabilise an area of law that was already characterised by inconsistent jurisprudence. Borderline forms of work, particularly economically dependent self-employment and highly organised civil-law work, are unlikely to become easier to classify under the new model. The opposite may occur: inspectors and labour courts may increasingly rely on different combinations of objective and subjective criteria, producing even less predictability in difficult cases.

This risk becomes particularly visible in sectors where contemporary forms of work already blur traditional distinctions between employment and autonomy. The concept of “autonomous subordination” developed in Supreme Court jurisprudence had already expanded the category of employment beyond classical hierarchical supervision. The new legislation adds another layer of interpretative complexity without clearly indicating how conflicts between factual subordination and contractual intention should be resolved.

Much of the public debate in Poland nevertheless focused on a different issue. Critics of the reform concentrated primarily on the expansion of state power, arguing that the Labour Inspectorate received excessive authority to interfere with private contractual relationships. The constitutional debate surrounding freedom of economic activity and freedom of contract became the dominant political narrative, culminating in the President’s decision to refer the statute to the Constitutional Tribunal.

These concerns are not insignificant. However, they may obscure a more structural problem. The most important consequence of the reform may not be excessive state intervention, but rather the further weakening of legal predictability in determining employment status.

Paradoxically, a reform intended to strengthen labour law enforcement may ultimately reduce confidence in the stability of the employment classification framework itself. Instead of resolving the long-standing ambiguity surrounding the boundary between employment and non-employment, the legislature incorporated that ambiguity directly into the new administrative mechanism. In this sense, the reform may institutionalise interpretative uncertainty rather than eliminate it.

A Transitional Reform in a Wider European Debate

The Polish reform should also be viewed within a broader European and international discussion concerning the classification of work relationships in increasingly fragmented labour markets. The problem addressed by the amendment is not unique to Poland. Similar tensions between formal contractual autonomy and the factual reality of economically dependent work have long appeared in debates concerning platform work, bogus self-employment and the limits of labour law protection.

In many respects, the reform moves in the opposite direction from the logic underlying International Labour Organization Recommendation No. 198 concerning the employment relationship. Adopted in 2006, Recommendation R198 sought to strengthen clarity and legal certainty by emphasising the factual circumstances under which work is performed rather than the contractual form chosen by the parties. Its underlying assumption was that disguised employment relationships should be identified through objective indicators linked to the real organisation of work.

The recent EU Platform Work Directive similarly reflects a tendency toward reinforcing objective criteria for identifying employment relationships, particularly in situations involving algorithmic control and economic dependency. Although the directive does not eliminate national differences, it is built around a relatively binary distinction between employees and genuinely self-employed persons.

The Polish legal system, however, developed along a different path. For many years it has operated through a tripartite structure composed of employees, civil-law workers and self-employed individuals. Rather than eliminating non-employment forms of work, Polish labour market policy frequently adapted to their expansion by extending selected protective mechanisms outside the employment relationship itself (like minimum wage).

This broader context matters because the new reform does not resolve the underlying tension between objective and subjective models of employment classification. Instead, it transfers that tension into the administrative sphere and embeds it directly within the enforcement mechanism itself. The reform may therefore prove to be only a transitional stage before much larger conflicts emerge during the implementation of the Platform Work Directive and future debates concerning the boundaries of labour law protection. Ultimately, the Polish reform does not eliminate ambiguity surrounding employment classification. It institutionalises it.