Dear Readers,
 
We wish to recommend you the September edition of WBW Weremczuk Bobeł & Partners newsletter.
First, we describe new responsibilities of employers hiring new workers on the basis of an employment contract.
Then, we inform about the changes in rules of remuneration for managers of companies, particularly these with the participation of the State Treasury.
What is more, we discuss the new EU regulations concerning market abuse prevention in capital markets.
We wish you a pleasant read.
 
The WBW team

Responsibilities of an employer hiring new workers modified

The Act of 13 May 2016 amending The Labour Code (Journal of Laws, item 910) introduced new responsibilities for employers that hire new workers. The obligations concern work contracts and staff regulations as well as well as light duty work lists for minor employees. 
 
Previously, employing workers on the basis of an oral agreement and postponing the signing of a written contract used to be a common practice. It often led to ambiguities between the employer and the employee caused by the lack of precise presentation of the employment rules and regulations that are normally included in a written contract. This is particularly important when the employee has already worked for some period. These matters are to be regulated by The Labour Code amendment, main purpose of which is to provide employees with full information on important aspect of their role before they start working. Failure to comply with the new requirements  may result in criminal liability of the employer.
 
First and most important of these responsibilities is an obligation to conclude a written work contract or a written confirmation of the parties' arrangement concerning employment,  contract type and conditions even before the employee is allowed to perform work. As a consequence, workers should be granted safeguarding of their rights as well as protection guaranteed by social insurance regulations. On the other hand, the amendment aims at limiting illegal labour.
 
Second and third responsibilities involve keeping the employee informed. The employer needs to present the staff regulations to the worker and in case of minor employees also with the light duty work list before allowing them to undertake their tasks. Before the amendment, both of these requirements had to be fulfilled before the employees could begin to work. The change of wording appears to be a cosmetic one, however it conveys an important message. The amendment makes the employer responsible for supervision over fulfilling this requirement, since the new version states that it is not the employee who makes the decision to start working but the work can be undertaken when allowed by the employer.
 
Aleksander Kamiński
lawyer
 

New EU capital market fraud prevention regulations

In recent years, financial instrument trading through multilateral trading facilities (MTF) has gained importance. There are also financial instruments traded only via organised trading facility platforms (OTF) or only traded over the counter (OTC).
As a result of abuse connected with financial instrument trading in these markets, there have been suggestions to cover all financial instruments present at the regulated market, MTF or OTF by an EU regulation. The regulation should also cover all actions that can influence these instruments, regardless of them being or not being handled in a trading venue.
 The bases for the changes are: Directive 2014/57/UE (Market Abuse Directive II: MAD II) and Regulation of the European Parliament and of the Council No 596/2014 (Market Abuse Regulation: MAR) along with implementing acts the publication of which finished at the end of June.
The key changes introduced by MAR and MAD II directives involve:
• introducing  a uniform definition of 'confidential information' and rules for handling such information (for Polish entrepreneurs this would mean particularisation of regulations on transferring information to the market). The Regulation on Current and Periodical Reports from 19 February 2009 will be repealed;
• expanding reporting responsibilities of  company bodies and of people connected with these companies, in terms of financial instrument transactions (reporting requirements by public companies will be indicated solely by the definition of confidential information and the responsibility for verifying whether a given incident should be described as confidential will lie with the company who will decide if the information should be published);
• the definition of 'market abuse' will also concern abuse within broker crossing systems as well as multilateral trading facilities;
The adopted regulations apply to financial instruments traded on the regulated market, financial instruments handled at MTF and these traded at OTF.
All EU Member States will use uniform definition of market offence connected with confidential information mishandling. Harmonisation will also involve penalty provisions covering not only prohibited activities but also inciting, aiding, abetting or attempting to commit them.
The EU countries will sanction cases of deliberate insider dealing, market manipulation or unlawful disclosure of confidential information as criminal offence punishable by a custodial sentence.
Also legal persons can be held accountable for abuse. Potential penalties will include e.g.  closing the plant used for committing the offence and  disqualification from the practice of business activity.
What is more, the regulatory organs of the financial market have received competence to issue fines equivalent to at least three times the amount the benefit generated by market abuse or minimum 15% of the turnover in cases of businesses. This is, however, the lower limit and the Member States can set the fine at a higher level.  There will also be possibility to impose financial liabilities not connected to the penalty.
The introduced regulations ban transactions under algorithmic trading strategies and  high-frequency trading that constitute a source of abuse on the commodity markets as well as the derivatives markets connected with them.
Implementation of these provisions will be carried out through e.g. enhancing cooperation between regulatory organs of the financial market and the commodity market.
The provisions of MAR  and MAD II will certainly lead to redesigning the system connected with operation of the capital market. It is important to bear in mind that  MAD II has not yet been implemented in Poland. Even though the deadline expired on 3 July 2016, the legislative process is still pending.
 
Michał Piekarz
lawyer
 

New rules of remuneration in companies

On 9 September 2016, an act regulating the manner of implementing rights attached to shareholding vested in the Treasury as well as local government entities in terms of remunerating members of the corporate bodies and supervisory authorities came into force. The name of the new law is Act on Rules of Remuneration of Managers of Companies (Journal of Laws, item 1202). The object of the Act is e.g. the manner of implementing rights attached to shareholding vested in the Treasury as well as local government entities or their associations, state legal persons and municipal legal persons in terms of remuneration for members of the management and supervisory bodies as well as terms of the contracts concluded with  members of  the management bodies.
 
The new regulations provide for changes in resolution drafts on wages of the management bodies' members. They are to state that total remuneration will consist of a specified fixed amount constituting a monthly salary and a variable amount constituting a supplementary remuneration for a financial year. The fixed amount will depend on the scope of the company's activity but primarily on the value of its assets, employment rate and revenue. The variable amount will depend on the level of achievement of the management purposes e.g. loss reduction, income growth or production volume expansion. As far as remunerating supervisory bodies' members is concerned, the Act provides that the resolution draft on wage formation should set the monthly salary for these bodies that should not exceed the product of the basis of assessment and a multiplication factor indicated in the Act (Article 10(1) of the Act). This project provides for a possibility of raising the salary of the  supervisory bodies' members up to 10% over the amount indicated above, depending on their functions in the supervisory body of the company or participation in a committee within that body. 
 
Another change concerns entities authorised to exercise share rights in companies with State Treasury participation. They are now obliged to undertake actions aiming at adopting and applying rules for remuneration of the managing body members as well as the supervisory body members indicated by the Act. To implement this, they will have to convene the General Meeting or the Shareholder Meeting and vote on resolution drafts on  remuneration of the managing body members as well as the supervisory body members and adopt a resolution in line with the Act. 
 
Marta Szurek
lawyer
This Newsletter is for general informational purposes only. It is not intended and shall not be treated as professional advice. You should contact your attorney to obtain advice with respect to any particular issue or problem.
   

Previous issues