Month: May 2025

The Supreme Court ruled on 24 February 2021 that the creditor is not liable for satisfying claims from funds mistakenly transferred to the debtor’s account (case ref. SN III CSKP 59/21). The bank managing the client’s account cannot be held liable either. The Court upheld the bank’s cassation complaint and referred the case back to the appellate court for reconsideration.

Factual Background

On 26 April 2016, a bailiff seized the bank account of K. P. at the Cooperative Bank in S. On 5 May 2016, the plaintiff transferred PLN 120,979.85 to K. P.’s bank account, indicating VAT invoices dated 21 April 2016 and 22 April 2016 as the payment reference. Both invoices listed R. M. as the seller, and the plaintiff company as the buyer. On 10 May 2016, the plaintiff requested the defendant to release PLN 120,979.85 from seizure on K. P.’s bank account, stating the amount had been mistakenly transferred by the company.

On the same day, the plaintiff also asked the defendant (the bank) to release the amount, again indicating the transfer was made in error. The next day, the plaintiff submitted a similar request to the bailiff. Both the bank and the bailiff refused to release the funds. Eventually, the bailiff transferred PLN 98,000 of the seized PLN 107,000 to the creditor K. P., i.e., the defendant bank. The remainder was allocated to cover enforcement costs.

The aggrieved company sued the bank, claiming it caused damage by seizing amounts belonging to the company on K. P.’s account. The district court dismissed the claim, stating that the plaintiff has no claim for damages against the defendant under Article 415 of the Civil Code, and that unjust enrichment occurred not on the part of the defendant but on the account holder’s side (K. P.), whose debt to the defendant bank was satisfied following the seizure of funds from his bank account.

The appellate court ruled that the bank was aware the debtor had received funds due to a mistaken transfer and therefore should return them to the company (the debtor returned the remaining mistakenly received amount). Since the bank knew the debtor was not entitled to the funds, unjust enrichment occurred. The bank appealed this decision to the Supreme Court.

Supreme Court’s Position

The Supreme Court recalled that under Article 725 of the Civil Code, by a bank account agreement, the bank undertakes vis-à-vis the account holder, for a fixed or indefinite time, to store their funds and, if agreed, to execute payment transactions at their instruction. Upon depositing funds, the account holder acquires a claim against the bank for payment of those funds. When the deposit consists of cash (coins or banknotes), ownership transfers to the bank.

The Supreme Court agreed with the appellate court’s finding that the bank account agreement binds the bank to store the account holder’s funds, not those of third parties with whom it has no legal relationship. The account holder has a claim against the bank to withdraw funds held in the account. Until the entry in the bank account is corrected, it also serves a constitutive function, constituting a substantive legal basis for the account holder’s disposal of the funds.

In this case, the Supreme Court concluded that upon the plaintiff’s transfer of PLN 120,979.85 to K. P.’s bank account, the bank became entitled to those funds. The subject of the seizure was K. P.’s claim against the bank to withdraw that amount.

Therefore, it cannot be justifiably claimed that the defendant bank was unjustly enriched (Article 405 of the Civil Code). Under this provision, the prerequisites for a claim for unjust enrichment are: gain (enrichment), loss (at the expense of the other party), and a property transfer from one party to another. To qualify as “unjust,” the transfer must have occurred without justification under applicable law. The Supreme Court also stressed that unjust enrichment cannot result from legal acts performed by third parties.

Verification of the Recipient’s Account Number

The Supreme Court’s stance frees the bank from liability to the sender of a mistaken transfer if the sender erred in entering the account number in the payment order. Particularly in commercial transactions, it is crucial to carefully verify recipient details and bank account numbers before executing a transfer. The consequences may be difficult to reverse, especially when the account owner is subject to enforcement proceedings.

In previous articles, we addressed the most significant changes introduced by the Polish Deal, including those concerning the health insurance contribution, leasing, employment legality, and new issues related to running sole proprietorships. We also mentioned ways to mitigate or avoid certain burdens, for example, by paying remuneration to board members based on an appropriate legal basis or changing the form of the business activity conducted.

Below is a summary of other key elements of the government’s amendment package. The issues described are significant for both entrepreneurs and employees.

Tax-Free Amount

For individuals taxed under the progressive scale, it will be important that the tax-free amount increases to PLN 30,000 for everyone regardless of income level. In practice, PLN 5,100 will be deducted from the tax. A new threshold for the first tax bracket will also be introduced at PLN 120,000. This means that income up to PLN 120,000 will be taxed at 17% minus PLN 5,100 (tax-reducing amount), and income above PLN 120,000 will be taxed at 32%.

Health Insurance Contribution

For entrepreneurs taxed under the progressive scale, the health insurance contribution will amount to 9% of income (as for employees). Entrepreneurs on the flat tax will pay a health contribution of 4.9% of their income from 2022, but at least PLN 270.90 (9% of the minimum wage). Importantly, the health insurance contribution will not be deductible from tax, nor will it be included in tax-deductible costs.

Thus, the method for determining the health insurance contribution base will undergo fundamental changes from the new year. From January 2022, it will depend on income, while for lump-sum taxpayers a fixed monthly amount will be required. For taxpayers on the lump sum tax card, the contribution will always be 9% of the minimum wage. However, only those who used this form in the current year will be able to choose the tax card next year. Meanwhile, limited partners in limited partnerships or the sole shareholder of a limited liability company will pay a fixed contribution of approximately PLN 550 per month.

Joint Annual Tax Return

Until now, preferential tax settlement applied both to spouses and to a single parent raising a child. It is worth noting that spouses had to be married for a full year to benefit from joint filing. The Polish Deal introduces a change allowing preferential joint filing already during the first year of marriage.

From 2022, i.e., in returns filed in 2023, single parents raising children will lose the right to file jointly with their child. Instead of joint filing, the parent will deduct PLN 1,500 under a new relief. This deduction will not be divided by months or days of child care per parent, nor will it be shared between parents. This relief will be available only to taxpayers taxed under the progressive scale.

Middle-Class Relief

The so-called middle-class relief has been in effect since the beginning of the current year. In principle, it is to be automatically calculated by the employer, but this will not always be advantageous for the employee.

The relief applies to employees earning between PLN 5,701 gross and PLN 11,141 gross per month (i.e., PLN 68,412 to PLN 133,692 annually). The purpose of the relief is to compensate for the negative tax effects of the Polish Deal (mainly related to the new method of calculating the health insurance contribution). However, automatic monthly calculation of the relief carries some risk. If an employee qualifies for the relief during certain months in 2022 but their annual income exceeds the thresholds set by law, they will face a tax underpayment after the annual settlement, which must be fully repaid to the tax office. The same consequence will apply if the form of employment changes resulting in lower earnings. Receiving monthly wages below PLN 5,701 gross will cause the loss of the relief, which will lead to the need to repay the tax.

It is therefore worth considering not applying the relief each month but settling it once a year in the annual tax return. This can be done by submitting a request to the employer to not apply the middle-class relief.

New Cash Transaction Limit

According to the new wording of Article 19(2) of the Entrepreneurs’ Law, the cash transaction limit has been lowered from PLN 15,000 to PLN 8,000. Payments between entrepreneurs related to business activity exceeding this limit must be made via the entrepreneur’s payment account. Transactions in foreign currencies are converted to PLN at the average exchange rate published by the National Bank of Poland on the last business day before the transaction.

Additionally, Article 7b has been added to the Consumer Rights Act, stating that consumers must make payments via a payment account if a single transaction with an entrepreneur (regardless of the number of payments resulting from it) exceeds PLN 20,000 or its equivalent. Foreign currency transactions are converted as described above.

The End of Depreciation on Residential Properties

According to changes in the Personal Income Tax Act effective from January 2022, depreciation will no longer apply to:

• residential buildings including lifts;
• residential premises constituting separate properties;
• cooperative ownership rights to residential premises;
• rights to a single-family house in a housing cooperative;

used for business activities or leased/rented under contract.
Exceptionally, due to transitional provisions, depreciation on the above assets acquired or produced before 1 January 2022 will be allowed until 31 December 2022. Entrepreneurs should therefore carefully consider potential investments in real estate intended for business use.

The State Treasury’s right to acquire the assets of companies free of charge, if they failed to re-register within the specified deadline in the new National Court Register established in 2015, is unconstitutional — ruled the Constitutional Tribunal in its judgment of 11 December 2019 (case no. P 13/18).

Under the transitional provisions introducing the National Court Register Act, companies were obliged to register in the new register by the end of 2015. If they failed to meet this obligation, the assets of companies that did not re-register within the specified period were acquired free of charge by the State Treasury.

A constitutional question was submitted to the Tribunal concerning the compliance of this regulation with the Constitution. The case involved a shareholder of a non-re-registered company whose assets, including co-ownership of real estate in Warsaw, were acquired by the State Treasury.

The Constitutional Tribunal, in a unanimous verdict, found the provision unconstitutional. The Tribunal stated that depriving shareholders of their proprietary rights to participate in the company’s liquidation assets is neither purposeful nor necessary, and as such, constitutes an excessive burden. Consequently, the regulation was deemed an unacceptable legislative interference in property rights, whose scope and content cannot be arbitrarily restricted.

As the Tribunal emphasised: “The legislator cannot arbitrarily shape the content and limits of individual property rights.”

The objective of encouraging economic entities to re-register did not, in the Tribunal’s view, justify depriving shareholders of their property rights. The Tribunal also pointed to another consequence of failing to file the re-registration application on time, namely the loss of legal personality of the companies. This outcome was considered sufficient to achieve the legislator’s intended purpose.

https://sip.lex.pl/orzeczenia-i-pisma-urzedowe/orzeczenia-sadow/p-13-18-nieodplatne-nabywanie-mienia-przez-skarb-522843657 — full text of the Constitutional Tribunal’s judgment.

In the pages of Gazeta Prawna, legal counsel Anna Błaszak describes the process of employer liquidation and the legal solutions available to an employer undergoing liquidation.

We invite you to read the article!

https://prawo.gazetaprawna.pl/artykuly/1469567,co-to-jest-likwidacja-pracodawcy-i-z-czego-moze-skorzystac-likwidowany-pracodawca.html

Any entity employing at least 20 employees is subject to the provisions of the Act of 13 March 2003 on special rules for terminating employment relationships with employees for reasons not attributable to the employees (Journal of Laws No. 90, item 844, as amended). The provisions of this Act provide for severance payments to employees dismissed for reasons attributable to the employer. The amount of the severance pay depends on the length of service and amounts to one, two, or three months’ salary. The severance payment must be made to the employee on the last day of the employment relationship. In practice, employers often question whether social security contributions and income tax advances should be deducted from the severance payment.

According to § 2 section 1 point 3 of the Regulation of the Minister of Labour and Social Policy of 18 December 1998 on detailed rules for determining the basis for calculating contributions to pension and disability insurance, the following are excluded from the basis for calculating social security contributions:

– severance payments, compensations and reimbursements paid to employees due to the expiry or termination of the employment relationship, including termination for reasons attributable to the employer, unjustified or unlawful dismissal, dismissal without notice, shortening of the notice period, failure to issue or late or incorrect issuance of the work certificate.

The payments listed in this provision are exempt from social security and health insurance contributions regardless of their amount. The provision contains no limitations in this regard. Moreover, it is irrelevant whether the additional severance pay that a company intends to pay to dismissed employees is due to them under labour law or paid at the employer’s initiative. For the exemption from social security contributions under § 2 section 1 point 3 of the aforementioned regulation, a direct connection between the termination of employment and the severance payment is required. Severance payments made to employees dismissed for reasons not attributable to them (e.g. economic reasons) are exempt from contributions.

However, in the case of tax exemption, although Article 21 section 1 point 3 of the Personal Income Tax Act states that compensations or damages received are exempt from taxation if their amount or rules of calculation result directly from separate laws or executive regulations issued under those laws, severance payments made under the Act on special rules for terminating employment relationships for reasons not attributable to the employees are explicitly excluded as an exception in letter b) of this provision. This means that the discussed severance payment is subject to taxation. The severance payment paid to the dismissed employee constitutes income from employment, and the employer is obliged to withhold income tax advances when paying it.

In summary, severance payments made to employees dismissed under collective or individual redundancies based on the Act on special rules for terminating employment relationships for reasons not attributable to employees are exempt from social security contributions but are not exempt from taxation.

On 9 July, Members of the European Parliament voted through the Mobility Package – three legal acts introducing significant changes in regulations concerning drivers’ working conditions (especially working hours, breaks and rest periods), posting of workers, road controls, as well as the carrier profession and access to the transport market. The first part of the new regulations has been in force since 20 July, while the remaining provisions (mainly regarding posting of workers) will enter into force 18 months after the directive’s publication, i.e. in the second half of 2021.

The driver as a posted worker

The biggest and most controversial change is introduced by the so-called Posting of Workers Directive. According to its provisions, drivers will be treated as posted workers. The employer will be obliged to pay the driver the minimum wage applicable in the country where they are currently working. Often these rates are two to three times higher than in Poland, from which income tax and social security contributions will have to be paid.

Moreover, drivers will no longer be able to count on allowances, per diems or bonuses to the same extent as before, which until now were granted due to business travel and often constituted the majority of their salary. Employers did not have to pay contributions or income tax on these payments, as these obligations only concerned the basic salary. Under the new regulations, payment of per diems and allowances will be treated as payment of part of the basic salary both by the Social Insurance Institution (ZUS) and tax authorities. This will therefore entail the deduction of appropriate tax and social security contributions on those amounts.

Mandatory return and rest

The Package also introduces the obligation for every lorry to return to its base at least once every 8 weeks. Additionally, the driver should return to their home country at least once every 4 weeks. If two shortened weekly rest periods are taken consecutively without return, the carrier will have to organise the driver’s schedule so that they can return by the end of the third week. From the day the new regulations enter into force, it will also be prohibited to spend the weekend 45-hour rest period in the cab.

Exemptions

The Package provides exceptions from the application of the posting rules to drivers. In the case of bilateral transport, there will be no obligation to pay the minimum wage applicable in the country where the work is performed. Bilateral transport covers the carriage of goods from the country of the company’s registered office to another country. The regulations allow a single loading or unloading en route to the destination country and one on the way back. It is permissible to waive this option on the way to the destination and use two loadings or unloadings on the return journey. The Posting of Workers Directive will not apply to international transit, i.e. when goods are transported to another country through the territory of a third country, the employer will not have to pay the minimum wage applicable in the third country (for example, transport from Poland to France will not require paying the minimum wage applicable in Germany).

However, the amendment does not exclude transport performed within a foreign country, i.e. so-called cabotage. In this respect, a 4-day rest obligation has also been added. The new posting rules will also apply to cross-trade transport, i.e. where the carrier is not established in any of the countries where the transport is carried out.

New standard for controls

Compliance control with the standards introduced by the directive will be based on a system of intelligent tachographs. These devices will register the place and time of each border crossing, loading and unloading. This will obviously require carriers to provide the appropriate equipment. According to the new regulations, they will have time until 2023 to comply, and if using older analogue and digital models, until the end of 2024.

Controversies

The adoption of the EU regulation was opposed by some Eastern European countries, including Poland. Opponents argue that the amendment granting drivers the minimum wage applicable in the country where they currently work will complicate payroll calculations and additionally burden accounting. Furthermore, extending the scope of the basic salary to include per diems and allowances will increase the drivers’ salary base, on which employers must pay social security contributions and income tax. Employers point out that this will lead to a significant increase in employee maintenance costs and may result in smaller companies being eliminated from the market. The strict rules concerning rest periods will reduce the number of trips made, and consequently, carriers will lose additional financial benefits.

The Polish Road Transport Institute also raises environmental concerns. Empty runs are expected to increase fuel consumption and CO₂ emissions, which contradicts the EU’s efforts to reduce carbon dioxide emissions and improve air quality. Employers warn that transport efficiency will decrease, bureaucracy in the transport sector will increase, and many companies currently operating on the market will become unprofitable.

On 24 June, most provisions of the Act on Interest Subsidies for Bank Loans Granted to Ensure the Financial Liquidity of Entrepreneurs Affected by the Effects of COVID-19, also known as the “Anti-Crisis Shield 4.0”, came into force. This legal act contains further solutions aimed at counteracting the effects of the COVID-19 pandemic present in the Polish economy. What forms of support does the government propose for entrepreneurs and employees?

Key solutions of the Anti-Crisis Shield 4.0

• Interest subsidies for bank loans

These will apply to loans granted to entrepreneurs based on loan agreements concluded from the date the Act enters into force, and if agreements were concluded earlier, provided they are adjusted to meet the Act’s requirements. Loan agreements with subsidies may be concluded until 31 December 2020. The provisions on interest subsidies have been clarified so that they no longer constitute income. However, it is also stipulated that only companies without arrears in instalment payments may benefit. Thanks to amendments, microloans for micro-enterprises will be exempt from enforcement and automatically written off. BGK publishes on its website a list of banks granting loans with subsidies. The funding includes, in the case of micro, small and medium-sized enterprises, 2 percentage points, and for others 1 percentage point.

• Simplified restructuring procedure

New regulations enable entrepreneurs to launch so-called quick restructuring, which does not require court involvement. It is only necessary to conclude an agreement with a specific restructuring advisor, prepare a settlement proposal, a list of receivables, and a list of disputed receivables, then submit them to the arrangement supervisor and publish the relevant notice in the Court and Economic Monitor. The procedure allows protection of the debtor against termination of certain contracts, e.g., lease, tenancy, or leasing agreements. The entrepreneur must conclude an arrangement with creditors within four months. Quick restructuring is also attractive cost-wise, as the Act provides a limit on remuneration for advisors acting as arrangement supervisors for micro and small entrepreneurs. This remuneration shall not exceed 15% of the amount allocated to creditors under the arrangement provisions, and if there is no arrangement, it will amount to approximately PLN 10,000.

• Credit holidays

The so-called “credit holidays” introduced by the Act concern only loan agreements concluded before 13 March 2020 and those with repayment due more than six months after 13 March 2020. The provisions allow suspension of the repayment of the interest and principal portions of the instalment at the borrower’s request. Suspension may last up to three months from the date the request is submitted to the bank. During this period, the lender may not charge any other fees related to the loan or suspension of repayment, except for loan insurance. Within 14 days of receiving the request, the lender is obliged to confirm receipt to the borrower and inform them of the insurance contract fees. The loan term and other deadlines specified in the loan agreement will be extended by the period of suspension accordingly. If the borrower has more than one loan, they must choose one loan for which they will use the credit holidays.

• Changes in labour law

The amendment allows entities which, despite a drop in economic turnover due to coronavirus, did not decide to implement economic downtime, downtime under Article 81 of the Labour Code, or a reduction in working time, to receive wage subsidies from the Guaranteed Employee Benefits Fund.

At the same time, the provisions limit compensation, severance pay, and similar benefits payable on termination of employment to an amount not exceeding ten times the minimum wage (currently PLN 2,600 gross). This limitation will also apply in the case of termination or expiry of contracts of mandate, contracts for specific work, or cessation of paid function performance, excluding agency contracts.

The possibility to introduce economic downtime or reduce working hours for six months has been expanded to include cases of revenue decline causing a significant increase in the wage fund burden.

The Act also clarifies provisions regarding remote work, accrued leave, and allows suspension of deductions to the company social benefits fund. Since the Act’s entry into force, remote work may be ordered if the employee has the skills and technical and local conditions to perform it. The employer provides the work tools, materials, and logistical support necessary for remote work. Moreover, according to new provisions, the employer may grant an employee, at a time indicated by the employer, without the employee’s consent and regardless of the leave plan, unused annual leave from previous calendar years, up to 30 days. The employee is obliged to use this leave.

New provisions also allow termination of non-compete agreements by both employers and employees. Employers, as well as contractors and ordering parties, have the right to unilaterally terminate a non-compete agreement binding after the end of the given legal relationship. Upon expiry of the agreement, the obligation to pay compensation beyond the term of the agreement will also cease.

• Provisions preventing foreign takeovers

Among the most controversial provisions of the Act are those aimed at protecting Polish companies from being taken over by enterprises that could exploit the difficult situation caused by the pandemic. Whether a takeover qualifies as “hostile” is decided by the President of the Office of Competition and Consumer Protection (UOKiK). Companies of strategic importance are subject to special protection. These include enterprises involved in creating IT infrastructure, fuel trading, heat production, and processing vegetables, meat, and fruit. To be covered by protection, a company must meet the condition of achieving, in one of the last two financial years, the relevant revenue from sales of goods and services on Polish territory, i.e., exceeding €10 million in revenue. Acquisition of such enterprises must be preceded by a proper notification submitted to UOKiK and obtaining consent from the competent authority. Failure to comply with this requirement may result in severe penalties – a fine of up to PLN 50 million or even imprisonment.

From 30 July 2020, new rules concerning the posting of workers within the framework of the provision of services in European Union countries will come into force. By that date, EU Member States are obliged to implement the relevant national provisions to transpose Directive (EU) 2018/957 of the European Parliament and of the Council of 28 June 2018.

The changes will primarily concern wages and the duration of posted workers’ assignments. The Member States’ regulations are intended as a means to harmonise and streamline the system of posting workers. This will entail new obligations and restrictions for employers.

Employers’ obligations and rights

One of the most significant changes resulting from the implementation of the Directive is the distinction of the conditions that must be guaranteed to a posted worker depending on the length of the posting.

Until now, the rules on posting duration used a general concept of “temporariness”. The new regulations introduce a fixed posting period of 12 months. After this period expires, posting will be conditional on the employer providing all employment conditions stipulated by the host country’s legislation, which, in turn, is obliged to treat posted workers as local workers.

Employment conditions should be understood as all provisions of the host country’s legislation, excluding rules related to procedures, formalities, conditions for concluding and terminating employment contracts, including non-compete clauses, as well as supplementary employee pension schemes.

It should be noted, however, that according to the new regulations, provisions obliging the application of the host country’s law will not prevent the application of more favourable employment conditions from the home country.

An employer posting workers may submit a justified notification to the competent authority in the country where the work is performed (in Poland, to the National Labour Inspectorate) to extend the maximum posting period to 18 months. When calculating the posting period, periods of replacement of employees in the same position shall be taken into account.

Employees’ remuneration

The employer’s obligation to ensure the same working conditions that apply in the posting country implies the payment of wages on the same terms as for a citizen of the host country performing the same job. This is the implementation of the so-called “equal pay principle”.

To ensure the fulfilment of these obligations, Member States will have to provide information on wages arising from laws, sectoral and regional collective agreements. This means that the method of calculating wages will no longer be based solely on minimum rates applicable in the host country but will derive from all the aforementioned data.

Strengthened role of the National Labour Inspectorate in Poland

In Poland, the National Labour Inspectorate has been primarily tasked with supervising the implementation of the standards introduced to transpose the Directive. Its powers have been significantly enhanced and include matters related to acting as a liaison institution responsible for cooperation with competent authorities from other countries in areas such as: providing information on the employment conditions of posted workers to Poland, reporting irregularities and offences related to posting, submitting requests to conduct inspections, and carrying out inspections at the request of authorities from other countries.

On 16 July 2020, the Court of Justice of the European Union (CJEU) delivered its judgment in the case AFMB and others (case C-610/18). The Court ruled that the employer of truck drivers engaged in international road transport is the transport company which exercises actual control over those drivers, effectively bears the relevant wage costs, and is genuinely entitled to dismiss the driver, rather than the company with which the truck driver concluded the employment contract and which is formally indicated in that contract as their employer.

Dispute concerning social security

AFMB Ltd — a Cypriot company designated in the contract as the employer, with the drivers indicated as its employees — contested decisions of the Raad van bestuur van de Sociale verzekeringsbank (Board of the Social Insurance Bank, Netherlands) (“Svb”), whereby it was held that Dutch social security legislation applied to those drivers. Svb argued that only transport companies based in the Netherlands should be recognised as the employers of those drivers, and thus Dutch social security law should apply, whereas AFMB Ltd and the drivers maintained that AFMB Ltd should be regarded as the employer and, given its seat in Cyprus, Cypriot legislation should apply. AFMB Ltd had entered into agreements with transport companies based in the Netherlands, under which it undertook, in return for a commission, to manage the trucks of those companies on their account and risk.

CJEU’s position

The Dutch national court referred questions to the CJEU asking whether the employer should be considered the Dutch transport companies or the Cypriot AFMB, a determination crucial for establishing the applicable social security legislation. As a rule, the applicable legislation is that of the Member State where the employer has its registered office or place of business. However, the issue of which entity should be attributed the status of employer raised doubts for the court.

In its reasoning, the CJEU referred to the subordination relationship that should exist between the employer and their personnel. The Court also stressed the need to consider the objective situation of the employee and all the circumstances of their employment. While the conclusion of an employment contract may be indicative of the existence of a subordination relationship, that fact alone does not decisively establish such a relationship. One must also consider not only the formal information contained in the employment contract but also the way in which the obligations incumbent upon both the employee and the enterprise are performed in practice. Irrespective of the wording of the employment contract, it is necessary to determine the entity to whose actual management the employee is subject, which effectively bears the relevant wage costs and is genuinely entitled to dismiss that employee.

According to the CJEU, an interpretation based solely on formal considerations, such as the conclusion of an employment contract, would allow companies to transfer the place that should be regarded as relevant for determining the applicable national social security legislation. Such a transfer would be contrary to the objective of Regulations No 1408/71 and No 883/2004, which aim to guarantee the effective exercise of the free movement of workers. Noting that the system established by those regulations is intended solely to support coordination of national social security legislation, the Court held that the objective pursued could be jeopardised if an interpretation allowed companies to make use of entirely artificial arrangements to exploit differences between national systems to their advantage.

In the present case, the Court found that the drivers appear to be part of the personnel of the transport companies, and those companies seem to be their employers, so that Dutch social security legislation appears to apply to them. However, that determination is for the national court. Before concluding contracts of employment with AFMB, those drivers were chosen by the transport companies themselves, and after concluding those contracts, they carried out their activities on the account and at the risk of those companies. Furthermore, the actual costs of their remuneration were borne by the transport companies through the commission paid to AFMB. Finally, it appears that the transport companies were genuinely entitled to dismiss the drivers, and some drivers were already employees of those companies before concluding employment contracts with AFMB.

The case will be decided by the national court

It should be remembered that a preliminary ruling allows national courts, within the dispute before them, to request the Court of Justice to interpret EU law or assess the validity of an EU act, but the Court does not resolve the national dispute itself. It is the national court which, having received the Court’s ruling, must decide the case in accordance with that ruling. If other national courts encounter a similar issue in ongoing cases, they will be bound by the legal interpretation provided by the CJEU.

The Supreme Court, in its judgment of 23 June 2020 (case ref. V CSK 506/18), ruled that when issuing bonds in a private placement, the mortgage security holds significant marketing importance; therefore, purchasers must be provided with all information relating to the real estate. The case concerned the sale of bonds secured by mortgages on 28 properties valued at PLN 42 million, which, however, belonged to third parties and not to the issuing company.

Company bankruptcy and purchaser’s lawsuit

The purchaser bought 300 bonds from the issuing company at a price of PLN 10,000 each. The company failed to redeem the bonds within the contractual deadline and subsequently declared bankruptcy. The purchaser claimed compensation resulting from the purchase of bonds from the company’s board members amounting to over PLN 3 million (plus interest).

The claimant based his claim on Article 415 of the Civil Code (tort liability), according to which anyone who causes damage to another through their fault is obliged to remedy it. The claim was dismissed as unfounded. The first-instance court found that the purpose of the issuance was correctly stated, the claimant was not misled, and no information necessary for making a decision to purchase the bonds was concealed. The error was attributed to the claimant for not reviewing the documentation before purchasing the instruments from the company. The purchaser argued, however, that despite the availability of property valuations securing the bonds, they could not be liquidated as they were already encumbered.

The first-instance judgment was appealed to the Court of Appeal, which subsequently dismissed the appeal. This time, the claimant based his demand on Article 484 of the Commercial Companies Code. The basis for liability was therefore the alleged concealment of information regarding the issued bonds. The Court of Appeal disagreed with this argumentation, as it did not find the defendant company’s conduct unlawful and upheld the first-instance court’s view regarding the claimant’s responsibility for not reviewing the documentation and the financial condition of the issuing company.

Supreme Court’s position

The cassation complaint was based on alleged violations of Article 10(1) and (2) of the Bonds Act of 1995, Article 415 of the Civil Code, and Article 484 of the Commercial Companies Code. In addition to arguments raised before the lower courts, the claimant’s attorney argued that the bond sale offer did not disclose the risks of purchase (as required by the Bonds Act). The claimant further maintained that there was a concealment of information about the encumbrance on the real estate serving as collateral.

The defendant, on the other hand, pointed to the proper provision of the valuation report to bondholders (without the necessity of formal delivery), as well as the financial statements and valuation by an authorised expert. The issuing company also argued that no false information was included in the offer.

The Supreme Court noted that the courts of both instances made several errors in their analysis of the case. First, they failed to assess the unlawfulness of the issuing company’s conduct in terms of informing purchasers about all the data of the offer. It was also not clearly explained what information the intermediary conveyed to the claimant, which is crucial for making an investment decision. Furthermore, the Supreme Court stated that the Court of Appeal overlooked the significant marketing importance of the mortgage security as part of the bond issuance.

Given these circumstances, the Supreme Court decided to overturn the judgment of the appellate court and remand the case for reconsideration by the Court of Appeal. At the same time, it emphasised the complex nature of the case and its considerable significance for the credibility of the capital market.