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Науково-практична Інтернет-конференція 11.12.2013 - Секція №3
1. Introduction
The issue of protection of remuneration for work is one of the actual problems in labour law. It is a challenge, for every legislator, especially in time of global economic collapse. One of the key parts of system of protection of remuneration for work is an institution of permissible deductions from remuneration for work. It must be also underline that remuneration for work is usually the primary, if not only one, the source of maintenance worker and his family. In the literature of polish labour law the abovementioned feature of remuneration for work is called as a alimony function [1] because of her similarity to alimony payment. Role of the both of these payments is to ensure the current and constant income to entitled person, particularly for employee. Due to of this important feature of remuneration for work, the most legislators decides to give it a special legal protection. Consequently provisions governing this protection are often introduced directly to a labour codes or other national Acts.
The main frameworks for national regulations concerning the protection of remuneration for work are being established in the Convention No. 95 of the International Labour Organization on the protection of wages [2], hereinafter referred to as 'the Convention'. This Convention contains, inter alia, provisions relating to permissible deductions from wages. Beside the Convention No. 95, ILO had adopted also, in this scope, Recommendation No. 85 on the protection of wages [3], which is not the binding law. Recommendation creates only a good standard for sovereign States (it is a kind of soft law). Standards on the protection of wages are also present in certain other international legal acts adopted by regional organizations, such as the European Social Charter [4], which entered into force in 1999, and the Arab Convention No. 15 concerning the determination and protection of wages, which was adopted by the Arab Labour Conference in 1983 [5].

2. Convention No. 95 of the International Labour Organization on the protection of wages
    International Labour Organization had adopted on 1 July 1949, on 32nd ILO session at Geneva Convention No. 95 on the protection of wages. Until 2013, ninety seven States have ratified the Convention, such as, for instance: Belarus, Belgium, Czech Republic, France, Hungary, Poland, Russian Federation, Slovakia, Slovenia, Swaziland, Ukraine. After the ratification, two States both Portugal and the United Kingdom have denounced this Convention.
First, it should be explained that the Convention does not use term 'remuneration for work' like it is e.g. in Poland. The Convention uses term ‘wage’, which was defined in Article 1. Subject to this provision by wage, for purposes of this conventions, should be understood “remuneration or earnings, however designated or calculated, capable of being expressed in terms of money and fixed by mutual agreement or by national laws or regulations, which are payable in virtue of a written or unwritten contract of employment by an employer to an employed person for work done or to be done or for services rendered or to be rendered”. It seems to be that the intention of the drafters of the Convention was using the term “wages” not in a technical sense (literal meaning), such as may be present in national legislation, but rather in a generic sense covering all the various forms and components of labour remuneration [6].
According to provisions of the Convention, deductions from wages may be made only under conditions and to the extent prescribed by national laws or regulations or fixed by collective agreement or arbitration award (Article 8 Paragraph 1). Any deduction from wages with a view to ensuring a direct or indirect payment for the purpose of obtaining or retaining employment, made by a worker [7] to an employer or his representative or to any intermediary (such as a labour contractor or recruiter), are prohibited (Article 9). However, the wages may be attached or assigned only in a manner and within limits prescribed by national laws or regulations and they should be protected against attachment or assignment to the extent deemed necessary for the maintenance of the worker and his family (respectively Paragraph 1 and 2 of Article 10). These deductions have to be strictly regulated (either on international and national level) in order to protect workers from arbitrary and unfair deductions, which in effect, may lead to an unjust decrease of their remunerations.
Moreover, workers should be informed, in the manner deemed most appropriate by the competent authority, of the conditions under which and the extent to which, the above deductions may be made (Article 8 Paragraph 2). Ratio legis of this provision is the necessity to obtain the express or implied acceptance by workers of the conditions under which their earnings may be diminished by way of deduction.
    
3. Regulation in Poland
Institution of permissible deductions from remuneration for work is regulated in detail by the provisions of the Polish Labour Code [8], hereinafter referred to as “L.C.” or “the Labour Code”. The provisions of art. 87-91 L.C. governing permissible deductions from remuneration for work had established exceptions from general rule of Polish labor law that employers should pay workers remuneration in full, in a previously fixed and predetermined period of time. Researched regulations establish a closed list of situations in which an employer may – or, in some cases, has the obligation – to deduct a specific part of the remuneration on payment of employee obligations, both public law and private law character, and pay him a the remuneration reduced by this amount.
However, the very concept of protection of remuneration for work is not uniformly understood in Polish literature of labor law. Frequently, it is pointed out that protection of remuneration for work should be understood as “the totality of the substantive and procedural guarantees protection against diminution of employee wages and delay in the payment” [9]. Nevertheless some authors limit the scope of protection of remuneration for work, excluding from the scope of protection the rules governing the supervision of compliance by employers of remuneration provisions and regulations for the protection of workers' remuneration in case of insolvency proceedings [10]. It seems, however, that due to the important role of remuneration for work, both for the worker and his family, as well as for the functioning of the whole society the protection of remuneration for work should be understood as widely as it is possible. It is important for every employee, particularly from a practical point of view, that protection of their remuneration for work should not be limited to the right to receive remuneration, but also ensured the payment of remuneration in due time, as well as in agreed amount and form. In order for ensure complex security of wages, in my opinion, the concept of protection of remunerations for work shall be understood in broad sense.
Institution of permissible deductions from remuneration for work is located in the articles 87-91 of the Labour Code, in Section III Remuneration for work and other benefits, in Chapter II Protection of remuneration for work. Institution of permissible deductions from remuneration for work is located in the articles 87-91 of the Labour Code, in Section III Remuneration for work and other benefits, in Chapter II Protection of remuneration for work. It should be also emphasize that researched regulation is wholly independent and autonomous legal form, in particular in relation to civil law deductions [11]. Regardless of the above-mentioned domestic regulation, provisions governing the permissible deductions from remuneration are also present in ratified by Poland of the Convention No. 95 of the International Labour Organization of 1949 on the protection of wages, which was adopted on 1 July 1949 on 32nd ILO session at Geneva and entered into force on 24 September 1952 [12]. Polish labour law, in this scope, is fully coherent with ILO standards. Polish labour law, in this scope, is fully coherent with ILO standards.
An employer makes deductions from remuneration in the following order:
 deduction of the social insurance premiums and advance payment on natural persons’ income tax (art. 87 § 1 L.C. in principio),
 deduction of remuneration received on a previous payday for time of absence from work and for which the employee is not entitled to be paid (art. 87 § 7 L.C.),
 deduction of sums executed by virtue of enforcement titles in respect of maintenance payments (art. 87 § 1 point 1 L.C.),
 deduction of sums executed by virtue of enforcement titles in respect of payments other than maintenance payments (art. 87 § 1 point 2 L.C.),
 deduction of cash advances given to the employee (art. 87 § 1 point 1 L.C.), 
 deduction of pecuniary penalties (art. 87 § 1 point 3 in connection with art. 108 L.C.),
 deduction of sums other than the above, on the ground of the employee's consent expressed in writing (art. 91 § 1 L.C.).
Sums other than those clearly specified in the provisions of the Labour Code may be deducted from the salary of the employee only on the ground of his written consent. This construction of permitted deductions from remuneration for work was created in order to protect the employees against unlawful decrease of their remuneration.
A few remarks require the issue of definition of the remuneration for work. In scope of regulation, which relate to deduction from remuneration – as well as – in the entire Polish Labour Code is no legal definition of the remuneration. It is a serious problem for theorists and practitioners of law. This state of affairs has been criticized almost from the entry into force of the Labour Code [13]. Nevertheless, the Supreme Court is trying to resolve this legal problem in way of its case law. According to The Supreme Court by the remuneration for work should be understood: basic and additional remuneration for work, regardless of its form (both in pecuniary and in kind) and frequency of remunerate – as well as – a death benefit [14], holiday compensation [15], remuneration for employees' standby [16] and jubilee award.
    
4. Regulation in Czech Republic
Institution of permissible deductions from remuneration for work is also, in detail, regulated by the provisions of Act of 21 April 2006 The Labour Code, hereinafter referred to as ‘the Czech Labour Code’ or ‘the C.L.C.’. These provisions are placed in Chapter VIII entitled Income from Labour Relationship and Deductions in Part six entitled Remuneration for work, remuneration for standby and income deductions of the Czech Labour Code.
According to general provision of Section 145, Subsection 1 of the Czech Labour Code by deductions from an employee's income should be understood deductions from wage, salary or from an employee's other income resulting from his basic labour relationship pursuant to section 3 of the C.L.C. But ‘other employee's income’ means either: remuneration pursuant to an agreement, compensatory wage or salary (compensation for wage or salary), remuneration for standby, severance pay (redundancy payment) or similar payments provided to an employee in connection with the termination of his employment, monetary benefits, such as a loyalty or stabilization bonus, granted to an employee in connection with his employment and bonuses pursuant to Section 224(2). However, the above definition was established only for purposes of the Czech Labour Code.
Section 146 of the C.L.C. states that the any deductions from wage may only be made:
a) in the cases laid down in this Code or in another Act;
b) on the basis of an agreement on wage assignments (Section 327) or to satisfy (settle) the liabilities of the employee concerned;
c) to settle trade union membership contributions of an employee who is a member of the trade union organization provided that this has been agreed in the relevant collective agreement, or on the basis of a written agreement between the employer and the trade union organization if the employee, who is its member, has given his consent thereto.
    Pursuant to Section 147 of the C.L.C. an employer may only make the following deductions from an employee's income, on:
1. personal income tax,
2. social security insurance contributions, state employment policy contributions and general health insurance contributions,
3. advance payment on wage or salary which, the employee is obliged to refund (in case when employee did not fulfill the conditions for the payment of such wage or salary),
4. advance on travel expenses, or some other advance, having been provided to a certain employee for performance of his working tasks, if the employee have not used of those advances in right way,
5. compensatory wage or salary paid in lieu of to which the employee has lost the entitlement or to which his entitlement has not arisen.
Other statutory provisions regulate cases of an execution ordered by the court, by judicial executor, by competent tax administrator, by competent administrative authority or another administrative agency, or competent self-governing local area authority.

5. Regulation in Slovakia
Institution of permissible deductions from remuneration for work is also present in the Slovak Labour Code, hereinafter referred to as ‘the Slovak Labour Code’ or ‘S.L.C.’. A wage in the Slovak Labour Code is defined as financial settlement or settlement of a financial value (wages in kind), provided by an employer to an employee for work [17] (§ 118 subparagraph 2). However, provisions which relate directly to deductions from wage are also applied to deductions all components of the employee’s income provided by an employer.
Pursuant to paragraph 131 of the S.L.C. in the event of making deductions from pay, an employer should give priority for deductions of contributions to social insurance funds, advance payments of insurance for public health care, arrears resulting from the annual calculation of advance payments for public health insurance, contributions to supplementary pensions savings paid by the employer according to special regulations, deductions for advance payments for tax or tax payments, arrears on advance payments for tax, tax arrears, arrears resulting from errors of the tax payer in advance payments for tax and tax payments including ancillary rights and arrears for the annual calculation of advance payments for income tax from dependent activities.
After making the deductions the above specified, the employer may deduct from pay only the following:
a) advance payments of wages, which the employee must return because the conditions for payment of the wage were not fulfilled,
b) amounts seized by order of a court or administrative body,
c) financial penalties and fines and also compensation that an employee is required to pay as a result of an executable decision of a competent body,
d) incorrectly received social insurance benefits and old age pensions savings benefits or advance payments thereof, state social benefits, material need assistance benefit and additional payments for material need assistance benefit, financial compensation for the social effects of serious health disability if the employee is required to return them as a result of an executable decision in accordance with other regulations,
e) unused advance payments for travel expenses,
f) sick pay, or a part thereof that employees loses their entitlement to, or do not become entitled to,
g) holiday pay that employees loses their entitlement to, or do not become entitled to,
h) severance allowance or part thereof that the employee is required to return pursuant to §76(5) of the ‘S.L.C.’.
Other deductions from pay the employer may only make on the ground of a written agreement with the employee on deductions from pay or if other regulations require the employer to make deductions from pay (§ 131 subparagraph 3 of the S.L.C.).
In cases of financial punishments (fines) and also settlements levied by executable decisions of competent authorities and with overpayments from social security benefits, the order of deductions shall be governed according to the day the executive decision of the competent body was delivered to the employer.
Deductions from wages may only be executed to the extent provided for by special regulations, However, with regard to liabilities for which the court or administrative body has ordered execution of a decision, the manner of executing deductions and their order will be governed by provisions on the execution of decisions and on wage deductions.
 
6. Conclusions
Remuneration for work is one of the most important elements of employment relationship, especially from the view of employees. Remuneration has also the most direct and most tangible impact on the day-to-day lives of workers. The total amount of remuneration for work should be enough to maintenance employed worker and also his family. However, the practice shows that employed persons rarely receive the full amount of the remuneration to which they are nominally entitled in contract. Their remunerations are often subject to various deductions (starting from taxes, through social security contributions, ending on private obligations), which represent the difference between the gross amount of their earnings and the net amount they actually receive. All these deductions have to be strictly regulated in order to protect employees from arbitrary and unfair deductions, which, in effect, may lead to unjust decrease of their remuneration. To prevent all these negative effects, the legislators, in researched countries, had regulated matters connected with deductions from remuneration for work on the level of national Acts, particularly, in their labour codes.
    Another conclusion flowing out from my researches is such that the regulation of permitted deductions from remunerations is similar in all chosen countries. It is so because all these countries had ratified the Convention No. 95 of ILO, which forces national legislators to the introduction of her provisions to internal law. Therefore, all of researched labour codes determine for example: order of deductions, extent of deductions and amounts of remuneration free from deductions. It is a right solution because employees always are weaker party of employment relationship and they have to be protected by law.
 
References:
1. Piankowski M. Ochrona pracowniczych świadczeń majątkowych [Protection of employee benefits], Bydgoszcz-Gdańsk 2002, p. 30 ff.
2. The Convention No. 95 of the International Labour Organization of 1949 on the protection of wages, adopted on 1 July 1949, on 32nd ILO session at Geneva, entered into force on 24 September 1952. Poland on 25 September 1952 ratified the Convention. See also: Journal of Law of Republic of Poland 1955, No. 38, item 234.
3. The Recommendation No. 85 of the International Labour Organization of 1949 on the protection of wages, adopted on 1 July 1949, on 32nd ILO session at Geneva.
4. The European Social Charter, treaty open for signature by the member States of the Council of Europe on 18 November 1961 at Turin, entered into force on 26 February 1965. Poland ratified the European Social Charter on 25June 1997 accepting 58 of the Charter’s 72 paragraphs. See also: Journal of Law of Republic of Poland 1999, No. 8, item 67.
5. Report of the Committee of Experts on the Application of Conventions and Recommendations of International Labour Organization concerns the Protection of Wages Convention (No. 95) and the Protection of Wages Recommendation (No. 85), Report III (Part 1B), 2003, p. 14 ff.
6. International Labour Conference, 31st Session, 1948, Record of Proceedings, p. 459; International Labour Conference, 31st Session, 1948, Report VI(c)(1), p. 6 and Report of the Committee of Experts on the Application of Conventions and Recommendations of International Labour Organization concerns the Protection of Wages Convention (No. 95) and the Protection of Wages Recommendation (No. 85), Report III (Part 1B), 2003, p. 26.
7. According to Article 2 Paragraph 1 of the Convention, the Convention applies to all persons to whom wages are paid or payable.
8. Act of 26 June 1974 - the Labour Code, consolidated text: Journal of Law of Republic of Poland 1998 No. 21, item. 94, with subsequent amendments.
9. Święcicki M. Prawo wynagrodzenia za pracę [The right to remuneration for work], Warsaw 1963, p. 223 ff.
10. Skoczyński J. Prawna ochrona wynagrodzenia za pracę [Legal protection of remuneration for work], Warsaw 2000, p. 66-71, 80-91.
11. Art. 505 point 4 of Act of 23 April 1964 The Civil Code, Journal of Law of Republic of Poland 1964, No. 16, item 93 with subsequent amendments
12. Journal of Law of Republic of Poland 1955, No. 38, item 234.
13. Seweryński M. Wynagrodzenie za pracę. Pojęcie, regulacja i ustalenie [Remuneration for work. The concept, regulation and determination], Łódź 1976, p. 8.
14. Judgment of Supreme Court of 17 February 2004, case no. I PK 217/3, Orzecznictwo Sądu Najwyższego – Izba Pracy, Ubezpieczeń Społecznych i Spraw Publicznych [Judgments of the Supreme Court - Chamber of Labour, Social Security and Public Affairs] 2004, No. 24, item 419.
15. Judgment of Supreme Court of 11 June 1980, case no. I PR 43/80, Orzecznictwo Sądu Najwyższego – Izba Cywilna/Pracy [Judgments of the Supreme Court – Chamber of Civil and Labour Law] 1980, No. 12, item 248.
16. Under provisions of the Labour Code, the term of standby means a period of time during which an employee is in the state of readiness to perform work. See also: See: Judgment of Supreme Court of 11 August 1981, case no. I PRN 41/81, Orzecznictwo Sądów Polskich i Komisji Arbitrażowych [Judgments of the Polish Courts and Arbitration Commission] 1982, No. 7-8, item 105.
17. Also is considered as wage, a remuneration provided by an employer to an employee for work on the occasion of his/her work anniversary or personal anniversary, if such remuneration is not provided from net profit or from the social fund (§ 118 subparagraph 3). At the same time the following items are not be deemed to be wages, in particularly: wage compensation, severance allowances, discharge benefit, travel reimbursement including non-mandatory travel reimbursement, contributions from a social fund, contributions to supplementary pension saving funds, contributions to an employee's life insurance, revenues from capital holdings (shares) or bonds, a tax bonus, income compensation for an employee's temporary incapacity for work, supplementary sickness insurance, compensation for work standby, monetary compensation under § 83a(4) and other payments provided to an employee in relation to employment pursuant to this act, other relevant regulations, a collective agreement or an employment contract which do not have the characteristics of wages (§ 118 subparagraph 3 sentence 2). {jcomments on}
 
 

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