Wis es and their role in european policies

WISEs and their role in
European policies
National Report - Poland

With the financial support of the European Commission

The Report has been written by Tomasz Sadowski (Barka Foundation for Mutual Help) and Lidia Węsierska
(Barka Foundation for Mutual Help). It has been translated by Ewa Sadowska (Barka UK).

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CONTENTS

A. DESCRIPTION OF TYPES OF WISE 7

A.1 Type of WISE: Limited Liability Company of a non-profit type 8
A.1.1 Brief historical description 8
A.1.2 Statistical overview 8
A.1.3 Supporting umbrella structures 8

A.2 Key organizational features 8
A.2.1 Goals pursued by the WISEs 8
A.2.2 Legal form 8
A.2.3 Types of workers targeted 9
A.2.5 Type of goods or services produced by the WISEs 9

A.1. Type of WISE: Non – governmental organizations 9

A.2 Key organisational features 11
A.2.2 Legal form 11
A.2.4 Mode of integration provided by the WISEs to the worker 11
A.2.6 Types of resources 12

A.1. Type of WISE: Centres for Social Integration and Clubs for Social Integration 12
A.1.2 Statistical overniew 13

A.2 Key organisational features 13
A.2.2 Legal form 14

A.1 Type of WISE: Social cooperatives 16

A.2.2 Legal form 18
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A.1 Type of WISE: Centres for Occupational Activation 19

A.2.2 Legal form 21
A.2.6 Type of resources 23

A. 3 Supported Employment Enterprises - legal requirements 24

B. ANALYSIS OF POLICIES 26

B.1 Policy overview 26
B.1.1 Specific public scheme 26
B.1.2 Other public support not specially targeted at WISEs 34
B.1.3 Public procurement and WISE 38
B.1.4 Private Sector support (non-profit or profit) 39
B.1.5 Ongoing political debates and trends 39
B.1.6 Coordination of the sector 56

B.2 Programme analysis 60

C. BEST POLITICAL PRACTISES 90

C.1 Act on Social Employment 90

C.2 The act regarding social cooperatives 93

D. CONCLUSIONS 95

D.1 Political debates and trends 96

D.2 Challenges 98

D.3 Recommendations for integrated policies 99

BIBLIOGRAPHY 103

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Report on Work Integration Social Enterprises (WISE) in POLAND

A. Description of types of WISE

Summary of chapter A
In the chapter A, six types of WISE were elaborated upon: limited liability company of non-profit character,
non-governmental organisation, social integration centre, social cooperative and centre for vocational
activation. Limited Liability Company of non-profit type does not differ in legal terms from regular limited
liability company which is based on a commercial law. It is the objectives included in the Articles of
Association as well as the way the funds are used, which make them different. Limited liability company of
non-profit type aims at pursuing social goals and it is social goals that financial surplus is used for.
Due to the level of founder’s capital (50.000 PLN) this type of WISE is not popular in Poland and there are
single cases of it. This is the reason why there is a lack of detailed statistical data on this field.
With regards to the second form of WISE which are Non-governmental Organisations, the statistical data
on organisations conducting statutory chargeable and economic activity was presented (this is less than
10% of the total number of organisations). The organisations’ target beneficiaries are unprivileged groups
of people who are in very difficult life situations. Organisations rely in the first instance on public funds to
implement their activities. Income from other sources is only 30%.
Social Integration Centres, the third form of WISE, can run commercial and productive activity which is not
an economic activity but it is treated as a form of vocational activation of the unprivileged groups.
Social Cooperatives, the fourth form of WISE, run economic and re-integration activities for the benefit of its
members. Cooperatives do not share the profit as it is allocated in the following funds: resource fund,
investment fund and re-integration fund.
Fifth form of WISE is Centre for Vocational Activation of the disabled, which run service-oriented,
production and economic activity. The profit is allocated in Entrepreneurial Fund of Activation which covers
the cost of rehabilitation of the disabled persons, purchase of equipment as well as the cost of
accommodation support.
Another form of WISE are Supported Employment Enterprises. The status of Supported Employment
Enterprise was received by cooperatives of the disabled people which employed no less than 40% of the
disabled (including 10% of people with serious mental impairment).
Commercial companies can also receive a certificate of supported employment enterprise as long as 40%
of they employees are the disabled and under a condition that they operate from appropriate locations and

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use special equipment. The profit of the supported employment enterprises are not subject to a share.
Companies which run such enterprises benefit from the State Fund for Rehabilitation of the Disabled
(PEFRON), the tax reductions, reimbursement of social insurance premium of the disabled. Supported
employment enterprises created by commercial companies are very criticized in Poland.

A.1 Type of WISE: Limited Liability Company of a non-profit type

A.1.1 Brief historical description
Principles of operating Limited Liability Companies were set up in Germany in 1892 (German term
“Geselshaft mit beschränkter Haftung”, short: GmbH). The German pattern was adopted in Austro-Hungary
in 1906 and in England in 1907 (as a private limited company). In 1925 it was incorporated in legal systems
in France, for example. In Poland, the rules for limited liability companies (spółka z.o.o.) were for the first
time regulated under the decree dated on the 8th of February 1919. Legal regulations of Limited Liability
Companies, which are in effect contemporarily, are relatively convergent in different countries. However,
they can significantly differ in very basic details.
A.1.2 Statistical overview
It is not possible to define number of Limited Liability Companies of a non-profit type. They are registered
as Limited Liability Companies. Due to the fact that the nominal capital of the company ought to be
minimum 50.000 PLN, this is not a commonly practised form of activity with a social goal. We can estimate
that these are single cases in Poland.
A.1.3 Supporting umbrella structures
It is predicted that development of Limited Liability Companies of a non-profit type is not going to be
dynamic due to the level of nominal capital. Non-profit organisations do not posses sufficient capital to set
such companies up. Yet it is assumed that it is non-profits which are most interested in such kind of
enterprises.
Small number of Limited Liability Companies determines the fact that neither now nor in the nearest future
the sector is capable of developing a consortium.
A.2 Key organizational features
A.2.1 Goals pursued by the WISEs
The main mission of Limited Liability Companies is to lead socially beneficial activities in the area of public
tasks.
A.2.2 Legal form

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Limited Liability Company is based on a commercial law and its operations are regulated by commercial
law. It is a liaison of a few subjects (stakeholders) who are held accountable to companies’ creditors only
up to the level of their personal shares in the company (with the exception of tax debt). Personal shares are
recorded in the company’s agreement.
The law does not limit the number of stakeholders which means that a stakeholder can be both a single
individual and a thousand individuals. Stakeholder can be a person and a legal entity or an organisation
which does not have a legal status (e.g. registered partnership) under the condition that the founder of one-
person Limited Liability Company is not another one-person Limited Liability Company.
Limited Liability Companies of a Non-Profit type are not regulated by any separate codex and they only
differ from other Limited Liability Companies in the following aspects:

- The agreement of Limited Liability Company of a Non-Profit type includes social objectives.
- Profits are reinvested in social causes defined in the agreement of Limited Liability Company of a Non-
Profit type (with a prohibition to pay out the worked profit of the Company to stakeholders or owners).
A.2.3 Types of workers targeted
This is not defined by regulations. Limited Liability Company of a Non-Profit type can employ any worker no
matter what their life situation is. However, the Company agreement can include a clause explaining that
the disadvantaged group is the preferable one.
A.2.5 Type of goods or services produced by the WISEs
Types of services and products produced by this type of WISE are accepted by regulations defining the
activity of Limited Liability Companies.
A.1. Type of WISE: Non – governmental organizations
In Poland, non-governmental organizations, foundations and associations came into existence
approximately in the same time as in Western European countries. At first they were occupied mainly with
charitable activities, later they also started to conduct commercial, cultural, educational and academic
activities as well as activities connected with promoting the idea of a social development and a social
solidarity. Some of them were of a religious character while others were entirely secular. In time of II
Republic of Poland (1918-1939) the non-governmental organizations were growing very fast. During the II
World War and in the time of the domination of communism (which came after the war), the level of social
activity and civic engagement had fallen. Some of the non-governmental organizations were closed down
(their property was taken over by the state). Others were incorporated in ideological structures.
After 1989, non-governmental organizations experienced their resurgence and revival thanks to the

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regained right to associate and establish associations. Some of the non-governmental organisations started
extensive chargeable and economic activities. These organisations and their profile are described below.
According to the data in the Registrar of Companies dated May 2007, there are over 78.000 non-
governmental organizations in Poland, herein around 70.000 associations and around 8.500 foundations.
Out of those, approximately 4.000 organisations meet the criteria described in the EMES (European
Research Network) definition, which makes up for almost 10% of all organisations. Statistical data
presented below refer exclusively to non-governmental organisations defined as an acronym SEE (Social
Economy Enterprise).
The number of SEE employing paid staff: approx. 2400 which are 60%.
The number of SEE employing workers through employment contract: approx.: 2000 which is 50%.
There is a lack of data with regards to the number of those employed in organisations which met the EMES
criteria.
In the whole sector there are 120.000 employees (64 full time jobs).
One can assume that at least 10% from them are employees of SEE, which are over 12.000 people. The
number of SEE using voluntary support: approx.: 2000 which 50%.
45% used “permanent” voluntary engagement (volunteers engaging on regular basis).
Revenue:
In 2005 85% of SEE had a budget exceeding 10.000 PLN.
45% of SEE declares that they have some financial reserves which could be used in a situation when the
up-till-now income is cut off.
For 50% of SEE, the average yearly dynamics of budget accrual in the last few years was approx. 115%.
10% of SEE gains more than 20% of their income thanks to formally registered economic activity or
chargeable activity.
During 2001-2003, 25% of all non-profit organisations were created. At that same time 34, 9% of SEE-s
were registered. This indicates that the organisations being newly established rely increasingly on acquiring
at least a part of resources on their activities on the basis of their own economic ventures. This is partly a
consequence of the enforcement of the Act on Public Benefit Activity and Volunteerism. Thanks to this Act
non-profit organisations were enabled to lead their chargeable projects not for profit which were different
from traditional economic activity. In Poland there are no networks which would consist of SEE-s only.

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There are many networks however, associating non-profits including SEE-s. The SEE-s sector did not unite
enough nor became autonomous therefore there is no need to create larger SEE-s structures.

A.2 Key organisational features
The mission of SEE-s is to lead public benefit activities in the area of public tasks.
A.2.2 Legal form
Legal form of non-profit organisations is defined by Act on Public Benefit Organisations and Volunteerism
dated on 24th of April 2003.
Non – profit organisations are entities which do not belong to public finances sector - according to
regulations on public finances. Non-profit organisations do not act in order to maximise profits. They are
legal entities or those which do not have legal status and are established based on legal acts’ regulations
including associations and foundations.
The exemplary groups : long-term unemployed, those taking advantage from social welfare, the
handicapped, the mentally ill, the addicted, the homeless, prisoners, youth leaving orphanages/group
homes, youth entering labour market, individuals aged above 50 years old, individuals who desire to
combine children’s care with professional career, immigrants and refugees.
A.2.4 Mode of integration provided by the WISEs to the worker
Social and professional reintegration: engagement of beneficiaries in being professionally active; creation
of work places for people at risk of falling into difficulties on the labour market; providing members/workers
with services adopted to their needs and economic potential; economic co-operation between members,
common production/activity in the area of business/trade ensuring the provision of financial help to
members in case of crises, treating each worker as a subject and ensuring their profound participation in
the process of management and organisation of work conditions.
Economic activity of SEE-s is first of all about providing training services (up to 45% of SEE-s) and
educational services.
Services on social care, organisation of leisure activities, domestic services (e.g. cleaning), building and
construction, gardening, environment are a bit less popular.
Area of activities appointed by SEE-s as most important:
- Sport, tourism, recreation, hobby (31, 9% of SEE-s)
- Culture and art (18, 3% of SEE-s)
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- Education and children’s upbringing (15, 5% of SEE-s)
- Social services, social care (5, 2% of SEE-s)
- Health care (5, 8% of SEE-s)
- Local development in the social and material dimension (2, 3% of SEE-s)
- Labour market, employment, professional activation (3, 5% of SEE-s)
- Environment protection (3, 2% of SEE-s)
- Professional issues, workers’ rights etc. (6, 4% of SEE-s)
- Scientific research (3, 5% of SEE-s)
- Support of institutions, non-profit organisations and civic initiatives (1, 1 % of SEE-s)
- Other activity (3, 3 % of SEE-s)
A.2.6 Types of resources
The main source of SEE-s income is resources granted by public authorities (up to 40,6 %), secondly
contracts with public bodies (26,8%) and resources received by donors (5,4%), income from sales of
commodities and services (4,5%), financial donations as well as donations in kind from private individuals
(2,2%) and others (20,5%) are members’ fees, legacies, capital investments, exemplary damages/smart
money/vindictive damages/punitive damages and added damages (regulations of the penal code allows the
ability to predicate by tribunals added damages as well as command a financial contribution for non-profit
organisations.
A.1. Type of WISE: Centres for Social Integration and Clubs for Social Integration
Centres for Social Integration and Clubs for Social Integration function on the basis of the Act on Social
Employment from June 13, 2003. The Act looked up to the experience of Barka Foundation during 1989 –
2002. The justification to the Act’s existence was a description of activities run by Barka School whose aim
has been to integrate socially excluded individuals and groups. The initiator of the Act was the
contemporary Deputy Prime Minister and Minister of Labour and Social Policy professor Jerzy Hausner. In
the Act a conception of social exclusion occurred for the first time. The Act contributed to discontinuation of
previous practice of social assistance being based on passive and relief programs only. The legislation
came into existence during the time when the level of unemployment in Poland was over 20% and in some
regions reached 30%. The opponents of the Act were groups connected with a traditional model of social
help such as the Polish Agency to Solve Alcoholic Problems. The Agency did not wish that the Centres for
Social Integration were financed from the resources allocated for alcoholism-prevention projects.
In July 2007, amendment to the Act on Social employment was made. New regulation brought in some
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important changes which facilitated the implementation of programs of social and vocational reintegration
run by Centres and Clubs of Social Integration. The pack of social impact elements such as an incentive
bonus was enlarged. Also, some changes in class discipline were made (e.g. limit of days on medical
leave). The amendment extended the list of individuals, who qualified participate in activities of Centres of
Social Integration adding disabled people as well. Also there were new regulations made which allowed
the Clubs of Social Integration to organise local programs of public benefit activity.
A.1.2 Statistical overniew
There were 55 Centres of Social Integration in Poland by the end of 2007, among which 60% were created
by non-governmental organizations, and 40% were run by local governments. In 2007 the number of the
participants of Centres of Social Integration amounted in approximately 2500 people. Moreover, in 2006-
2007 there were over 300 Clubs of Social Integration created in Poland.
The income of Centres of Social Integration formed as follows:
25 % of CSI had budget not more than 10.000 PLN
44 % of CSI had budget between 100.000 – 500.000 PLN
19 % of CSI had budget between 500.000- 1.000.000 PLN
12 % of CSI had budget over 1.000.000 PLN
There were many different actions undertaken in favour of building common understanding of social and
vocational integration of the excluded groups of people.
In 2002 Barka Foundation established an Alliance of Organisations for Social Employment, whose aim was
to lobby in favour of the Act on Social Employment and promote creation of Centres of Social Integration.
23 organizations joined the Alliance, which put the Act on Social Employment to vote in Parliament on June
13, 2008.
Another initiative came from organizations and institutions which run the CSI. In 2006 the Alliance of
Centres for Social Integration was established in the City of Torun. Among them there were 21 Centres
whose role was to represent all CSI and lobby in favour of building system-based solutions of financial
support for Centres of Social Integration. However the Alliance is not active and it is the first Centres of
Social Integration created in Poland in 2004 which are most active in integrating associations and
institutions which run the CSI.
A.2 Key organisational features
The mission: social and vocational reintegration of socially excluded groups and those endangered with
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social exclusion. The support of socially excluded people is led by realising individual programs of social
employment and running classes organized by CSI. Up-till-now experiences proof a high effectiveness of
active forms of support which allow reaching an indicator of a new employment of 60%-70% achieved by
those at a special risk of social exclusion.
Individuals aged 45 – 50 are a dominant group of participants of CSI. There are several to several dozen
workers employed in CSI. There are around 3-5 participants per one worker. Each year 2500 participants
on average attend activities of CSI. It is said that between the years of 2008 and 2010 the number of CSI
will increase to 100, and that CSI will be attended by 7500-1000 participants from groups socially excluded
involved in this form of activation.
A.2.2 Legal form
CSI is a financially and essentially separate institution, created by a non-governmental organization or by a
representative of a local government (village-mayor or leader of the council). The status of the Centre for
Social Integration is given by a regional governor for a five-year-period and it is the governor who
supervises and controls it. 60% of CSI are currently run by non-governmental organisations and religious
groups. The remaining ones are managed by local authorities.
The following groups qualify to participate in the program of Centres for Social Integration and Clubs for
Social Integration:
- Long-term unemployed (12 months of unemployment which occurred in two-year period);
- The homeless who follow an individual CSI program for overcoming homelessness;
- Alcohol and drug addicts who completed rehabilitation;
- Ex-prisoners;
- Refugees;
- Disabled people;
- Mentally ill individuals.
Centres for Social Integration realise processes of social and vocational integration for the period of 12
months. (In exceptional cases this period can be prolonged to 18 months). In social reintegration the
emphasis is placed on the ability to play social roles, manage earned resources and learn team-working. In
vocational reintegration on the other hand, the focus is training, up-grading skills and building up new
qualifications as well as requalification. Participant’s stay in CSI is legally treated as a time of employment
and it counts for the retirement. It is in the form of so called, social employment.
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A person attending the CSI program has a status of a participant. The choice of the activities and
workshops is made on the basis of Individual Program of Social Employment. Besides the participation in
activities and courses, a participant can receive an integration benefit which equals 100% of an
unemployment benefit (120 EURO per month), and they can additionally receive a bonus of 20% of
integration benefit for some extraordinary engagement. While taking part in CSI, a participant gathers work
experience in companies and enterprises (hands-on-training). A participant, who has successfully gone
through a probation period, can end up with being employed. Employer, who provides a job opportunity to a
dysfunctional group representative, is entitled to receive a refund of insurance contribution for a 12 months’
period.
The participants of the programs are represented in a management of CSI.
Centres for Social Integration can be compared to Italian cooperatives type A. It provides training services
as far as a general and vocational education for excluded groups of people is concerned. It also sells
products made by participants in vocational workshops and runs different types of services for support to
the local community.
The staffs of CSI consists of instructors, psychologists, pedagogues, social workers, who are very good
qualified professionals.
The monthly cost of training and education of a single participant equals approximately 1000-3000 PLN; it
also depends on the quality of the offer and the size of CSI, etc. The number of participants is between 25
and 200 people in largest Centres of Social Integration.
Centres of Social Integration gain their funding from the following sources:
- Marshall Office (funding can be received for the first 3 months of the activity and the adaptation of the
workrooms);
- Grants from resources of the Commune (the ratio of the amount agreed by Local Council to be spent
per each participant and the total number of participants & employees);
- European Social Fund;
- Trade and service-oriented activity run by CSI are not legally considered to be a commercial activity
(with the exception of alcohol, tobacco and fuel production as well as coloured metals)
- Commercial activity, which should be separated from the activities run in favour of social and vocational
reintegration
- Labor Fund which covers reintegration benefits for the participants of CSI.
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A.1 Type of WISE: Social cooperatives
In Poland the cooperatives’ movement came into existence when Poland did not exist as a country and
territory. The initiation of the cooperatives’ movement was perceived as a sign of regaining identity and
defending sovereignty as well as a counteraction to the social injustice. The first cooperative was
established in 1816 by a priest Stanislaw Staszic. The cooperative was called "Rescue from Misery
Cooperative".
In Poland, the cooperatives’ movement is being perceived negatively. This is a heritage from the
communism period. The cooperatives’ movement was then incorporated in a system of centrally governed
economy and it became the tool of the State. It was an opposition to rebuilding civic society and arising
democracy after 1990.
A new type of cooperatives, so called social cooperatives came into existence on the 20 of April, 2004,
together with the Act on Employment Promotion and Labour Market Institutions. The inspiration was Italian
social cooperatives and the activities run by some non-governmental organisations. In 1995 Barka
Foundation representative brought a copy of the Italian Act on Social Cooperatives dated 1991 to Poland.
The Act pointed out possible directions of development. In April 2006 Poland adopted own Act on Social
Cooperatives which was patterned after the Italian Act.
The research indicates that by the end of 2007 there were 156 social cooperatives operating in Poland.
They had about 1000 members and the number of employed staffs was 699. The remaining persons
worked as volunteers awaiting an employment opportunity. The majority (60%) were men.
According to the Act on social cooperatives, 80% are people from groups socially excluded: unemployed
people (12 months of unemployment which took place during a two-year period), people who completed the
social and vocational reintegration in CSI and disable people. So in most cases the employed people come
out of dysfunctional groups.
The turnover in social cooperatives in 2007:
- 44 % of social cooperatives did not gain any income, which means that they did not undertake any
activity;
- 42 % of the cooperatives report the turnover between 10.000 PLN to 100.000 PLN
- 14 % of the cooperatives report the turnover more than 100.000 PLN.
The majority of social cooperatives do not have savings (only 3, 5% of the cooperatives reported that they
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had some savings). The earnings in social cooperatives are maintained on the level of the minimal wages
which is around 970 PLN gross per month; the highest salary is 1500 PLN gross per month, and the lowest
– 450 PLN gross per month.
Social cooperatives in Poland are not incorporated in the sector of cooperatives’ movement. This is a
reason why social cooperatives did not automatically enter into already existing structure of cooperatives’
movement in Poland and are subordinate to support structures of non-governmental organizations. 77 % of
social cooperatives do not belong to any networks. 22 % of cooperatives belong to alliances of non-
governmental organizations.
Until now there was one attempt to establish an alliance of social cooperatives. In 2006 the Social
Cooperatives’ Scrutiny Alliance came into being. The Alliance’s aim is to support social cooperatives and
control their functioning in financial aspects every three years and make sure that the cooperatives follow
the rules of the Act on Social Cooperatives. Only 22% of social cooperatives joined to the Alliance. Despite
the fact, that another 60% of social cooperatives would be willing to join the Alliance, the tendency to
integrate was meagre in the sector. This is a consequence of the fact that the cooperative movement is still
very weak: in some regions of Poland social cooperatives were not established at all, in others they are
struggling with many difficulties (i.e. management issues, concentration on the running activities). In the
projects of EQUAL Community Initiative, many different forms of support for social cooperatives were
tested. A model which brought positive results was local partnerships’ creation. A partnership consisted of
local community representatives and representatives of social cooperatives. Those examples of partnership
brought positive results such as social cooperatives’ creating local services and market of products to
support the local community.
During 2005-2006 Regional Funds to Support Social Cooperatives were established which provided
training, advice and financial support to set up social cooperatives.
During 2006 – 2008 Centres of Support to Social Cooperatives were established by those non-
governmental organizations which provided training and advice and had a grant-fund to support to social
cooperatives. Previous support structures were built more by non-governmental organizations and local
partnerships than by social cooperatives themselves.
Further development of social cooperatives in Poland may facilitate creation of a platform of cooperation of
social cooperatives which would resemble Italian consortiums.
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Mission: Social cooperatives run economical and social activities through individual work of members. As a
result representatives of underprivileged groups rebuild their qualifications and abilities as well as
relationships with society. An unemployed person becomes a worker as a result of self-employment.
A.2.2 Legal form
Social cooperatives are registered in the Registrar of Companies as social enterprises, but in accordance
with the amendment of the Act on Public Benefit Activity and Volunteerism they are going to be transformed
into non-governmental organizations. Social cooperatives can run social activities in the area of public
tasks, which bring benefit to the public. They can also apply for grants for social reintegration projects
likewise non-governmental organizations. One must bear in mind that clause of the Act which allows social
cooperatives to run activities similar to the activities of non-governmental organizations are an additional
element. These activities cannot replace the aspect of running economic activity.
The social cooperatives can be established by:
- The long-term unemployed (12 months of unemployment which occurred in the period of two years),
- The homeless realizing individual program of overcoming homelessness,
- Individuals who completed the reintegration program in CSI (the homeless, the addicted to alcohol and
drugs, ex-prisoners and refugees),
- The disabled people.
There can be as well highly qualified individuals employed, but their number cannot exceed 20% of a
general number of social cooperative employees.
Social cooperatives were to be an intermediate form of employment for beneficiaries on the pathway from
the social exclusion to the open labour market.
In the process of reintegration of socially excluded groups the emphasis is placed on various kinds of co-
ownership, among others the co-ownership of a social cooperative which all cooperative members should
aim to achieve as stated in the Act on Social Cooperatives. This aspect often makes the cooperatives to be
perceived as a place of a target employment. At the current stage of social cooperatives’ development, it
has not been reported that members move to others forms of employment at the open labour market
(besides few exceptions). Cooperative members perceive the cooperative as their property. Despite of
many difficulties which the members face and often low salaries, they prefer to invest in and develop
economic activity in their social cooperatives rather then enter an open job market. The majority of the
members are employed through an employment contract. The Act on Social Cooperatives says that
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members personally conduct the works in their cooperatives and are represented in the cooperatives’
authorities.
Besides the vocational reintegration social cooperatives plays also role of social reintegration for the
members and their families.
Social cooperatives deliver all kinds of services, among which the most popular are: catering, recycling,
gardening, taking care of the Elderly and disabled people, construction, cleaning, training, printing, etc.
The financial support to establish a social cooperative includes an opportunity to receive a grant from the
Employment Fund. The grant is up to 300 % of the average of the national wage per each unemployed
person who is a founder-member of a social cooperative. Additionally the members of social cooperatives
can be exempt from the fee for registration in the Registrar of Companies as well as for reporting their
registration to the Judicial and Economic Monitor.
The legislator allows supported employment for all social cooperative members. In practise, this provides a
refund for social insurance contribution for the first 12 months employment period.
Social cooperatives received also the support from EQUAL Community Initiative, where each social
cooperative could gain on average 100.000 PLN. Other grant opportunity for social cooperatives was
provided by the Centre of Support to Social Cooperatives where grants amounted around 15.00 0 PLN per
social cooperative.

A.1 Type of WISE: Centres for Occupational Activation
Along with Supported Employment Enterprise and open labour market entities, Centres for Vocational
Activation are a very significant element in the system of vocational rehabilitation for disabled people. They
create a link between the process of social & vocational rehabilitation and employment. In the first Act on
rehabilitation for disabled people from 1991, there were only Supported Employment Enterprises (Zaklady
Pracy Chronionej) mentioned. In the Act on vocational and social rehabilitation and employment of disabled
people from August 27th 1997, Centers for Vocational Activation (Zakłady Aktywizacji Zawodowej) were
introduced. The first agreement with the organizer of Centers for Vocational Activation (the organizer were
non-governmental organizations) was signed by the State Fund of Rehabilitation for the Disabled. First
agreements were signed by the State Fund with 9 Centres for Vocational Activation from which one did not
start to work. Other 8 Centres for Vocational Activation are one of the largest and the best prosperous
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Centres in Poland. The first organization which opened the Centre for Vocational Activation was the “Polish
Association to Support the Mentally Ill” in August 2000. Another Centre for Vocational Activation was
created by „Support to the Blind Foundation” in Stanislawow. The first organization which opened the
Centre for Vocational Activation was the “Polish society to support the mentally ill” in August 2000. Another
Centre for Vocational Activation was created by „Support to the Blind Foundation” in Stanislawow. Since
2002 the agreements with organizers of the Centres for Vocational Activation have been signed on the
level of voivodship (before they were signed on the central level).
So far there have been 47 Centres for Vocational Activation established and most of them came into
existence in the last 3-4 years. The Centres for Vocational Activation are mainly created by non-
governmental organizations but also by the Communes. The Centres employ on average 30 staffs. The
smallest Centre for Vocational Activation employs 9 staff members and the largest one employs 60 staff
members. According to the data from the All-Polish Forum of the Handicapped, Centres for Vocational
Activation employ 1.529 staff members which makes up for 731 full-time jobs. Activities of Centres for
Vocational Activation are supported by the work of around 62 volunteers in all Centres for Vocational
Activation.
The incomes of Centres for Vocational Activation are as follows:
- 11 Centres for Vocational Activation report turnover between 150.000 - 500.000 PLN;
- 15 Centres for Vocational Activation report turnover between 500.000 – 1.000.000 PLN;
- 9 Centres for Vocational Activation report turnover between 1.000.000 -2.000.000 PLN;
- 5 Centres for Vocational Activation report turnover between 3.000.000 PLN.
A few Centres for Vocational Activation did not provide information on what their turnover was.
Centres for Vocational Activation can be established by non-governmental organizations whose mission is
to help the disabled. They can also be established by authorities of districts/regions and local communities.
Non-governmental organizations working in the field of supporting the disabled people create networks and
forums such as the All-Polish Forum of the Handicapped. Networks and alliances of organizations, which
establish Centres for Vocational Activation, are not being established yet. Although 10 years had passed
since the Act on social and vocational rehabilitation and employment of the disabled people was
introduced, the service of a number of Centres for Vocational Activation is still unsatisfactory and they do
cater for the needs. Creating alliance of Centres for Vocational Activation would be desired to promote this
form of WISE in different regions of the country, and as a platform for exchanging experiences and support.
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The mission of Centres for Vocational Activation is vocational rehabilitation including job advisory, training
and “supported employment” that aims at helping to find a job on the labour market and maintain it. The
long-term objective is to support a disabled person to reach and maintain a suitable employment through
taking advantage of vocational counselling and training.
A.2.2 Legal form
According to the legislation, local communities, magistrate regions’ authorities, foundations and/or other
non-profit organizations (whose target is the vocational and social rehabilitation of the disabled) can
establish a financially and organisationally separate entity and receive the status of the Centre of
Vocational Activation.
Receiving such status is possible if the following conditions are fulfilled:
a. Adequate percent of disabled individuals in proportion to non-disabled employees;
b. Another condition is connected with the infrastructure of Centre for Vocational Activation and certain
services which should be provided for the disabled. For example: rooms have to be in line with
regulations and health and safety rules and must take into account the needs of the disabled.
Moreover, Centres for Vocational Activation must provide medical care, counselling and rehabilitation
services.
c. The third condition which guarantees the status of Centres for Vocational Activation is to allocate some
income to Entrepreneurial Fund of Activation (Zakladowy Fundusz Aktywnosci), which is used to
support different forms of activities for the disabled workers of Centres of Vocational Activation.
d. The last condition is to receive a positive opinion from the regional governor, proper to a place, where a
particular Centre for Vocational Activation is located.

Centres for Vocational Activation run social and vocational rehabilitation programs and employ disabled
individuals who come under an appreciable and moderate degree of disability. These are mostly individuals
disabled both physically and mentally, but also the long-term unemployed within so called “public works”
(the cost of employment of those persons is for 12 months cover by Job Centre).
1. Centres for Vocational Activation must employ persons who are rate to appreciable level of disability in
adequate relation to non-disabled employees (this indicator depends on the kind of activity):
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2,5 disabled persons falls on 1 non-disabled (in a situation when the Centre runs productive activities)
3 to 1, if the Centre runs service activity
2,75 to 1, if the Centre runs productive and service activity
On July 30, 2007 first amendments to the Act on vocational and social reintegration were introduced. The
amendments referred as well to changes in the employment law for the disabled individuals. The main
difference regarded the employment indicator. The most significant aspect concerns an opportunity for
employing individuals with the moderate degree of disability and including them in the employment
indicator. The status of Centre of Vocational Activation can be received by those entities whose disabled
employees will make for at least 70% of all employees. (The disabled employees should be referred
through Regional Job Centres). They must be diagnosed with an appreciable level of disability or a
moderate level of disability (in particular those diagnosed with autism, mental handicaps or mental illness).
This group includes individuals who were assessed by Supported Employment Workshops (Warsztaty
Terapii Zajeciowej) as individuals who ought to undertake vocational reintegration process through the
supported employment in Centres for Vocational Activation.
However, the number of persons with a moderate level of disability cannot exceed 35%.
Disabled individuals are employed in Centers of Vocational Activation based on an employment contract
and the majority does not work fulltime (this requires the Act on rehabilitation and employment of disabled
people and they receive an integration benefit connected to their disability. Centres for Vocational
Activation are a specific employment institution which is exempt from taxes and fees. The resources gained
from the exemption as well as the income from running economic activity are allocated to Entrepreneurial
Fund of Activation. Resources from the fund are destined for tools and additional instrumentation of
workplaces, which allows the disabled to function more independently in an employment work institution.
This also allows purchasing equipment which helps a disabled person to run an independent social and
private life. The funding is used to refurbish and renew the workshop rooms as well we to equip the
individual and collective housing. It is also spend on the participation of the disabled individuals in leisure,
cultural activities, etc.
The work of Centres for Vocational Activation aims at educating and rehabilitating the disabled. It is
expected in the Act fully prepares the disabled for employment in the labour market. However, this function
of Centres for Vocational Activation was not fully successful. People with a moderate degree of disability do
not willingly undertake employment in the open labour market. Therefore Centres of Vocational Activation
often become a long-term employment form for the disabled individuals.
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Centres for Vocational Activation can run production and service-oriented activity, apart from products
which are excisable, for example different kinds of alcohols, tobacco, fuels, and products made of precious
metals. The research conducted by the Klon/Jawor Association indicates that most popular activities
undertaken are: trade, production and service-oriented activities, training, tourism and transport, room
leasing, catering, printing and typography, etc. Klon/Jawor Association classifies Centres for Vocational
Activation according to the area of activity. The Centres describe themselves as being most active in the
field of labour market for the disabled, employment, vocational activation and also in the area of health
care, social services and social assistance.
A.2.6 Type of resources
The State Fund for Rehabilitation of the Handicapped (PFRON) provides the Centres of Vocational
Activation with a grant for starting-up and running Centres of Vocational Activation. PFRON finances a
significant part of the service-rehabilitation activity (the funding is distributed by the Marshal Office). In turn
each Centre for Vocational Activation has to hammer out resources to run day-to-day activities. On average
Centres for Vocational Activation spend approximately 1.500.000 PLN to start up. The organizer of the
Centres for Vocational Activation can also count on reimbursement of salaries for the disable workers,
however not more than 100% of the lowest wage in Poland. Due to the fact that working hours of
individuals with a moderate degree of disability must be shorter than usual working hours (no longer than 5
h and 26 min, and no less than 3 h and 51 min), their salaries are lower accordingly. Their wage does not
exceed the mentioned amount so that they can receive an integration benefit. Moreover, one must bear in
mind that State Fund for Rehabilitation of the Handicapped (PFRON) is not obliged to cover all costs
defined in the regulation, but only a proportional contribution connected to the rate of the disabled in the
Centre.
Other sources of funding besides PFRON:
- Income from the economic activity
- Public resources (from various ministries of central government, regional and local governments, etc.)
- Refund for employment and rehabilitation of disabled people (State Fund for Rehabilitation of the
Handicapped and Regional Job Offices);
- European Social Fund;
The cost of a single person working in the Centres for Social Activation is between 3.500 PLN and 5.000
PLN per month.

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A. 3 Supported Employment Enterprises - legal requirements

Cooperatives of the disabled have a long-standing tradition. Some of them were created during
the interwar period. The structure and hierarchy of the requirements to set before those entities was close
to current requirements of set before social cooperatives. The priority was to create employment for the
disabled freely associated in the cooperative and economic activity was only a tool to serve this goal.
Management of the entity was in the hands of its members and the support of the State was only a
supplement source of financing of a cooperative run by the disabled. In late 80ties cooperatives enjoyed
privileges in the field of supplies, tax reductions and a monopoly for producing a number of items such as
brasserie and protective clothing.
During transformation years a dominant part of the support mechanism was not practiced as it was not
compliant with market economy principles. Cooperatives were ill-prepared to function in a new
environment. They had to pay out rehabilitation and social benefits and were deprived of privileges given by
the State, and therefore they encountered difficulties.
It is only the Act on Vocational and Social Reintegration & Employment of Handicapped Individuals dated
27 August 1997 provided new opportunities for cooperatives of the disabled through the creation of a new
entity – so called Supported Employment Enterprises. The cooperatives of the disabled can also transform
into social cooperatives according to the Act on Social Cooperatives.
Supported Employment Enterprises are run on the basis of the regulations of the article 28 in the Act no 1
on Vocational and Social Reintegration & Employment of Handicapped Individuals dated 27 August 1997.
In order to receive the status of an employer who runs supported employment enterprise, the employer
must:
- runs business activity for the period of at least 12 months and employs no less than 25 staff members
that count for a full time working hours
- achieve employment indicators of disabled individuals for the period of at least 6 months.
Act on Vocational and Social Reintegration & Employment of Handicapped Individuals obliges all
employers to employ at least 6% of disabled individuals. The charges paid for not having fulfilled this
requirement create the State Fund to Support the Disabled (PEFRON).
The existing in Poland cooperatives of invalids which employ at least 40% of the disabled (including 10% of
seriously injured), were given the status of Supported Employment Enterprise. This opened up a path for
commercial and private entities to apply for the status.

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In exchange, an employer gains a right to be exempt from paying the majority of taxes and social insurance
contributions. With time the number of private Supported Employment Enterprises by far exceeded those
which were established within cooperatives of invalids. Unfortunately private supported employment
enterprises, which were to contribute to achieving progress in the area of employing the disabled, abused
and omitted the binding laws and regulations. The tax exemptions and grants which they received for
creating work places for the disabled did not result in increasing employment opportunities but they were a
way of taking advantage of allowed entrepreneurial forms to run a dishonest competition.
Entrepreneurs defended themselves arguing that the new EU regulations exacerbated the availability of
public support for entrepreneurs thus forcing them to take up more of a market-oriented approach.
Reception of the Supported Employment Enterprise status
Employer gains the status of Supported Employment Enterprise if:
1. the indicator for employing the disabled equals:
a. at least 40% including at least 10% of all employed are persons with a significant or
moderate degree of disability,
b. at least 30% of the blind, the mentally ill or persons with mental handicaps with a
significant or moderate degree of disability,
2. locations and buildings used by the enterprise:
a. meet the standards of health and safety regulations
b. cater for the needs of the disabled persons with regards to well-adapted work places and
sanitary rooms as well as an easy access to them.
In addition:
3. An emergency and specialist medical care, counselling and rehabilitation services must be
provided.
It is an employer’s initiative to apply for a status of running supported employment enterprise.
The decision whether such status will or will not be granted is made by a relevant regional governor (who
covers an area where the enterprise premises are located).

The scope of activities being implemented
The scope of activities is unlimited. Accepted are all activities permitted by law.
The limitations which are binding for Centres of Vocational Activation are not obligatory for supported
employment enterprises. For example, Centres of Vocational Activation are not allowed to run activities
connected with production of fuels, tobacco, alcohols and spirits above 1,5% nor products made of
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precious metals. The Centres cannot trade such products either.
Supported Employment Enterprise should be perceived as a Social Enterprise despite of the fact that the
entity which runs Supported Employment Enterprise earns profit which cannot be divided between staff
members. Yet Supported Employment Enterprise meets the criteria described in the definition of Social
Enterprise in the chapter regarding the necessity that the activities focused on social integration of a local
community.
Moreover, the entity which runs supported employment enterprise is obliged to open up a fund for the
disabled reintegration. The resources from the fund are to be allocated for covering the costs of vocational
and social reintegration, insurance and treatment including individual reintegration programs of the
disabled. (Such programs are designed by special committees established by employers). There is a
regulation which in details describes the way of resource spending.

B. Analysis of policies
B.1 Policy overview
B.1.1 Specific public scheme
Summary
In this chapter legal acts which regulate activities of non-governmental organizations and social enterprises
are described. Presented are three types of activities which a non-governmental organization can
implement, these are : non-chargeable statutory activity, chargeable statutory activity and economic
activity. Despite of the realization of social objectives, non-governmental organizations are treated just as
other entrepreneurs.
Presented here are other legal acts which enable creation of institutions for social and economic integration
of unprivileged groups as well as the tax system applied to those groups. Institutions in question are
centers for vocational activation, social integration centers, social cooperatives, foundations and
associations undertaking entrepreneurial activities as well as active forms of support to the unemployed
such as public works and social benefit works.
The currently existing legal system in Poland seems to present a holistic and integrated offer which enables
vocational reintegration and employment of the socially excluded and those at risk of exclusion as well as
handicapped individuals.

The system consists of:
A. Act on Vocational and Social Reintegration & Employment of Handicapped Individuals dated 27 of
26

August 1997,
B. Act on Social Employment dated 13 of June 2003;
C. Act on Social Cooperatives dated 27 April 2006;
D. Act on Foundations;
E. Act on Associations;
F. Act on Public Benefit Activity and Volunteerism dated 24 April 2003,
G. Act on Employment Promotion and Labour Market Institutions dated 20 April 2004.

Ad. A) Act on Vocational and Social Reintegration & Employment of Handicapped Individuals
consists of a pack of elements which are helpful in connecting them with labour market.
The first opportunity is created by Centres for Vocational Activation which provides employment for
individuals with a significant as well as moderate degree of disability. The salaries of the disabled
individuals as well as costs of their rehabilitation and treatment are being refunded.
Another opportunity is support provision to the disabled in order for them to establish own economic and/or
agriculture business. In this case the funding to establish own business by a disabled individual come from
Regional Job Offices which provide a grant up to 42.000 PLN based on a submitted business plan.
Regional Job Office can also provide a grant to establish a social cooperative, whose member is a disabled
individual. Within this scheme a grant can be provided to a disabled person to cover the interest of a bank
loan. In turn an employer of disabled individuals received a refund of all costs connected with adaptation
and equipment of a disabled person’s work room (this refers to employers who have employed a disabled
person for the period of 36 months). Employers can also count on a refund of a disabled employee’s salary
and their social insurance contribution. These provisions are only taken advantage of at a small scale due
to the excessive bureaucracy requirements which discourage potential beneficiaries.
Act on Vocational and Social Reintegration & Employment of Handicapped Individuals describes a venture
called Supported Employment Workshops which prepare disabled individuals vocationally and socially to
undertake employment in Centres for Vocational Activation.
Supported Employment Workshops should not be perceived as Social Enterprises due to their inability to
run trade, production and service-oriented activities. Legislation on Supported Employment Workshops
ought to be changed. Supported Employment Workshops should be given larger legal rights to sell their
products. If this was the case, Workshops could run their business activity, start a production process and
search for the market to sell the products. Such approach would speed up the reintegration of the disabled
who, having realised that the job bring benefits, engage even more responsibly in what they do.
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Ad. B) Act on Social Employment
Centres for Social Integration (CSI) function on the basis of the Act on Social Employment from June 13,
2003 (Dz.U.03.122.1143).
According to the Act, the long-term unemployed, the homeless, ex-prisoners, alcohol and drugs addicts,
disabled persons and refugees can participate in a yearly program of social and vocational reintegration
within so called supported employment. After a year of participation in the activities in the Centre (in
justified cases the participation period is shorter than a year) Regional Job Office can refer a participant to
work:
a) at employers’
b) in CSI (within their economic activity);
c) participants can start joined economic venture in form of social cooperative on basic of rules
defined Act on Social Cooperatives;
d) a participant can start their own business activity.
Employer who decides to employ a CSI participant can sign an agreement with the regional governor
whereby, in lie of bund to employ this person for at least 18 months, the employer receives a right to get a
refund of a part of the person's salary through the 12 months of employment period. So far this form of
employment has not succeeded. The problem is that employers do not want to take such kind of bunds for
people, whose health and problems with addictions can stand in a way to fulfil the bund towards the
employer. In connection to this, an employer protecting the business of their company - applies for funding
not for a certain CSI participant, but for a certain position created for people like this. (Such opportunity
came into existence along with the Act on Supported Employment and Labour Market Institutions). This
kind of solution helps an employer to employ CSI participant, and when they stops to meet the obligations
or simply stop showing up for work, the employer can hire another worker, also a CSI participant.
Resources from the Employment Fund provide a CSI participant with an 80% cover of the costs of legal
aid, consultancy and counselling in the field of economic activity.
When it comes to former CSI participants, who were later employed in social cooperatives on the basis of a
cooperative employment contract, part of the fee connected to insurance, can be funded from the
Employment Fund resources for a 12-months period. This is done according to an agreement between the
regional governor (who covers an area where the cooperative is located) and this particular cooperative.
The Employment Fund gives grants to the unemployed in amount up to 300% of an average wage in
Poland in recent year, for establishing a social cooperative. Refund of social security contribution likewise
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the grant for establishing social cooperative is given de minimis support according to the ordinance of the
Committee (EC) no 1998/2006 dated 15 December 2006 on the implementation of the articles 87 and 88 of
the Treaty for de minimis support (Dz.Urz. UE L 379 z 28.12.2006, str. 5).
CSI can run production, commercial and service-oriented activities, excluding activities based on
production and trade of fuels, tobacco, alcohols and spirits and other products that contain more than 0,5%
of alcohol as well as precious metals products.
But yet, economic activity of CSI according to the legislation is not an economic activity in accordance with
the regulations on business activity.
In connection with this, CSI are exempt from paying income-tax form private persons.
Due to the fact that economic activity rules for CSI must be revised in the Act on Social
Employment and that there is a statutory obligation to separate CSI financially and organizationally from the
subject, which created it– we must accept that the activity run by the CSI can be treated as a Work
Integration Social Enterprise (WISE). During so called vocational and general education workshops CSI
participants learn concrete professions through production and running services which can be sold on a
free market.
The Social Enterprise of CSI is separated from the entity which created CSI. That is why any possible
income from the CSI can be allocated exclusively for the CSI activity. CSI can also aim at reaching an
economic profit, but the priority of the enterprise is the social benefit.
It is obvious that within the activities of a Social Enterprise of CSI, a profit can be elaborated. But the
essential target of the enterprise is the social reintegration of the CSI participants who work in its social
enterprise.

The Act on Social Employment talks about Clubs for Social Integration.
Legal requirements for the Clubs’ existence

Entities which establish Clubs for Social Integration
Clubs for Social Integration can be created by local governments or non-governmental organizations which
run social and vocational reintegration for people who are socially excluded and due to their life situations
are not able to appease the basic needs. They are in a situation which causes them poverty and reduces
their participation in a vocational, social and family life.
The Act does not set any particular rules for creating the clubs by non-governmental organizations.
Therefore the best form of action is treat the Clubs as a non-governmental organisation.
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On the basis of regulations (article 9, chapter 1 of the Act dated 8 March 1990) Clubs for Social
Integration can be run directly by Regional municipalities (Dz.U.01.142.1591). The article says „in order to
implement its tasks, local municipality can create organisational entities as well as sign agreements with
other entities including non-governmental organisations”. The regulation indicates that Clubs for Social
Integration run by local municipalities can act as its organisational entity. Local municipality, in the process
establishing a Club for Social Integration, must equip the organisational entity in the Club for Social
Integration’s regulations.
Such Clubs can also be run as a specialized entity of Social Support Centre. Such solution is accepted
according to the regulations (article 15 , point 6 of the Act on Social Assistance dated 12 March 2004
(Dz.U.04.64.593). The Act is in favour of “developing new forms of social assistance within the identified
needs”. Social Support Centre can run Clubs for Social Integration as one of its units in the Department of
the Community Aid.
In particular, the clubs for social integration conduct the following actions and activities:
1) help in finding a job for a defined period of time or to complete a defined task on part time or full
time basis; providing services based on the written agreement under civil law; preparing for
undertaking the employment
2) public benefit work;
3) public works;
4) counselling;
5) mutual help in the field of employment, housing and social matters.
Establishment of the clubs for social integration and their activities can be financed in particular by:
1) the European Union;
2) grants from the local municipality.
The Clubs do not run economic activity. The activity run by in the Club is based on public benefit works and
public works realized on the local market and whose costs are covered by Employment Fund. Therefore
economic activities of the Club for Social Integration are limited.

Ad. C) Act on Social Cooperatives
Social cooperative runs the activity in favour of social and vocational reintegration of the long-term
unemployed, the homeless, the addicted, disabled people, ex-prisoners, refugees, etc., through an
individual work of its members.
People establishing social cooperatives can receive a grant of 300 % of average of national wage which is
30

about 8.500 PLN per person from the Employment Fund.
The statutory scope of a social cooperative which partially embraces the social and vocational reintegration
of its members, is not considered an economic activity in accordance with the Act on Economic Freedom
dated 2 July 2004 (Dz. U. Nr 173, poz. 1807, z późn. zm.6), and it can be run as a statutory chargeable
activity.
With regards to a statutory chargeable activity, one must follow the regulations described in the Act on
Public Benefit Organisations and Volunteerism dated 24 April 2003. Employment in a social cooperative
takes place on the basis of the cooperative employment contract. The contract does not include the right of
division in case of account surplus.
The account surplus is divided as a result of the vote of the general meeting and it is allocated for:
1) increase of the reserve fund – no less than 40%;
2) for social reintegration purposes – no less than 40%;
3) investment fund.
Social cooperative can join only with other social cooperative and divide only to social cooperatives, with
2/3 voted members.
In case of liquidation of a cooperative, its property that comes out from public sources has to be returned to
the Employment Fund or the State Fund for Rehabilitation of the Disabled (it depends on which institution
supported the cooperative).
Cooperatives of invalids can transform to become a social cooperative as a result of a vote (by a majority of
votes).
A social cooperative can participate in the bid for the implementation of public tasks organized by public
entities. It is the cooperatives which take an initiative to submit applications. The grant can be used for
social and economical reintegration of its members and for providing services for local society.
In connection to legal regulations, social cooperatives can benefit from dismissal from: stamp duty, tax from
civil and legal activities, income tax, and council tax. Those simplifications emphasize the social targets of
social cooperatives and their character as a Work Integration Social Enterprise.

Ad D) Act on Foundations dated on the 6th of April 1984. According to the Act on Foundations (Art.1), a
foundation is established to implement objectives that are convergent with the basic interests of the
Republic of Poland and which are socially or economically beneficial; in particular: health protection,
development of economy and science, education and upbringing, culture and art, care and social support,
environment protection and monument care. Foundation can run economic activities as long as it serves
31

the realisation of its objectives. A decision on economic activities implementation must be included in the
memorandum of association of the Foundation.
Ad E) Act on Associations dated on 7 April 1989.
In agreement with the Act on Association (Art. 34.), an association can run economic activity however it
must follow general principles defined in separate regulations. Income from the economic activity of an
association serves the realisation of the statutory objectives and cannot be divided between its members.
Ad F) Act on Public Benefit Activity and Volunteerism dated on 24 April 2003.
According to Act on Public Benefit Activity and Volunteerism, a non-profit organisation can run 3 kinds of
activities: a) statutory activity free of charge, b) statutory chargeable activity and c) economic activity. The
two first kind of activities represent statutory goals listed in the memorandum of association along with the
ways of their implementation. Both chargeable and unchangeable activities are ventures not for profit.
Public benefit activities free of charge are those for which an organisation does not take any salary. An
organisation acquires financial grants for its activity from a variety of sources (applies for donation, seeks
for donors and sponsors, organises public collections), takes advantage of volunteers’ work which enabled
them to run services free of charge for clients (eg. organises training for which the participants do not have
to pay, serves free meals etc.).
A chargeable public benefit activity is a statuary activity of a non-profit organisation which an
organisation earns salary for. The salary earned by an organisation for produced services or goods in a
specific area cannot be of a higher value that the one which results from direct costs of the activity.
In organisations which run chargeable activities the employees’ salaries are limited.
The Act foresees two particular kinds of chargeable activity for public benefit:
- Sale of commodities or services produced or run by individuals direct involved in the public benefit
activity especially in the scope of rehabilitation and adapting the handicapped to enter employment .
- Sale of objects which were received in a form of donation for the purposes of public benefit activity.
The term economic activity is defined by the Act on Economic Freedom dated on the 2nd of July 2004.
According to article 2, an economic activity is a chargeable, reconstructive/restorative, building-
construction, service-oriented activity as well as seeking, recognising and exploiting natural resources and
also a professional activity performed in a continuous and organised way. A chargeable public benefit
activity of non-profit organisations is an economic activity if:
1. The salary acquired within a particular activity or business, is higher than the one which is results from
the calculations of direct costs of this activity/business.

32

2. The salary of a natural person by virtue of employment to implement statutory activity free of charge
as well as chargeable activity exceeds by 1,5 the average monthly salary in the enterprise sector
announced by the President of the Central Statistical Office for the previous year.
One is not allowed to run a chargeable public benefit activity and economic activity within the same subject
of activity.
Non-profit organisations can run two kinds of social enterprises:
1. Those, which support social objectives and the needy individuals allocating the elaborated resources to
reach this.
2. Those which employ mainly individuals with difficulties to find a job: the handicapped, the homeless,
the long-term unemployed, the addicted and those who use social care.
WISE is implemented when an organisation runs a chargeable public benefit activity and/or an economic
activity under the condition that they employ workers from disadvantaged groups and run reintegration
programs which involve these workers (the second kind). Legal act do dot regulate these matters. Whether
an organisation will or will not run a social enterprise and what kind of groups will be involved in
reintegration activities, depends on records included in the statute of an organisation.
Ad) G. The Act on the employment and promotion of institutions of the labour market will be
described in the next part.
Tax exemption
A. Income tax
Foundations and associations are not exempt from taxation duty to the State.
Non-profit organizations are obliged to pay income tax just as other entities. This is due to the fact The Tax
Act does not allow subjective tax exemption of the non-profit organizations. Nonetheless, the majority of
non-profit organizations don’t pay income tax. This may be associated with the fact The Tax Act covers a
broad spectrum of objective tax exemptions. The revenues spent on social cause purposes, listed in the
Tax Act are exempt from taxation. This leads to tax exemption of the majority of revenues acquired by non-
profit organizations. It must be stressed that only revenues spent on strictly defined purposes may benefit
from tax exemption. Income tax exemption may only benefit organizations carrying out statutory activities
that fall within the frames set in The Tax Act.
Entities that have been granted public benefit organization status are entitled to a broader range of tax
exemption. Tax exemption in this case includes revenues spent on all statute-defined objectives falling
within a sphere of public benefit and not only set out by The Tax Act. This applies to statute activities with
exclusion of business activities.
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Additionally, according to the 17 article of the Act on legal person’s income tax, tax exemption may benefit
partnerships that are solely owned by registered associations. However only this part of partnership’s
revenue is covered by tax exemption that was given to the owner – an association and was spent on the
objectives defined in the same article. Legislator decided on tax allowances for financial donations
supporting non-profit organizations. These allowances apply to those of the tax payers who are subject to
corporate and personal income tax settlement, but on slightly different rules. Every year the maximum
amount is subject to tax allowance changes.
B. Tax on goods and services (VAT)
Non-profit organizations are not automatically subject to VAT exemption. The Act of 11th March 2004, on
goods and services tax, treats social cause activities of non-profit organizations as business activities
(article 15). VAT exemption is defined in the article 43rd of the above mentioned Act. From the associations
and foundations perspective, significant is the provision reading „services provided by membership
organizations, not classified elsewhere (statutory organizations exclusively) (marked with a symbol PKWiU-
91)1” are subject to tax exemptions. The above mentioned exemption is not dependent on the range of
revenues associated with those services.
If the organization’s activities don’t fall within the remit set in the VAT exemption services catalogue,
organization can only exercise tax exemption if the total income of the activities run didn’t exceed the
equivalent of 10,000 EUR in the previous or present year.
Goods donated (for example by corporations) for the benefit of non-profits are liable to tax (article 7). The
acquisition/purchase cost serves as a tax base. If this however does not apply, it is the production cost that
serves as a tax base.2 The Act allows numerous objective tax allowances. Financial donations for non-
profits are subject to VAT taxation.

B.1.2 Other public support not specially targeted at WISEs
Summary
In the chapter described are support forms available to all entrepreneurs, which can also be used
by WISE. These support forms are solutions within the policy of employment: interventionist works,
reimbursment of the costs of equipment in a work place, one-off reimbursment of social insurance costs,

1
There are different interpretations of this legal provision. Unfortunately Revenue Offices, usually apply narrow
interpretation, stating that the above mentioned provision refers only to services provided by an organization for the
benefit of its own members, but within the limit of the membership fees, namely without the remuneration for the
particular service.
2
When items donated lost its economic and commercial utility according to entrepreneur’s judgment, it is better for
a non-profit organization to purchase items for a symbolic amount of money. Then the purchase price will serves as
a tax base.
34

social benefit works and public works. These forms are atractive for stable entrepreneurs who are able to
quarantee employment for the unemployed persons for at least two years. Due to a weak condition and
very uncertain prospects for the future, WISE use only those forms which do not require two-year
employment period such as social benefit works and public works. Aid to entrepreneus, including WISE, is
controled by regulations on de minimis support.
Act dated 20th April 2004 on the employment and institutions of the labour market promotion
establishes following instruments of the labour market that may be beneficial for entrepreneurs, including
WISE:

I. INTRVENTIONIST WORKS

Objective: employment support for the unemployed “in a specific situation within the job market”.
Who can be employed within the frames of interventionist works?
- unemployed up to the age of 25,
- long-term unemployed (registered in a State Labour Office for no shorter than 12 months within the
last 2 years, excluding the period of on the job and vocational training),
- unemployed above 50 years old,
- unemployed without job qualifications (without any qualifications supported by a diploma, certificate
entitling to the job performance),
- unemployed single parents raising at least 1 child of the age of up to 7,
- handicapped unemployed.
Period of employment: depending on the above mentioned categories, interventionist works may last
from 6 to 48 months (in case of refund for every second month).
Level of financial support: refund of a part of remuneration and social insurance contributions based on
refunded remuneration (maximum amount of refund constitutes of the amount of unemployment benefit
increased by social insurance contributions); in case of people who after interventionist works qualify for the
pre-retirement benefits, the level of the refund may amount to up to 80% of the minimal remuneration.
Employer’s costs: employer spends monthly an amount of at least the minimal remuneration along with
margin, refund of some of the costs follows.
Comments: after the refund period, employer is obliged to further employment of the unemployed over the
period depending on the character of public assistance (in case of small and medium enterprises – up to 24
months).

II. REFUND OF THE COSTS OF PREPARATION AND FURTHER IMPROVEMENT OF A WORKPLACE
35

Objective: support of economic entities in the employment of the unemployed
Who can be employed: every unemployed.
Period of employment:
- 2 years - for micro, small and medium enterprises
- 3 years – for other economic entities
Level of financial support: refund of up to 5 times an average remuneration for a creation and further
improvement of a newly created workplace
Employer’s costs: employer incurs full costs of the employment
Comments:
- in order for an entrepreneur to be entitled to a refund, the business activities must run for at least 6
months
- unemployed must be employed full time

III. SOCIAL INSURANCE CONTRIBUTIONS AS THE BASIS OF SINGLE REFUND COSTS

Objective: support of unemployed employment.
Who can be employed: the unemployed
Conditions for the refund obtainment: recommended unemployed worked full time for no less than 12
months and after that time is still employed.
Level of financial help: up to 300% of the minimal remuneration
Employer’s costs: employer incurs full costs of employment

IV. WORKS FOR SOCIAL BENEFIT

Objective: stimulation of the unemployed not entitled to benefits, receiving help from the social aid.
Time and place of the works: works for social benefit must be undertaken in a place of residence or stay
of the unemployed and may not exceed the number of 10 hours per week.
Level of financial help: The commune/municipality receives a refund from Work Fund, accounting for up
to 60% of the minimal amount of the unemployed service entitlement.
Employer’s costs: for every hour of performing social benefit works, unemployed is entitled to a
remuneration not smaller than 6, 20 PLN per hour; 2, 48 deducted from that amount is not refundable.

36

Comments:
- social benefit works may be organized by a commune in organizational units of social aid, statutory
organizations and institutions of charitable character or those working for the local community,
- person performing social benefit works is covered by heath and accident insurance.

V. PUBLIC WORKS

Objectives: support of the unemployed for the time of no longer than 12 months aimed at labour and social
reintegration. In the light of the social employment law, the works are organized by communes, non-profit
organizations that on the basis of their statute deal with: the protection of the environment, culture,
education, sport and tourism, health care, unemployment, social aid, and also water companies and their
associations. The works must be funded or co-funded through state budget, local government units, non-
government organizations, special purpose funds, water partnerships and their associations.
Who can be employed?
- The long-term unemployed persons (registered in a State Labour Office for no less than 12 months
within the last 2 years, excluding the time of on the job and vocational training),
- The unemployed above 50 years old,
- Unemployed single parents raising at least one child of the age no older than 7.
Time of employment:
- up to 6 months,
- up to 12 months (in case of the refund for every second month)
Level of financial help: partial refund of spending on remuneration, awards, social insurance contributions
over the period of up to 6 months, up the level of 50% of an average remuneration and social insurance
contributions based on that remuneration.
Employer’s costs: employer incurs monthly costs of at least minimal remuneration along with margin;
partial refund of the costs follows.
Comments: it is possible for the mayor to apply for the money from the budget of the Work Fund, when an
organizer of the public works claims for it. The money is spent on remunerations and payment of the social
insurance contributions.
Public assistance
Public assistance rules regulate support that can be received by companies. Public assistance may be
defined as public money spending or diminishing public giving in order to support companies or production
37

of particular goods, for the economic benefit of the receiver. According to universally agreed rule, public
assistance for the firms is unacceptable due to the fact it breaks free and equal competition. Polish law, as
well as other countries’ systems, allows exceptions from this rule that are of quality, subjective or objective
character. One of the exceptions is de minimis support. European Commission systemizes the use of the
de minimis rule. It established that support for a firm, which worth is below 200 000 EUR over 3
consecutive tax years and fulfils certain criteria isn’t considered state help in the light of the article 87, 1
Treaty. It is considered that the above mentioned help doesn’t influence economic exchange and free
competition. Therefore there is no obligation of reporting upon receiving such help

B.1.3 Public procurement and WISE

Summary
Public procurement in Poland does not include any preferences for WISE. Public administration units can
commission certain public tasks to non-governmental organisations (including WISE) according to the Act
on Public Benefit Organisations and Volunteerism. The commissioning takes place in the form of support or
subcontracting. In both cases applications are considered in the bidding process.
The Act dated on 29th January 2004. Public procurement law does not predict preferential treatment of the
entities considered to represent social enterprises sector. The may take part in biddings as well as all of the
other entities.
Currently works on up-dating the Act on social co-operatives from 2006 are undertaken. Amongst others,
introducing a change in The Public Procurement law is proposed. The change in the above mentioned law
focuses on adding the following paragraph to the 91 article:
„3b. Ordering body, no matter the conditions set out in the paragraph 2, may decide on particular criteria of
the offer assessment with relation to the employment of at least 50% of people defined by the social
employment law by the delivering organization. Particular criteria must be presented in the public
procurement offer or in the procurement documentation”.
This change would enable public sector entities to employ preferential treatment towards social enterprises,
namely social co-operatives, ZAZ-y and also non-profit organizations. It is not known whether the Office for
public procurement accepts the proposed amendment. If it does, an information and promotional campaign
aimed at local governments and state’s bodies will be necessary in order to encourage them to exercise
this opportunity.

It has to be stressed that the Act on Public Benefit Organisations and Volunteerism establishes that public
administration bodies:

38

1. support public assignments delivery through non-profit organizations running statutory work in
particular field;
2. award public assignments delivery to non-profits.
Delivery and awarding follow running and open offer competition, unless other laws set out different
procedures. In an open offer competition non-profit organizations, social co-operatives and public
administration dependent and controlled organizational units bid. Awards nomination may take place
according to different procedures, if certain assignments may be delivered more effectively in a different
way, defined by separate laws, particularly through a purchase of services on the basis of the public
procurement rules, with comparison of cost calculation methods and taxation comparability. Delivery
support and assignments awarding may take place according to the rules and procedures set out in the Act
from 28th July 2005 on public-private partnership.(Dz. U. Nr 169, poz. 1420).

B.1.4 Private Sector support (non-profit or profit)

Summary
Private sector supports WISE mainly through donations in kind. More serious support comes from other
national and international non-governmental organistions.
6,7% of social enterprises (PES) benefit from other national non-profit organizations (foundations in
particular). 3,7% receive support from foreign non-profit organizations. Apart from that WISEs also receive
donations, mainly in a form of items. Giving donations for social benefit causes is supported by the state
through tax system, namely allowance in income tax. Private entrepreneurs may cooperate with WISE
through ordering a delivery of certain parts of assignment. Currently this form is not used efficiently due to
the fact that the WISE sector is not yet developed and private entrepreneurs aren’t aware of these
possibilities.

B.1.5 Ongoing political debates and trends

Summary
In this chapter described are current on-going public debates with regards to WISE, among others a debate
on the European Union Services Directive and its impact on national law. The discussion on the
implementation on the Services Directive in Poland is first of all about possible negative outcomes which
this process can bring for WISE activities. There are concerns that the differentiation to chargeable
statutory activity and economic activity run by non-governmental organisations will be abolished as this
would be very unbeneficial to the organisations.
39

Other debates concern the relevance of introducing new legal regulations in the field of creation of social
enterprises in Poland. Some debaters believe that a new entity of social economy whose name is “social
enterprise” must be legally separated. Then it could be can be established by NGOs and commercial
companies (as separated organisational and financial entities).Negative experiences in the area of Supported
Employment Enterprises being created by commercial companies, cause a lot of oposition to new proposals for
social enterprises to be established by commercial companies. Another imporatant questions is whether commercial
companies can receive „public benefit certificate” as NGOs do, and whether commercial companies are responsible
for social development or their obligation is focusing on generating profits only.

I. Debates

1. Debate on service directive
Currently there is a heated debate in Poland concerning the results of the Service Directive implementation
(Directive 2006/123/WE European Parliament and Council from 12th December 2006 on services within the
domestic market) with reference to the “third sector”. The objective of the service directive is to bring down
the barriers that service deliverers encounter within the inner market. However, some groups believe that
its provisions may significantly change the law context for the non-profit organizations in Poland. Directive
refers only to those public benefit services that are provided in the economic interest and do not apply to
public benefit social services. However, till present it hasn’t been decided, what public benefit services are,
including social services. It means, that it hasn’t been decided what in practice will be excluded from the
spectrum of services Directive. European Court of Justice agreed that every activity based on goods and
services delivery within a particular market constitutes an economic activity, no matter the legal status of
the entity and sources of its financing. The Court also decided services delivered in exchange for financial
rewards must be regarded as economic activity in the light of The Rome Treaty.
Decisions of the European Court of Justice may have fundamental meaning for the future shape of the Act
on public benefit activities and volunteerism, in the light of which non-profit organizations may run free of
charge, chargeable and economic activities. It is worth noting the intention of the Legislator was to develop
chargeable statutory activities that would at the same time be regarded as non-commercial. Implementation
of the Directive may lead to categorizing non-chargeable statutory activities as economic activities that
would undermine the differentiation between public benefit activities and volunteerism introduced by the
Act. It is not the only possible scenario though. Everything depends on the way the Directive is
implemented to the national law. European Union gives member countries certain freedom with regards to

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