Polish companies in the face of crisis establish the Association of Polish Trade and Services Employers

Entrepreneurs, driven by the sense of utmost responsibility, and fully aware of the catastrophic consequences of the crisis caused by SARS-CoV-2 epidemic outbreak and spreading, have decided to establish the Polish Trade and Services Employers’ Association. The owners of Polish clothing, footwear, accessories and other brands have come together to take actions that will contribute to saving Polish companies, and thus the jobs of hundreds of thousands of employees, as well as a whole host of co-operators working with them on a daily basis. The association worked out common postulates which were addressed in a letter to Jadwiga Emilewicz, Minister for Development. In the light of current situation, immediate support from the State is necessary.

Polish companies, with a long family tradition, have faced a disaster. After the stores shutdown following the introduction of the state of epidemic threat, the companies have lost their ability to continue operating practically overnight. In the short term perspective, this will entail a drastic drop in revenue and difficulties in covering all liabilities, in not-so-distant future – spectacular bankruptcies, and thus the loss of jobs for hundreds of thousands of employees and a lack of orders for thousands of subcontractors and other cooperating companies.

Without immediate help from the State, companies that have been the pride of the Polish economy for years and a showcase on foreign markets will not survive the crisis and thousands of people will be left unemployed. That is why the Association addressed the government and presented the postulates in a letter, indicating target areas and proposals for discussion and elaboration of ultimate solutions.

Związek Polskich Pracodawców Handlu i Usług [ZPPHiU, the Polish Trade and Services Employers’ Association] gathers over 50 companies representing exclusively Polish brands and Polish capital successfully operating in the area of trade and services. The companies forming ZPPHiU employ over 150,000 people. All these companies have been suddenly deprived of revenues as a result of the shopping centres shutdown. There is no industry in Poland which would be more severely affected by the outbreak of the coronavirus epidemic. Following the discussions between the companies belonging to ZPPHiU, postulates have been worked out, the fulfilment of which is of utmost importance for all the companies belonging to ZPPHiU and determines the further existence of these companies. The possible collapse of these companies will cause the retail and services sector with Polish roots, which effectively competes with the largest European companies, to collapse with dramatic consequences for the Polish economy, budget and society.

POSTULATES

Securing workplaces

1. Participation of the government in covering the employee wage costs at the level of at least 80% of basic wage for the period of non-performance of work or reduced working hours due to the shopping centres shutdown and during the period of recovery from the pandemic.

2. Enabling the employer:

(I) to reduce working hours with a proportional reduction of wages,

(II) to introduce the possibility of extending the working time reference period to 12 months (including the system of equivalent working time)

at the discretion of the employer without consulting the employees.

3. To cover sick pay from the first day of sick leave and deferring the payment of ZUS [Social Insurance Institution] contributions calculated for the period of an epidemic threat for 6 months.

Maintaining liquidity

1. Exemption of landlords from tax obligations for the period of shopping centres shutdown and allowing them to pay taxes on rents and charges actually paid.

2. Working out solutions, including government guarantees, obliging banks to make long-term working capital loans available, based on the results for 2019 and 2018, and to provide appropriate bank guarantees to secure settlements with contractors in international and domestic relations, whose liquidity was threatened due to reduced sales during the virus pandemic.

3. Exemption from social security contributions for the retail and service sector for the period of the shopping centres shutdown.

4. Exemption from CIT, PIT, and VAT for the retail and service sector calculated for the period of the shopping centres shutdown.

Social issues

1. The entrepreneur should be able to temporarily suspend all or part of the company’s operations, with a guarantee of public funding.

2. All types of donations made to entities taking action against the coronavirus should be deductible for tax purposes.

3. Lifting barriers to receiving public aid.

4. Suspension of legal regulations giving rise to civil, criminal and administrative liability on the part of the representatives of debtors and the debtors themselves for not submitting a bankruptcy petition within the prescribed time limit (other application an insolvent or threatened debtor is obliged to submit), including in particular Article 21(3) and Article 373(1) of the Bankruptcy Law, Article 299(1) and (3) and Article 586 of the Code of Commercial Companies and Partnerships, and Article 116 of the Tax Ordinance.

List of Members:

AGATA MEBLE, Answear, APART, BIG STAR Ltd, CCC, Gino Rossi, Cocodrillo, Sowa Sp. J., Diverse, Duka, Gatta, Home&You, Inglot Sp z o.o. Inglot, KAN Sp. z o. o. (Tatuum), Kazar Sp z o.o., LANCERTO S.A., LPP SA (Reserved, Mohito, Cropp, House, Sinsay), Martes Sport, Mediaexpert, Medicine, Monnari, Neonet S.A., Ochnik S.A., Redan S.A, Ryłko, Smyk, Solar, Yes S.A, Wojas Sp z o.o. Wojas, VRG S.A. (Wólczanka, Kruk, Vistula, Deni Cler, Bytom), Venezia, 4F OTCF Sp z o.o.

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LPP SA is a Polish family business and one of the fastest growing clothing companies in the region of Central and Eastern Europe. For over 25 years it has been successfully operating in Poland and abroad, offering its collection already on 25 markets, including in such prestigious capitals as London, Berlin, Tel Aviv or Moscow. LPP manages five fashion brands: Reserved, Cropp, House, Mohito, and Sinsay. The company has a chain of over 1700 stores with the total area of over 1 million sq.m. The online offer of the brands collections is available on 30 markets. Through a global supply chain, the Polish clothing producer distributes over 200 million pieces of clothing to three continents. LPP plays another important role as it employs over 25 thousand people in its offices and sales structures in Poland, Europe, Asia, and Africa. The company is listed on the Warsaw Stock Exchange in the WIG20 index and belongs to the prestigious MSCI Poland index.