Resignation from creating ZFŚS – a step-by-step guide

Employers often treat the activity of the Company Social Benefits Fund as a system for motivating employees, which is why even companies that are not obligated to create it by law decide to organize such funds. But what should you do when you decide to resign from it? When can you do it and what steps should you take?

• Which companies must create the Company Social Benefits Fund?
• When can you resign from the ZFŚS?
• How to resign from creating ZFŚS?
• Employer covered by a collective labor agreement – resignation from ZFŚS
• Remuneration regulations – resignation from ZFŚS
• Funds in the ZFŚS account

Which companies must create the Company Social Benefits Fund?

It is worth starting with when creating the Company Social Benefits Fund is mandatory, as stipulated by the Act of 4 March 1994 on the Company Social Benefits Fund. This is necessary when the company employs at least 50 employees in terms of full-time equivalents.

It is worth knowing that until the end of 2016, the minimum number of employees that required the organization of the ZFŚS was 20 employees in terms of full-time equivalents. The number of people working in the company is always determined as of January 1 of the current year, and this provision is still valid, with changes in personnel that occur during the year not affecting the decision to create or resign from the ZFŚS.

An exception, however, are companies belonging to the budget sector, which must always conduct social activities within the fund, regardless of the number of employees they hire.

When can you resign from the ZFŚS?

The regulations divide employers into three categories: small, large, and budget. As mentioned, budget employers cannot resign from creating the fund regardless of the number of employees hired. Who are small and large companies according to the law?

Since 2017, small companies are those that employ less than 50 employees in terms of full-time equivalents. If the employer voluntarily decided to establish the ZFŚS in previous years, they can only resign from creating it in January of the given year.

On the other hand, large companies employ at least 50 employees in terms of full-time equivalents, but can resign from creating the fund on any day or month of the year. However, the procedure for terminating social activities in their case is more complex and detailed. So, how to do it?

How to resign from creating ZFŚS

Depending on whether there is a collective bargaining agreement or a remuneration regulations in place, different steps must be taken to resign from establishing a company social benefits fund (ZFŚS).

A collective bargaining agreement is an in-house agreement between the employer and trade unions regarding employment relationships. It usually extends the rights of employees arising from the provisions of labor law.

On the other hand, remuneration regulations define the conditions of remuneration for work. The need to create such regulations applies to companies employing at least 20 employees in which a collective bargaining agreement has not been introduced

Employer covered by a collective bargaining agreement – resignation from the Company Social Benefits Fund (ZFŚS)

To be able to resign from the Company Social Benefits Fund, the provisions of the collective bargaining agreement must be changed through an additional protocol, which is carried out in four main stages.

First, the employer must inform all trade unions about plans to resign from social activities under the ZFŚS. In a situation where this decision was made as a result of a deterioration in the company’s financial situation, trade unions cannot refuse to initiate the procedure.

Next, the trade unions have 30 days to present their position on the matter. If they fail to do so, the final decision is made by the employer.

The next step is to terminate the part of the agreement that contains provisions on the social fund, and the notice period, if not otherwise specified, is three months.

Finally, the additional protocol informing about the resignation from the ZFŚS must be registered by the District Labor Inspectorate.

Compensation Policy – Resignation from the Social Benefits Fund

In this case, it is necessary to introduce an addendum to the compensation policy regarding the resignation from the social benefits fund. Changes to the policy must be agreed with the trade union, if one operates in the company, or with a representative elected by employees. Once the addendum is accepted, it must be communicated to the employees, and the provisions contained therein come into force within 14 days from the date of announcement.

Funds in the Social Benefits Fund Account

There is one more important issue related to resignation from the social benefits fund – what to do with the accumulated funds? First of all, if the employer resigned from creating the social benefits fund during the year, they are still obliged to make contributions, but the amount is determined proportionally to the time of the fund’s operation, and unused funds cannot be voluntarily distributed by the employer. In this situation, the amounts collected in the social benefits fund account must still be used for the intended purpose.

Is it worthwhile to resign from the company’s fund? In the case of a significant deterioration in the financial capacity of the company, yes. However, if there are no such indications, it should be remembered that it is a convenient way to motivate employees and increase their loyalty to the company.