Ruling description

A panel of 7 judges of the Supreme Court (SN) adopted a resolution on June 17, 2015 (case file no. III UZP 2/15), worded as follows: A member of the management board of a joint-stock company who concluded a service contract with the said company for provision of management services conducted as part of his/her non-agricultural business activities is subject to social insurance on the basis of the service contract (Article 6 Section 1 Point 4 of the Act dated October 13, 1998 on the social insurance system – consolidated text: Journal of Laws of 2015, item 121).

The Supreme Court gave legal effect to the resolution and stated that the interpretation presented therein is binding as of the date of its adoption (i.e., as of June 17, 2015).

Comment

The SN supported the interpretation of provisions of the Act on Social Insurance Contribution that was presented by the Social Insurance Institution (ZUS), according to which all managerial contracts should be subject to social insurance contributions on the same terms as a mandate contract (i.e., the contribution assessment basis depends on the actual revenue obtained by a management board member on the basis of his/her managerial contract rather than the declared minimum amount from his/her business activity).

The SN had previously questioned the above approach presented by the ZUS (e.g., in the rulings dated December 9, 2008, case file number: I UK 138/08 and June 23, 2009, case file number: III UK 24/09). Nevertheless, in the ruling of November 12, 2014 (case file number: I UK 124/14), which we had previously discussed, the SN found that management board members who concluded managerial contracts should be registered with the ZUS as contracting parties regardless whether they act, in the said contracts, in the capacity of natural persons or entrepreneurs conducting their management activities. In this situation the company which employs them becomes the payer of the contributions.

In light of the aforementioned ruling and the commented resolution of 7 SN judges, and first and foremost in light of the legal force given to the said resolution, it should be concluded that the SN departed from its previous position which was beneficial to management board members. It may be expected that the rulings handed down by courts of lower instances in similar cases, including ones which refer to the previous factual status, will be consistent with the thesis presented in the resolution in question.

A practical consequence of handing down the resolution in question is the fact that the company’s (payer’s) duty to register management board members with whom the company has signed managerial contracts (even if the services are provided as part of the business activities of the said members), for the purposes of social insurance, has already been determined. Consequently, our recommendation would be to consider changing the currently adopted approach in terms of contributions paid from managerial contracts, verify future settlements and assess possible risk.