Poland: Background Checks in Financial Institutions – Liberalization of Rules

A bill on rules for obtaining information on clean criminal records of job candidates and employees of financial sector entities is making its way through the Polish Parliament. Once enacted, the law will legalize criminal background checks. Concurrently, as part of preparations for GDRP implementation, work is underway to amend rules on employee data processing in the Polish Labor Code.

Banks and other financial institutions worldwide rely on background checks in order to minimize the risk of fraud and to protect their reputation. In Poland, however, background checks are mostly prohibited. Under the Labor Code and the Personal Data Protection Act, employers may run background checks only when permitted by other, specific regulations. The Supreme Court decisions confirmed that background checks are prohibited even if the employee expressly agrees to the check.

The new bill’s drafters recognized this issue stating that “the proposed amendment will contribute to improving the image and credibility of […] financial companies, increasing the appeal of Poland as a place to locate shared services centers. Consequently, the amendment may bring about an increase in employment.”

The bill provides a list of financial institutions that will be allowed to run criminal checks of work candidates. Under additional provisions, the bill permits such checks to be also made by companies that provide services to their clients which are financial institutions. This provisions will cover most of the service centers and outsourcing companies working for banks, insurers and other financial institutions. There will be, however, important limitations as the nexus to the financial operations, as provided by the bill, will have to be established. Companies wanting to run criminal checks will have to verify whether their operations under contracts with clients or entities from groups of companies for which they provide services meet the bill’s criteria.

The bill provides for a closed list of offenses subject to criminal checks carried out by employers. Generally, information about a clean criminal record will be provided as a statement of the person concerned or as a certificate from the National Criminal Register (KRK). Employees may have to provide statements on their clean criminal record (or conviction) or information from the KRK not more frequently than once every twelve months and whenever employees change their positions to the ones for which, in accordance with the draft provisions, such statement or information from the KRK may be required and employees consent to employment at such positions.

It will also be possible to require a certificate if there is a reasonable suspicion that the employee has been convicted for an offense in the course of his or her employment or if functions performed by the employee change.

Failure to provide information on criminal record will not be allowed as a reason for termination of an employment contract or any other contract under which a person is employed.

In the view of the bill’s drafters, the bill meets the requirements of the GDPR (the regulation of the European Parliament and of the Council (EU) 2016/679 of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC). One of them is a requirement to adequately secure the rights and freedoms of data subjects. Any data resulting from a criminal check will be permitted to be stored only for a period necessary to achieve the objective of enabling a financial sector entity to carry out its employment policy to reduce risks connected with the loss of property. That period, however, may not be longer than five years.

The provisions of the bill may end up being implemented by the planned amendments to the Labor Code. In line with these planned amendments, generally, personal data of employees will be permitted to be processed with the consent of a data subject provided that it is advantageous for such person. Therefore, the scope of the proposed changes to the Labor Code may result in a longer list of processed data than the one resulting from the bill described in this article.

The bill has been referred to the Senate Committee of Budget and Public Finances. The Senate has 30 days to decide on the bill’s wording. Once the bill is adopted both by the Sejm and the Senate, the Sejm Speaker will send it to the Polish President. In accordance with the bill, the act will come into force within 14 days of its publication in the official journal of laws.

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By CDZ Legal Advisors, Poland a Transatlantic Law International Affiliated Firm. 

For more information on this topic, please contact Ewa Don-Siemion at polandlabor@transatlanticlaw.com.

Disclaimer: Transatlantic Law International Limited is a UK registered limited liability company providing international business and legal solutions through its own resources and the expertise of over 105 affiliated independent law firms in over 95 countries worldwide. This article is for background information only and provided in the context of the applicable law when published and does not constitute legal advice and cannot be relied on as such for any matter. Legal advice may be provided subject to the retention of Transatlantic Law International Limited’s services and its governing terms and conditions of service. Transatlantic Law International Limited, based at 42 Brook Street, London W1K 5DB, United Kingdom, is registered with Companies House, Reg Nr. 361484, with its registered address at 83 Cambridge Street, London SW1V 4PS, United Kingdom.