Anti-covid shield program contrary to the Basic Act?

In June of this year, the Supreme Audit Chamber asked the Constitutional Court to examine the compliance of anti-covid shield regulation and business aid schemes with the essential law (reference no. K 9/23). It was composed by the Supreme Chamber of Control, which holds that the specialities were incompatible with the Constitution.

The President of the Supreme Chamber of Control mentioned in the proposal a number of doubts which may constitute a contradiction between covid shields and the Constitution. For example, the President of the NIK points out that:

Although the Council of Ministers, as a public administration body, entrusted PFR SA with the implementation of government programmes, i.e. tasks in the field of public administration, the Company was not equipped with the status of an administrative body within the meaning of the Act of 14 June 1960 Code of Administrative Procedure.

In this respect, in the opinion of the Chief Administrative Court, among others[9], There is a phenomenon of privatisation of public tasks, as public administration is carried out by an entity outside the administrative structures.

The provisions of the statutory rank do not delegate to the PFR the power to take over or authorise an agreement in this respect. The Polish Development Fund SA is a commercial law company carrying out a public mission within the meaning of Article 2(8) Act of 16 December 2016 State property management rules.

It is not a public finance entity within the meaning of Article 9 Act of 27 August 2009 public finances. According to the justification for the bill on the system of development institutions[10], PFR S.A. was to focus on ‘commercial activity, not the performance of public tasks’.

As you can see, there have been legitimate doubts which court – civil or administrative – should address business matters. The examination of the President’s request by the Constitutional Court may help to assert his rights by one thousand entrepreneurs.

If public tasks are delegated to private entities, the State must supervise the proper performance of those tasks and assume responsibility for the proper exercise of that supervision.

Privatisation of public tasks should not impair the situation of citizens who are beneficiaries of these tasks and their level of protection should not be reduced in relation to that guaranteed by the State where it could carry out that task.

(...) The Council of Ministers, contrary to the content of the statutory mandate, has delegated the PFR SA powers to a greater extent than was apparent from the Article 21a(1) The SIR Act, including the powers which were not allowed to be transferred because it concerned acts of a sovereign nature, i.e.

one-sided development of rules on the provision of public-law aid, which should be carried out on an exclusive basis by public authorities.

The failure of the legislator to delegate powers to the PFR SA to determine, specify or modify government programmes may be evidence of the adoption of provisions which are subject to control with an excess of competence and in breach of the principle of proper legislation.

(...) The Council of Ministers delegated to the PFR SA issues that should be – in the light of Article 21a(2) SIR – regulated in the content of programs (responsible), which shows a violation of the principle of legalism, a prohibition of presumption of competence and an order to maintain the law-making procedure (by exceeding the statutory power to issue a resolution by the Council of Ministers).

Moreover, in the light of the principle of legalism and the definition of the law, it was unacceptable for an entity outside the public administration to be authorised to use an administrative recognition institution.

At the same time, the contested provisions are contrary to Article 21a(2) The law on the SIR, because this provision ordered the regulation of the issues in the resolution of the Council of Ministers (government programme), rather than leaving them for further regulation by a non-state body, or PFR SA[1].

Some entrepreneurs who benefited from the program run by PFR S.A. (Tarcza 1.0 be 2.0) has attempted to defend her rights and lodged complaints with the Provincial Administrative Courts and, next, the Supreme Administrative Court. In most cases, complaints were rejected or dismissed by administrative courts.

However, legal trade is one a decision, known to the author of this study, in which the NSA waived the decision of the WSA, in which the court of first instance rejected the action because of the lack of jurisdiction of the administrative court to examine the case.

The statement of reasons for the decision repealing the provision of the WSA raised: Since the Fund should be treated as a public administration body (in functional terms) carrying out public tasks, the nature of its activities should be considered.

The actions of the Fund cannot be attributed to the value of the application of the law, which has been crowned by an administrative decision. It is, on the other hand, the exercise of the law, without any specificity of the standard of substantive law.

The action taken on the basis of a direct legal standard to refuse to provide support and consequently to conclude the contract is therefore a legal form of administrative action, subject to review by the administrative court on the basis of Article 3(2)(4)  PPSA.

For these reasons, the dispute is examined by the administrative court because the jurisdiction of that court derives from those provisions of the law, to which the legislature refers Article 184 Constitution[2].

From the knowledge of the author of this study, some entrepreneurs filed lawsuits against PFR S.A. to the general courts and some lawsuits were dismissed and most cases were not properly identified. As you can see, there have been legitimate doubts which court – civil or administrative – should address business matters. The examination of the President’s request by the Constitutional Court may help to assert his rights by one thousand entrepreneurs.