Employment & Industrial Relations Law. Newsletter of the International Bar Association, September 2010.
In the Russian mind the word combination “trade union” usually brings about memories of our green years, Russian resort vacation vouchers and Christmas presents for children. After the start or perestroika and collapse of the Soviet Union, trade unions were preserved in Soviet-type organizations only, and had no real influence upon the employer. The recent polls have demonstrated that the Russians still would not entrust trade unions with representation of their social and labour interests; moreover, people are rather apprehensive about such any trade-union initiatives.
Yet, the recent years saw a considerable growth in Russian trade unionism, which has been demonstrating an increasingly stronger impact on the employment relations. Of course, no one has heard of any important-scale industrial action in Russia that would, for several days, paralyse the whole country, like in the UK, France or Spain. However, the whole Russia was watching newsreels of trade unions’ efforts that resulted in serious financial damage to employers, in particular, a strike at Ford Motor Company in the town of Vsevolzhsk.
The last decade saw the formation of trade unionism of a different type that is not subservient to the state or any political party, like in the Soviet epoch, although a lot of post-Soviet organisations have preserved within their HR departments purely Soviet-type social functions, like handing out sanatorium-and-resort vouchers to and buying birthday presents for employees, without ever coming even close to the worker’s interests protection.
In Russia, trade unions are very well protected by law: they enjoy numerous rights and political support, which is supposed to promote trade unionism in Russia. For example, in the recent years the practice, under which the employer, employees and executive authorities enter into three-partite agreement has become increasingly common. Such agreements provide for a variety of social and labour law issues. The execution of such agreements has been, initiated, largely, by executive bodies, whereas employers have become parties to them, unless they were averse to such practice. Such agreements are binding upon all the employees concerned. As of now, over 130 agreements of this type have been concluded in Russia.
In accordance with the Russian law, a trade union, being a public organisation, may be created, provided membership roll of at least three persons. Hence, it takes only three people who are unhappy with their salaries and working conditions to set up a trade union that would possess quite a wealth of powers and guarantees. To unionise, it is required to just hold a general meeting (of at least three union members) and adopt a resolution, by which the employees would be unionised, the trade union charter approved and the governance bodies appointed. The minutes of such general meeting constitute sufficient proof a trade union set up. Then the trade union must be registered as a public association with the RF Ministry of Justice. However, local trade unions tend to avoid registration as separate units; they rather join existing industrial or territorial trade unions, which have been quite numerous in Russia, since the USSR era (All-Russia Trade Union of Automobile Transport and Road Employees, All-Russian Trade Union of the RF Agroindustrial Complex Employees, All-Russian Trade Union of Coal Mining Industry Employees, etc.). To admit a new member, a superior trade union has to deliver to the local trade union leader a letter confirming the admittance. Once such confirmation letter has been delivered, it would be impossible to terminate labour relations with such a leader on non-culpable grounds, unless the superior trade union organisation provides its consent (which is invariably denied). Since the unionisation procedure is quite easy and simple, unionisation occurs for a purpose, which has nothing to do with social partnership promotion; rather it is done to exert pressure on the employer in conflicts that arise between quite limited groups of employees and administrations, in order to protect the formers’ self-interest.
In view of the above, it can be concluded that there is no way to prevent unionisation in Russia. An efficient HR policy can mitigate this risk, but it is impossible to rule it out altogether. Nevertheless, even if employees get unionised, one can learn to effectively cooperate with them.
The first difficulty an employer meets with, once a trade union is formed that such employer has to provide the trade union with resources, including premises for meetings and storage of documents and information, and ensure that the membership fees are withheld and remitted on a gratuitous basis, and furnish it with office technologies and regulatory documents (provided the number of the unionised employees exceeds 100).
Furthermore, the employer must reckon with the trade union’s opinion with regard to dismissal of a trade union member at the employer’s imitative on a whole number of grounds, like staff lay-offs or reductions or dismissal for inaptitude to the position held or work done due to insufficient knowledge and skill, as confirmed by appraisal results or in view of repeated failures by an employee to perform his/her employment duties without a valid reason, where such employee is under disciplinary action. Also, the trade union must always be notified of any manpower release that may result from staff lay-offs or reductions.
However, no significant influence can be produced by a trade union upon an employer, unless over 50% of the employees unionise. Therefore, the larger the headcount, the harder it is to unionise the majority of it. The opinion of a trade union that unites over 50% of the organisation’s employees must be reckoned with in adopting any local rules and regulations (policies, proceedings) and documents governing labour relations. In particular, the Internal Rules and Regulations (which is a basic labour document in any organisation) and the Appraisal Regulation may be adopted only with due account of the trade union’s opinion.
An employer should take into account the trade union’s opinion on the following matters: introduction of non-complete working time procedure, overtime working schedule, shift schedule, work on day-offs and holidays, vacation schedule, salary slip form approval, labour remuneration and working standards and rates approval, increased payment for night work, etc. And, of course, a trade union uniting over 50% of the organisation’s employees may initiate the conclusion of a collective agreement. As a matter of fact, even where under 50% of an organisation headcount are unionised, the trade union may be given a mandate for collective bargaining on behalf of the employees at the general staff meeting (which must be attended by at least 50% of the employees) or another representative body may be elected by the employees. The parties who have been served a collective bargain offer must enter into the negotiations within seven days.
The contents and structure of a collective agreement must be determined by the parties, and such collective agreement may contemplate i.a. remuneration, benefits, compensations, meals, inflation or consumer price hikes-based salary revision, employment matters, re-training, working and recreation hours, improvement of working conditions and labour safety, guarantees and privileges for specific employee categories, control over the execution of the collective agreement and all other terms and conditions, which the parties may agree upon. The parties have all the freedom in developing such provisions; such freedom is restricted only by the effective labour law and prohibition to reduce employee guarantee levels below the statutory ones. A collective agreement is normally concluded for a three-year term and may be extended for a maximum of three years. A collective agreement is applicable to all the employees of a relevant organization; and a collective agreement concluded in a branch, representation or separate structural subdivision of an organisation - all the employees of such unit.
Lack of consensus among the parties to a collective employment agreement on any issues is fraught with a collective labour dispute. Such dispute may result from the employer’s refusal to reckon with the opinion of an elected employees’ representative body, while adopting a local regulatory act.
“Collective dispute start date” means a date, when an employer communicates its decision on rejecting all or a part of the employees’ requirements or deadline, when an employer fails to communicate its decision or a date, when a relevant memorandum of disagreements is made in the course of collective bargaining. The collective dispute settlement procedure is a stage-by-stage process, which includes: examination of a collective labour dispute by a conciliatory committee (obligatory stage); settlement of a dispute through an intermediary and/or labour arbitration. All agreements that may be reached by the parties at any stage of a labor dispute settlement are binding upon them.
Should the parties fail to settle a collective dispute through conciliatory proceedings or the employer is flinching from participation in conciliatory proceedings or fails to consider agreements that may be reached during the negotiations, the employees are entitled to go on a strike. A decision to go on a strike must be made at a staff meeting (conference) to be attended by at least 50% of the organisation’s headcount, and at least 50% of the employees present at the meeting must vote for a strike. Indeed, participation in industrial action does not constitute a labour discipline violation (provided observance of all the applicable requirements); yet, employees are not paid for such voluntary refusal to work (unless otherwise stipulated in a relevant collective agreement). The Russian labour law does not in any way preclude engagement by the employer of temporary employees, which the employers always resort to.
It should also be noted that the Russian labour law envisages significant restrictions upon strikes in major economic areas. For example, strikes are prohibited in organisations directly involved in provision of life supporting services (power/heat/water supply; air/railway/water transport; communications, etc.) to the population; or should such strike jeorpardise the country’s defense, state security, life and health of the population. Due to such statutory restrictions, the Russian dispatchers’ trade union never obtained a permission to any industrial action and had to go on a hunger strike in April 2010, which, according to mass media, was joined by air dispatchers of more than 20 cities and towns. The Russian law provides no legal treatment whatsoever of hunger strikes; yet, traditionally, it has served as effective bargaining means in Russia.
Neither does the Russian law stipulate support strikes by Russian trade unions of foreign trade unions formed in multinational companies or participation in joint events. A trade union of a company operating on the Russian territory constitutes a separate independent person subject to the Russian law only, and industrial action may be initiated by it only on the grounds envisaged in the Russian labour law (the list of such grounds is quite limited). Therefore, under the Russian law, Russian trade unions may not suspend work in support of action undertaken by foreign multinational companies, although, with regard to strikes initiated by trade unions (trade union associations), the participation decision may be taken by employees bypassing reconciliatory procedures. In other words, the Russian law does provide for rendering employee support to other trade unions within one and the same industry.
Therefore, if the employer is aware of the reasons for unionisation, he can introduce preventive policies, communication schemes, follow the payment requirements in order to maintain the employer-employee balance of interests. And such an employer-trade union interaction, just like any other corporate process, may be developing quite successfully, provided adequate management and planning. Success to this business process largely depends on a comprehensive approach and day-to-day effort of the corporate management in the administrative, legal and financial areas.
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