‘Capitalist’ labour laws come to Russia

BBC News, Friday 1 February 2002, 14:42 GMT

For millions of Russian workers and employers, the market economy has finally become a reality, with new labour laws having come into force.

During the past decade Russia reformed itself, privatised its economy, introduced markets, banks, loans and shares, but still had an employment law dating back to 1971, when the state guaranteed work but virtually banned all protests.

The labour code was considered by the government and the president as a cornerstone in the current wave of economic and institutional reforms.

Last December, though, parliament passed new legislation, praised by Western experts as making labour markets much more flexible.

But independent unions say the law is favouring employers, reduce the role of unions and limits the right of workers to strike.


The code eases existing restrictions on private companies hiring and firing employees, but it also sets in stone a 40-hour working week and grants workers 28 days of annual holiday.

It also favours fixed short-term contracts, an exception rather than a rule in Russia, which gives more flexibility to employers, but enrages the unions.

The law forces employers to accept collective bargaining, which is a rather rare practice currently in Russia. This would raise the role of in-hose unions, making small independent unions all-but redundant.

Wage arrears

The new law also tries to tackle one of the biggest problems of the country—wage arrears.

The crisis of arrears was a permanent fixture for most of the years of transition, making headlines with stories about workers not getting their salary for half a year or more, or being paid in a form of barter with pans, spades, matches or, as in one infamous case, coffins.

Although the situation has improved recently, wage arrears still occur throughout the country.

According to the new law, workers have a right to lay down their tools if they are not being paid for more than 15 days.

They don’t need any trade union approval for that and can not be fired for such strike action.

Above subsistence level

The law also obliges employers to set wages above the official subsistence level, currently set at $55 a month, but thought to be increased as the country moves closer to joining the World Trade Organisation.

This part of the law has provoked fierce criticism especially from the agricultural lobby, who claims that this could push the industry to the brink of bankruptcy.

But the law also sets some rather strict conditions on launching a strike, making it nearly impossible.

And state-owned companies, which still employ more than 80% of all the country's work force, are protected from strikes even better than their private competitors.

“It's not a labour code, it's a slavery code,” said an official from one of the country's independent unions.

According to Oleg Shein, a radical deputy, the law has “scrapped the right to strike”.

Yuri Levada, a Russian sociologist, however points out, that most Russian workers are currrently not eager to protest in the first place as good jobs are still scarce.

Business pleased

Most business people welcome the law, but say that too many compromises were made.

“It's a step forward, but a compromise nonetheless,” said Sergei Gorkov of the Yukos oil company.

The law has some gaps and ambiguities, but it is by far more straightforward than the updated version of the original Soviet code.

Analysts say that, compared to some West European countries, Russia now has very flexible labour laws, closer to those in Britain than Sweden or France.