Prepared by M. Shcherbatiuk, Ukrainian Helsinki Human Rights Union, featuring Olha Shevchuk-Klyuzheva.

During the year 2015 there was a serious discussion about the draft of a new Labor Code, which was adopted on November 5, 2015 by Verkhovna Rada in the first reading (registration No.1658).

Despite some positive changes regarding increase of the annual leave from 24 to 28 calendar days, increase of additional benefit for working night shifts and overtime the analysis of provisions of the Labor Code draft conducted by the community organization “Labor initiatives” with the participation of trade union partners revealed the main problems that might have negative consequences regarding observance of labor rights.[1]

During 2014 and the first half of 2015 the labor market experienced reduction of the number of vacancies and the number of people dealing with business activity, increase of unemployment level among the economically active population aged 15-70. The average number of regular employees in companies, institutions and organization in March 2015 reduced comparing to the same period in 2014 by 18% (by 1.8 mln. people) and equals to 8.1 mln. people.

As of September 1, 2015 the number of registered unemployed was 414.7 thous. people. However, the number of people registered in the State Employment Service does not reflect the real situation of unemployment in the country, but only shows the number of people seeking for work in the state authorities. This number is also called “the level of recorded unemployment”.

Meanwhile the State Statistics Service uses the concept of the International Labor Organisation (ILO), according to which the level of unemployment “is determined in per cent as a correlation of the number of unemployed aged 15-70 and the economically active population of the similar age”.

According to the State Employment Service of Ukraine, the level of unemployment among people aged 15-70 is determined by means of ILO concept. In the first quarter of 2015 it is 9.6 (as a comparison, in 2014 – 9.3%, in 2013 – 7.3%)^[2]. One of the prevailing reasons of this is release due to economic reasons – above 40%^[3].

Besides, there was an increased number of people informed by their employers about planned dismissal – during January-September 2015 employers informed the State Employment Service about planned collective dismissal of 355,3 thous. employees, the number of which is twice bigger than in the same period of 2014^[4].

According to statistics of the State Employment Service, as of the beginning of AR of Crimea occupation and conducting ATO 60.3 thous. residents of AR of Crimea, Donetsk and Luhansk regions were seeking for employment, in particular, 48.8 thous. citizens, who received a registration certificate according to the Order of the Cabinet of Ministers of Ukraine dd.01.10.2014 No.509. The State Employment Service helped 16.3 thous. of such people find work, in particular, 13.0 thous. people with the corresponding certificate^[5].

On July 08, 2015 the government approved the Order determining the main directions for solving employment problems of IDP as of 2015-2016 together with the Action plan focused on its realization. However, it is still early to talk about any results.

Another problem was that the budget deficit of the Unemployment Fund of Ukraine for the following year is 5.2 bln. UAH. Thus, this is the first time when the unemployment insurance is financially incapable to compensate problems unemployed can get into.[6]

Solving difficult issues regarding employment requires the state to use a complex approach, which would provide creation of economic and financial conditions, in particular, investing for creation of new or adaptation of existing workplaces, as well as conditions for professional training, further training or professional improvement. In reality, the situation with investments during this year didn’t give reason to talk about increase of the number of workplaces. Other economic factors didn’t become more favorable as well. One cannot say that the state system of employment assurance became much more effective than it used to be. This resulted to the fact that this year the situation in the sphere of employment assurance remained problematic.

According to experts’ estimates, a percent of poor Ukrainian among the employed is constantly growing during the last years:

• in 2013 it was 20%;
• during 2014 as a result of implementation of extremely severe measures for budget saving the level of poverty in Ukraine became 1.5 times bigger and reached the point 30%;
• in 2015 increase in prices and tariffs causes extension of poverty at least twice.[7]

In 2015 there was a serious reduction of actual wage received by people in Ukraine.

The vast majority of poor employed is people working in public sector. Indeed, the amount of basic tariff category of the unified tariff net (UTN) used for calculating wage for this category of employees is 30% less than the amount of minimum wage and equals to 1012 UAH. In particular, director of social programs of Razumkov Center L.Shangina points out that due to the long-term authority policy since December 2013, when wage increase was stopped in the public sector, the most qualified and intelligent part of the society – doctors, teacher and scientists turned out to be beyond the poverty.

In reality, the situation is more difficult, as official salaries and pensions based on artificially reduced subsistence minimum wage give false ideas about the drop in the living standards. This fact provides a doubtful characteristic of poverty among working population as well and distorts the results of the Millennium Development Goals performed by Ukraine for the purposes of struggling with poverty, reduction of inequality and increase of the living standards of Ukrainians.

According to calculations based on the formula agreed by the parties of employers and trade unions, the actual amount of the subsistence minimum wage for the employed based on the prices of August 2015 was adjusted by the amount of obligatory payments and was supposed to be 3135 UAH. Thus, the minimum wage approved by the State Budget of Ukraine for 2015 in August was only 38.9% of the minimum allowed needs of an employee.[8]

A sociological research of the Federation of Trade Unions of Ukraine stated that over 51% of employed Ukrainians receive a wage, which is lower than the subsistence minimum wage of 1330 UAH.

A big part of employees work without concluding labor contracts. Thus, according to statistics, every third Ukrainian works illegally. As a result, 200 bln. UAH of wage are paid unofficially annually. Among them 30 bln. UAH don’t go to the Budget of Ukraine and 70 bln. UAH – to the Pension Fund.

In order to reduce shady employment on December 29, 2014 Verkhovna Rada adopted a law on reforming of the obligatory state social insurance and legalization of the wage fund, which provide reduction of applicable unified social tax rates in the amount of up to 2.5 times since 2015.  However, these changes haven’t had any significant influence on reduction of shady employment yet.

The problem of non-payment of wages became even more serious. Nowadays, 300000 Ukrainians have the common issue regarding debts. They are constantly growing and as of September 2015 they were 2004.2 mln. UAH (excluding the part spend on ATO).[9]

As an example of late payment of salaries one can name violation of labor rights of people working in PJSC “Lviv Coal Company”, who don’t get salaries since April 2015, so since September 30, 2015 they stopped working. The similar situation happened with miners of the mine No.1 “Novovolynska”, who had been received salaries for three months for the total amount of 14.5 mln. UAH. As a result, they started an ongoing strike.[10]

This problem was also confirmed by the fact that most addresses to offices of Ukrainian Helsinki Human Rights Union and lawyers of the Community Organisation “Labor Initiatives” in the sphere of labor rights are related to debts. In these addresses, for example, employees of state mines inform of mass backdated salaries. As for the private sector, employers don’t give the full redundancy payment or detain wage. As a result, employees have to quit. Only a small part of such employees adjudicate their rights for remuneration of labor.

It became even harder to control compliance with the norms of labor legislation in the sector of industry due to moratorium for scheduled inspections on employees’ compliance with the requirements of legislative and regulatory acts for occupational safety conducted by the The State Service of Mining Supervision and Industrial Safety. According to statistics, with the advent of moratorium the number of injuries has increased and fatal cases became more frequent.^[11]

It is very difficult to control the state participation in elimination of the main problems in the sphere of occupational safety in the present socioeconomic and political situation. Most actions of the state in the sphere of occupational safety are limited to investigation of labor crimes, but not to their prevention.

For the last six month the Ministry of Social Policy has been working on reforms of this system of social insurance. Ministry of Social Policy was assigned to perform reorganization of the Short-Term Disability Insurance Fund and Social Insurance Fund from Occupational Accidents and Diseases of Ukraine into one – Social Insurance Fund by July 01, 2015. The idea of such draft was to optimize operation of funds. Verkhovna Rada adopted a draft law No.2775 dd. 05.05.2015, which provided the procedure of their reorganization, and in November 2015 this law was signed by the President. According to calculations, such amalgamation will make it possible to reduce administrative expenses of funds by 600 thous. UAH. Experts point out that such reform would have positive developments in the sphere of social policy.

 

Protection of rights of trade unions

According to the global index of the International Trade Union Confederation, Ukraine belongs to the 5^th category, i. e. countries with no guarantees of the rights of trade unions. A significant problem trade unions face nowadays is discrimination and pressure on trade unionists. Annually there are violations of the rights of trade unions and their amalgamations concerning provision of employment of population, and problems related to having a dialog and social protest, including rights to strike.

Guarantees of protection of rights of trade unions and trade-union officials specified in the legislation sometimes don’t work in reality and it is important to provide protection of trade-union officials to make them carry out their activities. This conclusion can be made based on the analysis of compliance with the rights of trade unions of Ukraine, performed by the Ukrainian Helsinki Human Rights Union in 2015.[12]

According to the Federation of Trade Unions of Ukraine, most common examples of violation of the right of trade unions are: interference with the statutory activity of trade union organizations; resistance of employers to pay trade union fees; harassment of activists; access restriction of trade union labor inspectors to workplaces of employees; restriction of rights to membership in trade unions and strike.

Confederation of Free Trade Unions of Ukraine (CFTUU) also notes a great deal of violations of the rights of trade unions. In particular, there are examples of the trade union “Vindication of justice” of the PJSC “National depository of Ukraine”, the head of which, N.Skalska mentions in her address to CFTUU that the administration discriminates and oppresses members of the trade union by its actions. She has also pointed out that the management of PJSC “National depository” represented by the Chairman of the Management Board H.M.Zhurov makes every effort to discredit the trade union, doesn’t recognize its legal rights, interferes with the trade union activity. Later the chairman and other members of the trade union were dismissed and now they are maintaining their rights in a judicial proceeding.

Besides, CFTUU was also under pressure along with the National Trade Union of Miners of Ukraine (NTUMU). NTUMU was illegally put pressure by power structures. On June 11, 2015 NTUMU received a letter from the Security Service of Ukraine, which said about the pretrial investigation in the criminal proceeding against the fact of financing protest actions by representatives of private coal mining companies of Ukraine in Kyiv on April 22-24, 2015, suggesting possible criminal offense under p.2 of art. 110 of the Criminal code of Ukraine (Violation of foreign territorial supremacy and integrity of Ukraine). However, at the time of protest actions trade unions only asked to save their workplaces, receive salaries in full and on time, control compliance with norms of security and occupational safety.

The Chairman of NTUMU, chairmen of the territorial local organization of NTUMU  of the city of Lysychansk, territorial local organization of NTUMU  of the city of Novovolynsk were summoned for questioning to the Security Service of Ukraine, where they were put pressure, held inside for a long time and forced to answer hundreds of questions.

CFTUU and NTUMU considered such government action as violation of rights and illegal pressure on trade unions. Based on art.12 of the Law of Ukraine “On Trade Unions, their Rights and Activity Guarantee”, according to which trade unions are independent from state authorities and self-governing authorities, employers, other community organizations, political parties in their activity, as well as they are not accountable and subordinated to them.

Information about dismissal of this proceeding was received in September 2015.

The Law of Ukraine “On State Registration of Legal Entities, Individual Entrepreneurs and Public organizations” was adopted on November 26, 2015. It caused many objections on the part of trade unions. According to the law, trade unions will have to undergo the system of state registration in order to carry out their activities, by getting a permit from governmental authorities instead of informing about it, as it is common nowadays. This is the violation of article 2 of ILO Convention No.87 “On freedom of association and protection of rights to organization”, according to which employees “.. have a right to establish organizations in their sole discretion without the preliminary permit, and enter such organizations”.

Additionally, it should be mentioned that the present draft variant of the Labor Code significantly narrows the sphere of influence of trade unions. Consent of the trade union amalgamation to dismissal of an employee is required only in case of his redundancy, inappropriate health condition and insufficient qualifications, which is confirmed by the result of appraisal. In other cases provided by articles 92-97 (including appropriate performance of employment duties, absence from work due to temporary disability, inconformity to position etc), consent of a trade union is not required.

There is still a problem of strike provision, in particular, in spheres, where violations of employees are one of the biggest – in transport sphere and housing and utility services. Up to this day there is a conflict of law between the Law of Ukraine “On transport” and legislation on resolution of collective labor disputes.

On October 02, 2014 the European Court of Human Rights made a decision about the case of former employees of “Aerosvit” (“Tymoshenko and others v. Ukraine”), where the court found the court injunction to strike a violation of article 11 of the Convention[13].

 

Recommendations

1) Increase the amount of unemployment benefit to the amount of subsistence minimum wage, and make necessary changes to legislation, which would determine guarantees for receipt of such benefit at this level

2) Reduce unemployment, first of all, among most vulnerable population categories, for example, youth, people of preretirement age, disabled people, internally displaced persons, demobilize people

3)   Increase the wage share in GDP and product costs.

4) Harmonize the minimum wage according to the requirements of the European Social Charter and introduce an effective mechanism of income indexing.

5) Provide effective implementation and differentiation of remuneration of labor in the public sector by using the unified tariff net, eliminate the practice of fixing position salary (tariff rate) of an employee of the I tariff category in the amount lower than the one established by the law on remuneration of labor.

6) Take measures to improve remuneration of labor in the governmental authorities in order to improve social security of ordinary employees,eliminate the system of hidden wage, established by different bonuses and additional payments, which mostly depend on loyalty to the management rather than productive efficiency.

7) Reduce backdated wages to employees of the public sector, and take measures focused on reduction of debts in companies and organizations of all forms of ownership.

8) Improve the system of labor safety in order to reduce workplace injuries and occupational diseases, also by means of legislation improvement in this sphere, and implementation of prevention programs.

9) Improve control over compliance with standards and requirements in the sphere of occupational safety; provide fast and effective investigation of injuries.

10) Improve state control over observance of labor rights, creation of effective mechanisms of response to such violations.

11) Conclude bilateral agreements in the sphere of employment and social security of employees-migrants with countries where a lot of our fellow citizens are working nowadays without any such agreements.

12) Ratify necessary international documents that intensify protection of employees-migrants in the sphere of employment and social security.

13) Provide strict observance of rights of trade unions, assist in formation of strong independent trade union movement.

 

 

 

[1] New Labor Code: brief review of provisions http://trudovi.org/novij-trudovij-kodeks-korotkij-oglyad-polozhen/#more-485

[2] Economic activity of population, statistical and graphic materials (14 – 26)  – State Employment Service, updated on 09.07.2015 – http://www.dcz.gov.ua/statdatacatalog/document?id=350799

[3] Economic activity of population, Analytical note – State Employment Service, updated on 09.07.2015  – http://www.dcz.gov.ua/statdatacatalog/document?id=350796

[4] Main tendencies at the labor market – http://www.dcz.gov.ua/statdatacatalog/document?id=350794

[5] On provision of services by the employment service to internally displaced persons as of 06.11.2015 – http://www.dcz.gov.ua/statdatacatalog/document?id=351058

[6] http://www.fpsu.org.ua/napryamki-diyalnosti/sotsialnij-dialog/8282-pozitsiya-profspilok-problemi-zajnyatosti-ta-sotsialnogo-strakhuvannya-treba-virishuvati-shlyakhom-dialogu-sotsialnikh-partneriv

[7] PROVIDE AN ADEQUATE STANDARD OF LIVING http://www.psv.org.ua/arts/Spetcvipusk/view-2837.html

[8] Provide an adequate standard of living: http://www.psv.org.ua/arts/Spetcvipusk/view-2837.html

[9] https://ukrstat.org/uk/operativ/operativ2015/gdn/prc_rik/prc_rik_u/dsz_u_U.html

[10] Independent trade unions required decent work http://kvpu.org.ua/uk/news/6/761-nezalezhni-profspilky-vymahaly-hidnoi-pratsi

[11] http://ohoronapraci.kiev.ua/gurtom-i-batka/

[12] http://www.fpsu.org.ua/napryamki-diyalnosti/okhorona-pratsi-i-zdorov-ya/8074-problemi-dotrimannya-prav-profspilok-v-poli-zoru-ukrajinskikh-pravozakhisnikh-organizatsij

[13] http://hudoc.echr.coe.int/webservices/content/pdf/001-146671?TID=qfendxlsmm.