The Federal IT Industry Agreement 2018-2020

The new rules have been introduced by the Russian Ministry of Labor in a new Federal Industry Agreement, a sector-specific regulatory act that establishes general terms for employee salaries, guarantees and benefits in a given industry sector. These agreements, which are negotiated between trade unions and the Ministry, are binding upon all companies in that sector. Under the Russian Labor Code, a company may opt out by providing a reasoned, written refusal to the Ministry of Labor within thirty days of the agreement's enactment.

On 22 February 2018 the Ministry of Labor announced the new Federal Industry Agreement for the IT sector* on its website, and published an offer to join the agreement in the Rossiiskaya Gazeta newspaper. This means that IT companies have until 23 March inclusive to opt out. Companies that do not opt out of the agreement will automatically accede to it.

* official name: The Federal Industry Agreement for the Communication and Information Technologies Sector 2018-2020

What the new regulations say

The Federal IT Industry Agreement 2018-2020 provides a number of significant guarantees to employees in addition to those provided by labor law. In particular, companies are obliged to:

  • index employees' salaries on an annual basis;
  • comply with specific criteria for mass dismissals (the simultaneous reduction of more than 5% of the total number of employees within 90 calendar days);
  • provide a number of other guarantees that are not envisaged in the Labor Code or other normative legal acts.

Trade unions are given additional rights under the Agreement, including:

  • companies should provide information on economic and social labor issues for collective bargaining at the request of the trade union's elected bodies.
  • companies are obliged to allocate not less than 0.3% of payroll to trade unions to fund cultural events and fitness, health and recreation activities.

The Agreement also includes a number of other guarantees that companies choose to offer their employees, taking their financial and production capabilities into consideration.

Recommended actions

Companies that do not wish to join the new agreement for 2018-2020 should submit reasoned refusals as soon as possible. Records of consultations with the elected body of the primary trade union must be included with such refusals. The Ministry of Labor can require a company and the relevant union representatives to attend further consultations in the event of such a refusal

This Legal Alert is issued to inform Baker McKenzie clients and other interested parties of legal developments that may affect or otherwise be of interest to them. The comments above do not constitute legal or other advice and should not be regarded as a substitute for specific advice in individual cases.

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