The range of employers covered by the Federal Industry Agreement for the Oil and Gas Sector has been extended to include companies - members of certain employers' associations and other non-profit institutions.

This was done on 17 July 2018 when the Russian Ministry of Labor published the Addendum to the Federal Industrial Agreement for the Oil and Gas Sector for 2014-2016 (extended until 31 December 2019). Both the addendum and agreement are sector-specific collective documents that impose additional significant obligations on employers to provide employees with various benefits and guarantees as compared to the RF Labour Code.

According to the terms of the Addendum, the Agreement now applies to a wider range of employers and includes those that are members of employers' associations and other non-profit institutions of the All-Russian Industry Association of Employers of the Oil and Gas Sector (link).

Companies that wish to opt out of the Addendum must submit their reasoned refusal to the Ministry by 17 August 2018 inclusive. Otherwise, the Addendum and the Agreement will become mandatory for all relevant employers.

Provisions of the Agreement

The Agreement provides a number of significant additional guarantees to workers in the oil and gas sector over and above those provided by the Labor Code. In particular, companies are obliged to:

  • pay an additional 40% of the wage rate (base salary) for each hour of night work (current legislation provides an additional 20%)
  • pay a one-off compensation for injury caused by accidents at work or occupational diseases of up to 350 times the minimum wage
  • make additional payments to employees in connection with retirement, vacation, birth of a child, etc.
  • pay a surcharge on maternity allowances and sick leave allowances
  • provide employees with additional paid days off for family reasons
  • ensure financial support for children’s recreational holidays, and pay for children’ vouchers to attend recreational camps
  • implement voluntary insurance of employees (pension, medical), depending on the company’s financial situation
  • carry out youth work, including providing welfare assistance to young employees and, depending on the company’s financial situation, provide loans and grants for purchasing housing
  • follow special criteria in the event of mass dismissals.

Trade unions are given the following additional rights under the Agreement:

  • the opinions of trade unions should be considered by companies when approving all internal policies
  • companies are obliged to allocate not less than 0.3% of payroll to trade unions to fund cultural- and health-related work
  • companies are obliged to consult trade unions in the event of any reorganization.

The Addendum also clarifies the mechanism under which employers may suspend individual provisions of the Agreement without refusing to implement the Agreement as a whole. At the same time, such employers must comply with established procedure, and must obtain the consent of the Ministry of Labor.

Actions to consider

Companies that do not wish to join the Addendum should submit their reasoned refusals as soon as possible, together with records of consultations with the elected body of the primary trade union. The Ministry of Labor may require such companies and the relevant union representatives to attend further consultations.

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