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Recent developments

After the signing of a new sectoral tariff agreement for organizations in the chemical, petrochemical, biotechnology and chemical-pharmaceutical industries for 2019-2021 (further - the Agreement) the Ministry of Labor and Social Security of the Russian Federation (further, the Ministry of Labor) has published an announcement that organizations would have to sign up to the Agreement or provide justified reasons for not doing so.

Companies operating in the industries can decline to sign up to the new agreement by submitting a motivated written refusal to the Ministry of Labor before 3 November 2018 inclusively. Otherwise this agreement will become compulsory for the employers.

What the Agreement says

The Agreement imposes additional duties on employers, including the following:

  • to make the basic part of the pay package not less than 65%;
  • to make the additional payment for nighttime or evening shifts not less than 40 and 20 percent of the standard rate (salary) respectively;
  • to establish a one-off benefit payment to employees when retiring;
  • the allocation of financing for purchasing trips for health resort treatment, recuperation and holidays for employees and members of their families (children under 16) ;
  • the provision of additional paid vacation in the following instances:
    • the birth of a child;
    • the marriage of an employee;
    • the marriage of an employee's child;
    • the death of a spouse or family member (children, parents, spouse's parents, brothers and sisters).
  • the provision of loans for the acquisition and construction of living premises and expensive purchases or the introduction of joint programs with credit organizations for providing mortgages to employees on advantageous terms;
  • the provision of additional social benefits to female employees and other persons with family responsibilities, including payment of a one-off benefit at the birth of a child;
  • the provision of additional guarantees and benefits to young employees.

The Agreement contains additional duties for employers that are not envisaged in the current labor legislation, for instance:

  • the duty of the employer to provide elected bodies of the primary (combined) trade union organization with free use of transport, communication, copying and computer facilities and other technical resources;
  • the duty to compensate for the harm caused to employees in connection with injuries at work or occupational diseases in an amount not less than the minimum guaranteed payments established by the Agreement.

Recommendations

Companies that do not wish to sign up to the Agreement must submit a justified refusal as soon as possible. The refusal should have attached a protocol of consultation between the employer and the elected body of the primary trade union organization. In the event of a refusal to sign up the Ministry of Labor reserves the right to invite representatives of the employer and the trade union organization at the employer to conduct consultations.

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