Observation (CEACR) - adopted 1997, published 86th ILC session (1998)

Protection of Wages Convention, 1949 (No. 95) - Ukraine (Ratification: 1961)

Further to its previous observation concerning the application of Article 12(1) of the Convention (regular payment of wages), the Committee notes the Government's detailed report and other communications, the information supplied by the Government to the Conference Committee on the Application of Standards in June 1997 and the discussions which took place in that Committee.

Comments made by workers' organizations

The Committee also notes the comments received from various workers' organizations on the non-payment or delayed payment of wages: the Central Committee of the Ukrainian Trade Union of Educational and Science Employees noted, in a comment received during the Committee's previous session, that their appeals, protests and negotiations with the Government had not led to any positive results; the Central Trade Union Committee of Geology, Geodesy and Cartography Workers of Ukraine states in their comment received in April 1997 that the Government's debt to the workers of the sector has grown to 25.8 million grivnyas (13.5 million US dollars); the Crimean Republican Trade Union Committee of Health Care Workers of Ukraine indicates in the comment received in April 1997 that no wages have been paid for more than five months; and the Kharkov Committee of the Trade Union of the National Academy of Science observes in the communication dated 9 July 1997 that the situation of non-payment of wages to the state employees of the National Academy of Science institutions has not improved, that the debts of the Government to the institutions of Kharkov are equal to wages for about six months, and that the debt repayment for 1996 arranged between the Government and trade unions to be started in May 1997 did not even begin as scheduled.

Measures taken by the Government

The Government transmitted several communications in response. In the communication received in June 1997, the Government indicates the conclusion of a protocol with sectoral trade union federations on 4 April 1997 (signed namely by the president of the Trade Union Federation of Ukraine, and the Chairman of the Ukrainian Committee of the Trade Union of Employees of the National Academy of Science) on the issue of ensuring the prompt payment of wages, payment of wage arrears, giving priority to wage payment, enforcing control over the compliance with the labour legislation. According to the Government, it has taken various measures in accordance with this agreement.

The Government notes in the communication dated 22 August 1997, that the Cabinet of Ministers of Ukraine adopted a comprehensive Resolution No. 879 on 13 August 1997, which envisages the complete (100 per cent) financing of current wage payments, the obligatory allocation of at least 75 per cent of the resources of bodies financed by the state budget to the payment of current wages and the settlement of wage debts, and the preparation of a draft legislation regarding the immediate allocation of grants and subsidies from the state budget to the settlement of wage debts.

According to the Government, the General Agreement for 1997/98 was signed on 18 October between the Cabinet of Ministers, Ukrainian Union of Industrialists and Entrepreneurs and the associations of trade unions of Ukraine. The parties to this agreement undertook, among other things, to guarantee effective monitoring of laws and other standards concerning the payment of wages, to approve this year the procedure for the compensation of workers for loss of earnings in connection with the non-observance of the deadlines for their payment, and to guarantee the punctual payment of current wages to workers in organizations dependent on the budget.

Penalties and compensation

At the Conference Committee of June 1997, the Government representative stated that, following a decree of the President of Ukraine, the managers of state enterprises are obliged by virtue of their contract to ensure the timely payment of wages and the strict compliance with the timetable for settling wage debts, and that the failure to fulfil this requirement is considered as sufficient grounds for terminating the manager's contract, which actually happened in several sectors as regards a number of managers. In the letter dated 22 August, the Government indicates that it is working on a draft law on the increase of criminal and administrative responsibility of directors of enterprises and organizations for the inappropriate utilization of funds intended for the payment of wages. In the first half of 1997, the courts of law examined over 36,000 private appeals concerning the non-payment of wages, 28.4 million grivnyas were exacted by court decisions in the workers' favour, and at least another 10,000 cases relating to wage debts are under examination. During the same period, the organs of Procuracy revealed approximately 13,000 violations of labour legislation and over 2,000 directors were charged with administrative responsibility.

As to the supervision, the Government also provides in the same letter detailed information on the activities of the State Labour Inspectorate, which conducted in the first half of 1997, more than 10,000 inspections: 15,623 violations of labour legislation were revealed, about 6,500 injunctions were issued and 12,500 proposals were made to eliminate the violations. The results of such inspection visits are examined by the Government and transmitted to other ministries concerned as necessary.

Information on the latest situation

At the Conference Committee of June 1997, the Government representative stated that, as a result of the measures taken in accordance with the agreement reached with the trade unions, at that moment, current wages were paid regularly and without delay. He added however that the most serious problem remained the settling of debts accumulated in previous years.

More recently, in a letter dated 6 November 1997, the Government notes the following figures: whereas in the first six months of 1997 the wage arrears increased each month in all sectors of the economy, from July to September they steadily decreased, i.e. by 9.5 per cent for the period. In organizations dependent on the state or local budgets, the wage arrears were reduced by 29.3 per cent in July-October. As a result, the total amount of wages owed at the beginning of October had decreased by 45.7 per cent in educational establishments, 32.4 per cent in cultural organizations, 28.7 per cent in the public health sector, and 23.3 per cent in the domain of social security. At the beginning of October 1997, 22 out of 25 provinces of Ukraine were not only ensuring 100 per cent payment of current wages to workers in the budget sphere, but were also paying off wage arrears in respect of last year's wages.

Information on specific sectors

The Government further supplied information in response to some of the comments made by the workers' organizations noted by the Committee. In the communication dated 19 February 1997, the Government refers specifically to the coal industry and states that various measures, including the creation of an interdepartmental commission composed also of trade union representatives to take operational steps for the timely payment of wages and the Government's financial aid to the coal industry, admitting nevertheless that it was not possible to overcome the state of crisis and to pay all the wage debts which remain rather large.

As to the scientific organizations, the Government indicates, in the letter of 6 November, that the wage debts were reduced by 15.4 per cent in the period of July to September, which made possible the full payment of the accumulated wages for the current year.

In a letter dated 18 November 1997, the Government refers to the health care workers in Kerch (Crimean Republic) and supplied the following information: measures taken include the setting up of the timetable for settling wage debts to municipal workers, and the rule that more than 80 per cent of cash coming into the budget should be used for wage payment and the settlement of wage debts; employees of health institutions receive payments through special bank accounts, where at each transfer, the amount paid in respect of 1996 wage arrears is specified; the amount of wage debts owed to health care personnel stood in October 1997 at 2.6 million grivnyas, including 390,000 grivnyas for 1996, and this amount had decreased in the last three months by 20.6 per cent, and in particular those for 1996 had decreased by 49 per cent.

As to the sector of geology, geodesy and cartography, the Government states the following in another letter dated 18 November 1997: state orders for work in this sector (geology and so on) are decreasing, whereas the number of workers is not decreasing in the same proportion; during the period of July-October 1997, the Government transferred to the enterprises of the sector 10 million grivnyas to cover the current debt for work already performed, which permitted the reduction of the period of delay in wage payments by six months. From September 1997, the contracts of directors in the sector include provisions to make them personally responsible for the payment of wages and the settlement of wage debts according to the timetable, the failure of which may cause their dismissal. The State Labour Inspectorate suggested that the State Committee of Geology and the trade union should conclude the sectoral collective agreement for 1997-98, since the provisions of the 1995 agreement are obsolete and would not solve the problem of wage payment.

Conclusions

The Committee notes that the Government has been taking comprehensive measures in all the three principal aspects mentioned in the previous observation: supervision, appropriate penalties to prevent and punish infringements and steps to make good the prejudice suffered. Various other measures are being taken to ensure the regular payment of wages and the settlement of wage arrears, including economic, financial and tax-related measures aiming at the improvement of financial situations of the enterprises and organizations. Social partners are involved especially in the procedures of supervision.

The Committee notes in particular that, according to the Government, the situation has been improving, as a result of all the measures taken, in the period more recent than that referred to in the comments from the workers' organizations mentioned above. It notes however that the Government has supplied more information in percentages than absolute figures, and it is therefore difficult to appreciate the actual size of outstanding debts due to wage earners.

The Committee recalls that the present problem concerns the implementation in practice of the national labour legislation giving effect to the Convention, which requires a continued effort and a wide range of measures. It requests the Government to continue to provide information on all relevant measures taken to ensure the regular payment of wages and a rapid settlement of wage arrears as well as data showing their results. The Committee asks the Government to refer in particular to any progress made regarding the draft law on penalties on the inappropriate use of funds, and the procedures for compensation of workers' loss from the untimely payments, mentioned above. The Committee also asks the Government to include any information on the actual amount outstanding as wage debts.

[The Government is asked to report in detail in 1998.]