Observation (CEACR) - adoptée 2001, publiée 90ème session CIT (2002)

Convention (n° 95) sur la protection du salaire, 1949 - Fédération de Russie (Ratification: 1961)

The Committee notes the information supplied by the Government in its reports and the attached documents. The Committee notes, in particular, that the Government has still to respond specifically to several observations made by workers’ organizations and noted in the Committee’s previous observations.

The present situation with respect to wage debts and delayed payment

According to the latest figures communicated by the Government, the total wage arrears as at 1 January 2000 amounted to 43,741 million roubles, which represents a decrease of 33 per cent compared to the same date in the previous year. As at 1 April 2000, the total amount of wage arrears stood at 39,879 million roubles, and thus dropped by 3,686 million roubles, or 8.5 per cent, since 1 March 2000. During the month of April 2000 wage arrears were reduced by another 3 per cent and amounted to 38,674 million roubles. The Government indicates that the situation improved in 85 constituent Territories. In the social sector organizations, in particular, the wage arrears due to insufficient funding from the federal budget were reduced in 31 regions while those due to insufficient funding from the regional budgets in 80 regions. Out of the total volume of the arrears caused by insufficient funding from the federal budget into the sector of "science and scientific service" over 80 per cent amounts to the share of establishments at Moscow, Moskovkaya Oblast, St. Petersburg, Sverdlovsk Oblast, Voronezh Oblast, Penza Oblast and Krasnoyarsk Krai. Moreover, the Committee notes that according to the information supplied by the Government, wage arrears still persist in specific sectors, notably in industry (16,107 million), agriculture (7,742 million), construction (5,133 million), public utilities (2,795 million) and transport (2,304 million). The Committee requests the Government, in the first place, to make every effort to redress the situation with respect to state organizations funded through either federal or regional budgets. It also asks the Government to continue to closely follow the evolution of the situation as to the advancement of the settlement of outstanding wage debts and report regularly on any future developments in this regard.

Reinforcement of the state labour inspection

The Committee notes that the bodies of the Federal Labour Inspectorate, the Prosecutor’s Offices, the Taxation Police, the Taxation Inspection, the financial and labour bodies continued to coordinate the work of monitoring the delays in the payment of wages and the targeted use of budgetary funds allocated to such purposes. The Committee notes that under Government Order No. 1035 of 9 September 1999, the various agencies of the Ministry of Labour and the Federal Labour Inspectorate (including the territorial bodies) were united, and that a new Department of State Supervision and Monitoring of the Implementation of Labour and Safety and Health Legislation was set up within the Ministry of Labour and Social Development.

The Government indicates that in the course of 1999, state labour inspectors inspected over 49,000 enterprises throughout the country. As a result, over 32,000 warrants were issued and wage arrears totalling 10.5 billion roubles were settled. Over 6,000 enterprise managers and other officials were fined by the state labour inspection for the total sum of 3.7 million roubles while disciplinary procedures were initiated against 514 managers and other officials. From 1 January to 15 April 2000, the labour inspection services carried out over 10,000 inspections resulting in some 6,600 warrants and more than 1 billion roubles worth of wage arrears paid out. Fines were imposed against 1,888 managers and other officials for the total sum of 1.08 million roubles.

The Committee notes with concern, however, the Government’s statement that while the measures taken by the labour inspection services helped to restore the protection in practice of workers’ labour rights, mass violations of those rights continue to be one of the main sources of the ongoing social and economic stress of the country. The Government further affirms that in most regions there are still delays in the payment of wages and that inappropriate use of budget resources has become widespread. In many cases, plant managers facing large sums of arrears of wages and social benefits choose to use money to provide loans or to pay fuel and oil bills, services or mission expenses.

In particular, the Committee notes the detailed account contained in the Government’s report on individual cases detected by the state labour inspection of misuse of funds allocated to pay workers’ wages. In one of the most striking cases, for instance, inspection revealed that while the unpaid wages of some 3,000 employees of an enterprise amounted to 9.1 million roubles, including arrears of 138 dismissed employees for the sum of 620,000 roubles, the management of the enterprise used the wage funds for other purposes such as the repair of the apartment of the security chief, the purchase of furniture, the refurbishment of administrative buildings, the construction of a country-house and the financing of a football team.

In addition, the Committee notes the information provided by the Government on inspection results regarding the coal industry and educational establishments. With respect to selective inspections carried out in all coalmining regions of the country regarding the observance of wage protection legislation, the Government indicates that, on the whole, no cases of untargeted use or spending were observed but that in some enterprises the wage arrears increased. The Committee notes, however, that on at least one occasion, the administration of a coalmining company sought to reduce the amount of wage arrears by issuing promissory notes for the sum of 750,000 roubles. The Committee wishes to stress that such practices openly contravene the provision of Article 3(1) of the Convention which prohibits the payment of wages in the form of coupons, vouchers or in any other form alleged to represent legal tender. The Committee hopes that the Government will make every effort to reinforce labour inspections in this field and will take the necessary measures, as appropriate, to put an end to such practices (see also under "Other provisions of the Convention" below).

Regarding educational establishments, the Government states that numerous inspections showed that, in general, financial resources allocated to wage payment were used according to their purpose. The wage arrears of the educational employees were reduced by 47 per cent in 1999 and additionally by 30.6 per cent from January to April 2000. As at 1 May 2000, the outstanding wage debts to educational employees amounted to 628 million roubles.

Legislative developments and court decisions

The Committee notes the Government’s reference to recent legislative changes, including the adoption of Act No. 48-FZ of 15 March 1999 supplementing the Penal Code with new section 145-1, the adoption of Government Order No. 1035 of 9 September 1999 respecting state supervision and monitoring of compliance with national labour and safety and health legislation, and the continued examination of the federal Bill to amend and supplement the Labour Code and of the federal Bill to supplement section 855 of the Civil Code on settling wage claims as privileged debts. It also notes that the Government at its session of 29 June 1999 adopted a wage arrears payment schedule for the different regions, and decided to monitor its implementation.

With relation to judicial settlement of wage claims, the Government indicates that according to available statistics the number of civil court cases referring to the repayment of wage debts is growing. In 1996, 20.7 per cent of all civil court cases heard in Russian courts concerned the payment of wage arrears. The corresponding figure for 1997 was 31.9 per cent, while in 1998 it stood at 27.5 per cent. In terms of the actual number of wage claims examined by the courts, in 1999 some 765,520 court decisions were delivered concerning suits on labour remuneration.

The Committee notes this information but insists on the need for strict application of effective sanctions to punish and prevent infringements of the labour legislation on wage protection. In this connection, the Committee is surprised to note that since the adoption of Act No. 48-FZ of 15 March 1999 by which a new section 145-1 was inserted into the Penal Code concerning liability for failure to pay wages, there have been no court decisions under this new provision. Recalling that as the Government mentions in its report, inspection continues to reveal widespread abuses and cases of embezzlement and corruption with respect to wage funds, the Committee urges the Government to sustain its intensified efforts to ensure that sanctions and redress for injury are properly enforced.

While noting all the different measures and positive developments described in the Government’s reports, the Committee would still like to note that the problem of wage arrears continues to defy immediate solution. The Committee cannot but emphasize once again the need for continued concerted action and strong commitment in addressing the three main parameters of the problem, namely effective assessment of the situation, application of dissuasive sanctions, and appropriate compensation to workers for the loss suffered. The Committee therefore urges the Government to take all necessary measures to ensure the rapid settlement of outstanding wage debts and to provide up-to-date information on inspection results, the number and nature of infringements observed, the administrative and penal sanctions imposed, as well as any relevant court decisions and the total sums of wage arrears effectively paid out through judicial means.

Other provisions of the Convention

The Committee notes the information supplied by the Government on existing legislation giving effect to the provisions of the Convention as well as on the draft Labour Code which was approved by the State Duma on 27 October 1999. In particular, the Committee notes that with regard to Articles 3 and 4 of the Convention, the Government and legislative bodies are considering the possibility of including new provisions in the draft Labour Code to bring the national legislation into closer conformity with the requirements of the Convention, for instance, by expressly prohibiting wage payment in the form of promissory notes, vouchers or coupons, also prohibiting the payment of wages in the form of alcoholic beverages, narcotic, toxic or harmful substances, weapons or other such articles, and laying down specific conditions to ensure that allowances in kind are beneficial to the worker and his family and fairly valued. The Committee hopes that favourable consideration will be given to the above proposals and that sections 128 (basic state guarantees in labour remuneration) and 129 (forms of labour payment) of the draft new Labour Code will be revised accordingly.

Moreover, the Committee notes that the Government also plans to introduce a new section to the Labour Code regulating the operation of works stores in accordance with Article 7 of the Convention even though there still exist a very small number of undertakings with stores and services of this kind and there would appear to be no individual or collective complaints concerning the use of such stores. With respect to the preferential treatment of workers’ wage claims in the event of bankruptcy or judicial liquidation of an enterprise (Article 11), the Committee notes that under section 855 of the Civil Code wage claims are granted a second-rank privilege without any restriction as to the periods or amounts involved, and that it is intended to reaffirm such priority in the draft new Labour Code under consideration. It also notes the Bill to supplement section 855 of the Civil Code, which was approved by the State Duma on 16 June 1999, and which provides that when funds are paid into an account for the purpose of paying wages to persons employed under an employment contact, any payment from the account shall be effected irrespective of the priority order established by law. Finally, concerning the payment of wages at regular intervals (Article 12(1)), the Committee notes the new section 234 of the draft Labour Code which provides that in the event of failure to comply with established terms for the payment of wages, the employer shall be obliged to pay them with interest charged in the amount of no less than 1/300 of the existing rate of the Central Bank for every day of the delay, starting from the day following the end of the normal statutory period allowed for the payment of wages in question until the day payment is actually made. The Committee requests the Government to continue to provide information on the process of finalizing the text of the new Labour Code and transmit a copy of the new legislation once it is adopted.

[The Government is asked to report in detail in 2002.]