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Financial Times (UK)
5 January 2002
Moscow ushers in reform of labour law
By Andrew Jack
Russia's first significant reform of labour legislation in the post-Soviet era comes into effect this week after being signed into law by President Vladimir Putin on Monday.
The new labour code eases the restrictions on employers wanting to dismiss staff, while obliging them to accept collective bargaining.
It concluded a year of intensive economically liberal legislative reform, including changes to Russia's pension fund system, urban land sales, and tax and social security regulations.
The latest text updates the previous body of labour regulations introduced in 1961, which has seen only minor modifications since and which severely restricted the formal scope of companies to carry out restructuring.
Christopher Granville, an analyst with the Moscow-based brokerage United Financial Group, said: "The old code was part of the workers' paradise of 'you pretend to work and we'll pretend to pay you'. The new version is one of the basic supply-side building blocks which needed to be in place in order to create an ordinary state which obeys the rule of law."
The code imposes tougher requirements for employees seeking to strike. But it also penalises employers who fail to pay wages on time, a frequent complaint in recent years, requiring them to pay penalty interest and allowing employees to stay away from work after more than 15 days' arrears.
The old labour code was in practice less restrictive than it appeared on paper, because it was widely ignored or manipulated in ways that benefited both employers and employees but left them little chance to defend themselves through labour law.
The new code was pushed through against a backdrop of public debate that highlighted the tensions between the old-style state-controlled trade unions and an emerging independent labour movement.
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