Recent developments

On 3 February 2017, the Ministry of Labor and Social Protection of the Russian Federation (Mintrud) published information that an Agreement on Prolonging the Industrial Agreement for the Oil and Gas Industry and Construction of the Oil and Gas Complex of Russia for 2014–2016 for the 2017-2019 period has been signed (the Agreement).

The Agreement applies to companies operating in the oil and gas industry, including oil and gas construction, oil and gas refining, provision of petroleum products, oil and gas chemistry, the oil and gas pipeline transport system, gasification and operation of gas facilities, transportation and sale of liquefied gas, geological exploration of hydrocarbon deposits, refining of petrochemical products, oil and gas engineering, as well as to companies providing transport, scientific, design and other services to such companies if oil and gas are the their main activities.

Under the Russian Labor Code, the companies in the above industries can refuse to join the Agreement by providing a reasoned written refusal to Mintrud before 17 March 2017. Otherwise, the Agreement will be automatically extended to all relevant employers.

Provisions of the Agreement

The Agreement provides a number of significant additional guarantees to employees of the above industries over those in the labor legislation, in particular companies are obliged to:

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

Trade unions are given additional rights under the Agreement, as follows:

  • 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 any reorganization of the employer

Actions to consider

Companies that do not wish to join to the Agreement should submit reasoned refusals as soon as possible. Records of consultations with the elected body of the primary trade union must be attached to such refusals.