Recent developments

On 24 January 2015 the Ministry of Labor and Social Protection of the Russian Federation made a formal proposal to companies operating in the chemical, petrochemical, biotechnological and chemical-pharmaceutical sector to join the agreement on prolongation of the industrial tariff agreement on the Chemical, Petrochemical, Biotechnological and Chemical-pharmaceutical Industry of Russia for 2012–2014 (the “Agreement on Prolongation”) or to opt out by submitting a reasonable written refusal.

According to the Agreement on Prolongation concluded between the Russian Association of Employers “Russian Union of Chemical Plants and Organizations” and the Trade Union of Chemical Industry Workers of the Russian Federation, the industrial tariff agreement on the chemical, petrochemical, biotechnological and chemical-pharmaceutical industry of Russia for 2012–2014 (the “Agreement”) was prolonged until 31 December 2015.

The Agreement will be considered automatically extended to all relevant employers in the event they do not provide a reasonable written refusal to accede to the Agreement on Prolongation to the Ministry of Labor within 30 calendar days of the proposal’s official publication. Please note that 30 calendar days are counted from 4 February 2015 (the proposal’s official publication date), thus the companies are entitled to send a written refusal by 6 March 2015.

What the Agreement says

The Agreement provides a number of significant additional guarantees to employees which surpass the current labor legislation. Among others, companies are obligated:

  • to pay at least an additional 40 percent of the wage rate (salary) for night work (the increase provided by current legislation is 20 percent);

  • to pay at least an additional 20 percent of the wage rate (salary) for evening work;

  • to index the minimum wage rate (salary) at least once per year proportionally to the increase in the cost of living, as set out by the Federal State Statistics Service. The Agreement specifies the procedure and coefficient of such adjustment when conducted once per year or more;

  • to provide employees with additional paid days off for the birth of a child, the employee’s wedding and the weddings of his children, as well as the death of his spouse or family members;

  • to pay guaranteed minimum compensation for injuries caused by accidents at work or occupational diseases in the amounts stipulated by the Agreement;

  • to make additional payments to employees (in connection with retirement, etc.);

  • to pay a surcharge on maternity and child care benefits;

  • to provide the employees with loans for constructing and purchasing housing, valuable assets or to implement together with credit institutions programs on mortgages provision to employees on preferential terms;

  • to provide an employee, who is notified in accordance with the law of his dismissal due to redundancies, with one paid day a week at the employee’s discretion to search for a job;

  • to save for employees dismissed due to redundancies, their turn on the waiting list for upgraded housing conditions, their use of healthcare institutions, and use of preschool institutions for their children;

  • to help acquire permits on sanatorium treatment, recovery and recreation of employees and members of their family (children up to 16 years old);

  • to carry out youth work, including providing welfare assistance to young employees, to set a list of guarantees and preferences granted to the them.

Trade unions are given additional rights under the Agreement:

  • the opinion of the elected trade union should be considered by the employer in setting the list of employees with open-ended working days;

  • companies are obligated to allocate not less than 0.3 percent of the payroll to the trade union to fund cultural and health works;

  • companies are obligated to ensure the participation of the trade union in performing work aimed at improving housing conditions;

  • the opinion of the elected trade union should be considered by the employer in taking decisions on various local acts and collective agreements as specified by the Agreement.

Actions to consider

Companies that do not wish to sign on to the Agreement should start preparing substantiated refusals as soon as possible. Records of consultations with the elected primary trade union must be attached to such refusals.