AFP. 31 January 2002. New Russian labour code to boost business climate.

MOSCOW -- A new Russian labour code broadly favourable to employers
comes into effect on Friday, replacing Soviet-era legislation seen as an
impediment to restructuring the economy.

Independent trade unions, which see their role reduced and their right
to strike limited by the new code, have protested at the bill signed
into law by President Vladimir Putin earlier this month.

The code eases existing restrictions on private companies hiring and
firing employees.

The Russian state is still by far the largest single employer of the
country's 87 million-strong active population.

It also establishes a minimum wage equal to the official subsistence
level, currently set at the equivalent of around 55 dollars (64 euros).

The new code was opposed by the Communist Party and the more combative
independent unions as too business-friendly.

Radical deputy Oleg Shein charged that "the right to strike has been

Referring to the stringent conditions set for calling a strike, he said
the new code "favours employers, and the state, which is also an
employer, has proved to be a lot harsher than any head of a private

The labour code is to be examined again in a year with a view to
amendments, and the independent unions, preparing to rally political
were already anticipating a sharp reaction from the shop floor.

"This is a return to the 19th century," said Sergei Khramov of the
Sotsprof union, created 13 years ago and now claiming 450,000 members.

"When people understand what the new code means, there will be
spontaneous protests," Khramov said.

Others however saw little prospect of wide-spread opposition.

"Fifteen percent of Russians say they are prepared to protest, but the
real figure is a lot lower. Employees are more dependant than ever on
their employers. Particularly in the provinces, people are clinging on
to their jobs," sociologist Yury Levada commented.
Employers have praised the new code but found it less radical than they
would have liked.

"It's a step forward," Sergei Gorkov of the Yukos oil company said.

The labour code is one of a broad package of reforms encompassing the
pension fund system, urban land sales, and tax and social security
regulations introduced over the past 18 months with a view to creating a
more business-friendly legislative framework.

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Barry Stoller

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