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Ukraine could abandon key labour principle as part of EU drive

The government’s post-war reconstruction plans threaten a ‘Mad Max-style dystopia’, says Ukrainian labour lawyer

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Thomas Rowley Serhiy Guz
9 August 2022, 1.42pm
This destroyed flour mill in Chernihiv is one of thousands of companies affected by the Russian invasion
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(c) REUTERS / Alamy Stock Photo. All rights reserved

The Ukrainian government intends to abandon its long-held principle of consulting trade unions and employers’ associations over policy as part of the country’s drive to join the EU, draft plans for post-war reconstruction suggest.

It is backed up by remarks made by a key official to openDemocracy this week.

Outlines released by the National Council for the Recovery of Ukraine from the War, a body set up by president Volodymyr Zelenskyi, state that the Ukrainian government plans to move to a model of “non-interference of the state in dialogue between trade unions and employers”.

The existing system of consulting both unions and employers’ groups is referred to as the ‘social dialogue principle’. It is intended to foster interactions between the two strata in order to achieve a balance of interests in the economy.

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Ukrainian labour lawyer George Sandul told openDemocracy that the “final goal” of the draft reconstruction plan was a “Mad Max-style dystopia” where “everybody will negotiate on their own without any rules”.

“These draft plans clearly state that the Ukrainian government is not interested in the principle of social dialogue at all,” Sandul said, explaining that social dialogue is “at the core” not only of International Labor Organization (ILO) conventions but also, somewhat confusingly, Ukraine’s association agreement with the EU.

The Ukrainian state, Sandul said, had a mixed record on supporting social dialogue before the Russian invasion, and was now “trying to get rid of” its commitments “even on paper”.

The ongoing war has had a profound effect on Ukraine’s economy, with the World Bank predicting that it will contract by 45% this year as a result of Russia’s invasion.

Nearly half of Ukraine’s businesses have stopped or nearly stopped their operations, according to a survey, published in June, by business consultancy Advanter Group. The draft reconstruction plan says that the unemployment rate is estimated to have risen above 30%, and wages across different sectors have fallen by 9% to 58%.

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With millions of people displaced and companies destroyed or barely operating, the balance of power in the Ukrainian labour market is likely to change drastically

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(c) ZUMA Press Inc / Alamy Stock Photo. All rights reserved

International Labor Organization ‘outdated’

The news comes as a leading social policymaker in Ukraine criticised the approach of the ILO as “outdated” on the eve of a planned country visit by the UN agency, which was later cancelled.

The ILO, via its international conventions, promotes legally binding principles of workplace rights and social dialogue for governments, employers and workers around the world.

In an interview published on the Ukrainian parliament’s website on 28 July, Halyna Tretiakova, head of the parliamentary committee on social policy, claimed the ILO was a barrier to Ukrainians striking individual employment agreements and protecting their employment rights through more flexible means.

“People don’t want to negotiate their employment through collective agreements, but through civil law, royalties, author rights,” Tretiakova said.

“But the International Labor Organization, created in 1919, in the epoch of industrialisation, says no… [The ILO says] a person is economically dependent on their employer and should therefore come under Ukraine’s labour code, developed in 1971.”

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Halyna Tretiakova, head of the Ukrainian parliament's committee on social policy

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Image: Verkhovna Rada

Speaking to openDemocracy, Tretiakova expanded on her comments, saying that “international agreements” such as the ILO conventions “are part of our legislation”, but that the number of claims at the European Court of Human Rights against Ukraine for breaches of social and employment rights were “snowballing”.

“We have to re-examine the obligations of the state, and they have to match the capacity of the state at this specific historical moment,” she said. “To ensure the number of claims don’t rise, we have to ‘reset’ the labour code and [Ukraine’s] social model, which was not done during the country’s transition from socialism to a market economy.”

She added: “Whether this will require Ukraine leaving some forms of international agreements is a question for the executive branch, which will have to clearly define what we have funds for – and what we don’t.”

The ILO said it had planned an official visit to Ukraine in early August, “following an invitation by the [Ukrainian] government and social partners”. But the agency told openDemocracy it had cancelled the visit, due to “very heavy logistics… the prevailing security situation and high-level meetings that were pending confirmation”.

The ILO said everyone invited had shown “genuine interest” in meeting with the organisation’s head Guy Ryder, and “regretted when the visit was cancelled.”

But Mykhailo Volynets, head of the Confederation of Free Trade Unions of Ukraine, said that the cancellation of the ILO’s visit had “turned out nicely” for the Ukrainian parliament and government.

“It would have been very difficult for the authorities to meet with the ILO delegation after the latter’s criticism of recent draft labour legislation,” he said. The cancellation of the visit, Volynets added, allowed the ILO to avoid a public “slap in the face” by the Ukrainian parliament, which has ignored the UN agency’s recommendations to improve incoming labour laws.

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Ukrainian MP Mykailo Volynets speaks at a miners protest in Kyiv, 2021

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(c) Raj Valley / Alamy Stock Photo. All rights reserved

New legislation attacking workers’ rights

Trade unions and business groups in Ukraine are currently believed to be lobbying Zelenskyi over new labour regulations, which require his signature before they become law.

The new law was introduced to parliament by Tretiakova and other MPs, and approved last month. It could move up to 70% of the country’s workforce – employees of small- and medium-sized enterprises – outside the scope of national labour law. The draft legislation has been heavily criticised by a joint EU-ILO project on “decent work” in Ukraine.

If the legislation is signed by Zelenskyi, employees will be encouraged to strike individual bespoke agreements with their employers – which is a direct breach of ILO principles.

According to the EU-ILO project, the legislation “appears to exclude a significant share of the Ukrainian workforce from… the general labour law through the establishment of a parallel and less protective regime”.

It will also institute the possibility of “at-will termination” of employment and “unilateral change by the employer of essential terms and conditions” of work, the project claimed. This is another breach of ILO principles.

Critics have previously claimed that deputies in the Ukrainian parliament have used Russia’s invasion, which has displaced millions of people inside and outside the country, as a “window of opportunity” to pass potentially controversial reforms.

Prior to the war, Ukrainian trade unions organised protests against attempts by the ruling Servant of the People party to cut back on workplace and trade union rights.

The draft reconstruction plan named Ukrainian workers’ “low loyalty to reforms” and the “active position of resistance taken by trade unions” as “key institutional restraints” to planned reforms.

An ‘attractive’ law to ‘simplify regulations’

Ukraine’s Ministry of Economy told openDemocracy that it is working on new legislation that will replace the country’s existing labour code, which was originally written in 1971 – and has been updated on numerous occasions since.

The new legislation’s aim, the ministry said, was to create an “attractive” labour law that would “simplify regulations, minimise state intervention in the regulation of employment and form a system of flexible protection”.

Under the future labour code, employees would have the “freedom to choose how to organise their employment together with active state control over minimum standards and conditions,” it said.

Tretiakova told openDemocracy that “Ukraine itself has an interest” in ensuring social dialogue principles are upheld.

“We don’t need pressure from abroad for this,” she said, noting that her parliamentary committee on social policy is in “constant contact” with a high-level body connecting Ukrainian trade unions and employers associations.

Sandul, however, was unconvinced.

“For years, unfortunately, the practice of social dialogue in Ukraine was quite inert,” he said. “But we have it on paper, and that’s just an engine waiting to be turned on.”

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