The Moscow region trilateral agreement has been made for 2018-2020

The Moscow Region Government, the Union “Moscow Region Alliance of Trade Unions” and the associations of employers of the Moscow Region have entered into a Moscow Region Trilateral (Regional) Agreement for 2018-2020 (the “Agreement”).[1]

The Agreement was published on the website of the Moscow Region Government on 26 December 2017[2].

The Agreement applies to companies that are members of the Moscow Region Union of Industrialists and Entrepreneurs (the ”Union”) as well as companies that are not members of the Union, but which authorised it to enter into such Agreement on their behalf.

The Agreement contains a number of additional obligations for employers. For example, clause 6.1.15 stipulates an obligation of employers to conclude, not later than 1Q2018, collective bargaining agreements setting out a number of essential conditions, including:

• wage and salary indexation at a rate not lower than the growth rate of consumer prices;
• a procedure for establishing a ratio ranging from 1 to 6 between the average salary of a company’s executive officer and that of the company’s employees.

As a competent authority, the Moscow Region Ministry for Social Development may (but is not obliged to) propose that companies engaged in business in the Moscow Region accede to the Agreement. Such a proposal must be officially published and must contain information regarding the registration of the Agreement and the source of its publication.[3] After a proposal to accede to the Agreement is published, companies will have 30 calendar days to refuse to accede to it by forwarding their grounded refusals in writing to the Moscow Region Ministry for Social Development.

Nevertheless, according to the representatives of the Moscow Region Ministry for Social Development the Ministry is not planning to propose accession to the Agreement to employers who did not participate in the conclusion of it. Consequently, it only applies with respect to companies that are members of the Union, or who authorised the Union to enter into the Agreement on their behalf.

Implications for companies

At present, the Agreement does not apply to companies which did not participate in the conclusion of it (which are not members of the Association of Employers and did not authorise it to enter into the Agreement).

We recommend that companies engaged or planning to be engaged in business in the Moscow Region take into consideration the Agreement and regularly check for information regarding the publication of a proposal to accede to it.

If the Moscow Region Ministry for Social Development decides to publish a proposal to accede to the Agreement, companies will be able to refuse to accede to it. To this end, not later than 30 days after the publication of the accession proposal the companies should forward their grounded refusals in writing to the Ministry for Social Development (see article 48(8) of the Russian Labour Code and article 19(4) of Moscow Region Law No. 15/99-OZ dated 31 March 1999).

Help from your advisers

Pepeliaev Group's lawyers will readily provide the necessary legal support if the need arises to draft the documents required to refuse to accede to the Agreement and on any other issues which relate to the Agreement being in effect.