How companies in the oil and gas industries and construction companies that build oil and gas facilities may join the federal industry agreement for 2014 -2016

At federal level, the industry agreement has been adopted which sets additional obligations and automatically extends to companies in the oil and gas industries and to construction companies that build oil and gas facilities. To refuse to join the agreements, a well-grounded refusal should be submitted to the Russian Ministry of Labour and Social Protection by 13 May 2014.

On 14 April 2014, Rossiiskaya Gazeta published a Letter of the Russian Labour and Social Protection Ministry (the "Ministry") in relation to   companies in the oil and gas industries and  construction companies that build oil and gas facilities joining the industry agreement for 2014-2016 (the "Agreement").

The Agreement has effect in relation to:

• companies that are members of the All-Russian Association of Employers in the Oil and Gas Industries (the "Association"),
• companies which are not members of the Association but have authorised the Association to enter into the Agreement on their behalf, and
• other companies in the Russian oil and gas industry, or involved in constructing oil and gas facilities, unless such companies submit to the Ministry a well-grounded refusal to join the Agreement by 13 May 2014. 

Below we set out some of the provisions of the Agreement which lay down additional requirements for employers.

• The supplemental payment for night work should be no less than 40% of the hourly base rate (clause 3.6);
• Payments should be made to the trade union organisation  in the amount of at least 0.3% of the payroll fund  for cultural and in recreational activities (clause 12.1.3);
• The elected body of a trade union organisation should have provided to it free of charge the necessary premises along with all equipment, heating, lighting, cleaning services and security for the work of the elected body itself as well as for trade union meetings (assemblies) to be conducted, along with vehicles, means of communication (including Internet access), office equipment and other technology, and the servicing of these items should be guaranteed (clause 12.1.2).

Implications for companies

For companies which did not play a part in the Agreement being concluded (i.e. those which are not members of the Association of Employers and did not authorise them to enter into the Agreement), the only option for refusing to join is to file a well-grounded refusal with the Ministry, accompanied by the minutes of the discussions with the elected body of the primary trade union organisation which represents the company's employees (article 48(8) of the Russian Labour Code). 

We recommend considering whether it is prudent to join the Agreements, and, if the decision is taken to refuse to join, filing a well-grounded refusal with the Ministry. It is also necessary for the Ministry to receive a well-grounded refusal within 30 calendar days from the publication date, that is, by 13 May 2014 inclusive.

If such well-grounded refusal is not filed or is filed after the deadline, the employees of the relevant company will have the right to claim (including by going to court) for guarantees, compensations and benefits to be granted to them in accordance with the Agreement. State Labour Inspectorate bodies will have grounds to hold the company administratively liable for not complying with the Agreement.

Help from your adviser

Pepeliaev Group's experts will readily provide the necessary legal support when the documents are prepared which are required to refuse to join the Agreement, and on any other issues which relate to the Agreement being in effect.

Contact details

in Moscow - Julia Borozdna Head of practice «Pepeliaev Group» by Tel.: +7 (495) 967-00-07 or by e-mail: j.borozdna@pgplaw.ru 

in St. Petersburg - Alexander Korkin Senior associate «Pepeliaev Group» by Tel.: +7 (812) 640-60-10 or by e-mail: a.korkin@pgplaw.ru

in Krasnoyarsk - Egor Lysenko Head of Siberian office «Pepeliaev Group» in Krasnoyarsk by Tel.: +7 (391) 277-73-00 or by e-mail: e.lysenko@pgplaw.ru