Joining the 2017-2019 federal sector-based agreement for rail transport companies

On 16 May 2017, Rossiyskaya Gazeta published a Letter of the Russian Ministry of Labour and Social Protection (the 'Ministry of Labour') in relation to joining the 2017-2019 Federal Sector-based Agreement for Rail Transport Companies (the 'Agreement').

The Agreement applies to:

• rail transport companies with membership of the All-Russian Association of Railway Transport Employers Zheldortrans (the ‘Association’);
• railway transport companies that are not members of the Association but have authorised the Association to enter into the Agreement on their behalf;
• other railway transport companies unless such companies submit to the Ministry of Labour a wellgrounded written refusal to join the Agreement by 15 June 2017.

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

• A strict criterion of a large-scale layoff has been set. A layoff is regarded as large-scale if 5 percent or more of the employees in a company, a branch or other unit have been laid off within 90 calendar days (clause 6.5).
• An increased night differential is set of at least 40% of the tariff rate/salary (clause 4.7).
• When an employee retires, he/she is entitled to a one-time remuneration payment (clause 8.2.2).
• A trade union is entitled to 0.5% of the payroll budget for holding events relating to social protection of employees and their family members and cultural and recreational activities (clause 10.4.2).

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 it to enter into the Agreement), the only
option for refusing to join is to file a well-grounded refusal with the Ministry of Labour, accompanied by the minutes of consultations with the elective 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 Agreement, and, if the decision is taken to refuse to join, filing a well-grounded refusal with the Ministry of Labour. The time period for filing a wellgrounded
refusal is 30 calendar days after the agreement is published. To rule out disputes over whether the refusal to join the agreement was filed in due time, we recommend that you ensure that the refusal is filed with the Ministry of Labour on or before 15 June 2017.

If such well-grounded refusal is filed in breach of the deadline, the employees will have the right to claim (including through the court) that guarantees, compensations and benefits be granted to them in
accordance with the Agreement. Labour inspectorates will have grounds to hold the company administratively liable for not complying with the Agreement.

Help from your advisers

Pepeliaev Group's lawyers 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.