The Labour Ministry has proposed that employers sign up to the Federal Sector Agreement for Agriculture in the Russian Federation in 2012-2014

The Federal Sector Agreement for Agriculture in the Russian Federation in 2012-2014 (the “Agreement”) sets many additional obligations for employers and it extends to a wide range of companies (including manufacturers of food, drinks and tobacco). 

If a company active in the agricultural sector does not send to the Labour Ministry by 12 November 2012 a well-grounded refusal to sign up to the Agreement, the Agreement will be regarded as binding for the Company. 

1. Systems for paying employees, including wage rates and salaries, bonuses and allowances of a compensatory nature, shall be established in consultation with the elected bodies of the primary trade union (clause 7.1).

2. Bonuses and other incentive payments to managerial staff shall be paid “out of companies’ profits that remain after taxes are paid and other payments made as established by current legislation, and provided that there are no wage arrears to employees” (clause 7.4).

3. The terms on which work is be paid for shall be introduced and reviewed having regard to the opinion of the elected body of the primary trade union, with employees being notified no later than two months in advance (clause 7.5). 

4. Employers shall assist companies’ workers in improving their living conditions and shall direct part of the profits at the company’s disposal to help individual and cooperative construction and participation in joint construction (clause 8.3). 

5. Transport vehicles shall be provided free of charge to the elected body of the primary trade union (clause 11.2). 

6. There shall be a contribution of 0.5% of payroll costs to elected trade union bodies for professional skills contests, cultural events and so on to be held (clause 11.2). 

7. Employees who are not exempt from main work and who serve on elected trade union bodies shall not be subject to disciplinary action, transfer to another job or dismissal without the consent of a higher trade union body (clause 11.2). 

The Agreement is applicable to:

• companies under the authority of the Agriculture Ministry, the Federal Veterinary and Phyto-sanitary Supervisory Service  and the Russian Academy of Agricultural Science,

• members of the All-Russian Agricultural Employers’ Association and of the Association of Smallholders’ (Farmers’) Enterprises and Agricultural Cooperatives,

• companies that are not members of the above associations, but are active in specified industries (as long as they have not sent a well-grounded refusal by the established deadline). Among these sectors are the manufacture of food products (including beer and other drinks), the manufacture of tobacco products, as well as agriculture, forestry and fishing. 

For agricultural companies which were not involved in concluding the Agreement, the only way to withdraw from it is to send a well-grounded refusal to the Labour Ministry, attaching a protocol of consultation with the elected body of the primary trade union representing the company’s employees (article 48(8) of the Labour Code). 

The refusal must reach the Labour Ministry within 30 calendar days of the publication date – i.e. 12 November 2012 at the latest. 

If a company in the agriculture sector does not send such a well-grounded refusal, or sends it out of time, employees of that company will be entitled to require that they be granted guarantees, compensation and benefits in accordance with the Agreement. Also, State Labour Inspectorate bodies will have grounds to impose administrative liability for failure to comply with the Agreement. 

Pepeliaev Group’s lawyers are ready to provide the necessary legal assistance in executing documents needed to withdraw from the Agreement, as well as on other issues relating to the effect of the Agreement. 

In Moscow – Julia Bozozdna, Head of Employment and Migration Law, by tel: +7 495 967 00 07 or by j.borozdna@pgplaw.ru

In St Petersburg – Alexander Korkin, Associate, by tel.: +7 812 640 60 10 or by a.korkin@pgplaw.ru