Russia: New industry agreement for machine-building sector

In brief

Companies in Russia's machine-building sector have until September 4, 2020 to opt out of a new Federal Industry Agreement for the Machine-building Sector for 2020-2022 (the "Agreement"), by submitting a justified notification to the Russian Ministry of Labor and Social Security (the "Ministry of Labor").

A Federal Industry Agreement is a sector-specific regulatory act that establishes general terms for employee salaries, guarantees and benefits. These agreements, which are negotiated by trade unions, industry associations, and the Ministry of Labor, are binding on all companies that do not opt out.


Recommended actions

Machine-building companies should carefully study the new requirements (see below). Companies that do not wish to be bound by the new Agreement should submit their reasoned refusals as soon as possible, together with records of consultations with the elected body of the primary trade union. The Ministry of Labor may require such companies and the relevant union representatives to attend further consultations.

In more detail: provisions of the Agreement

The Agreement provides a number of significant additional guarantees to workers in the machine-building sector over and above those provided by the Labor Code. In particular, companies are obliged to:

  • make the basic part of the pay package not less than 60%;
  • ensure a ratio of no more than 1:7 between the wage levels of the 10% of employees with the lowest wages and the 10% with the highest wages;
  • make an additional payment for night or evening work of not less than 40% and 20% of the wage rate (base salary) respectively (current legislation provides for an additional 20% for night work and no additional payment for evening work);
  • pay a one-off sum of compensation to the family of an employee in the event of the employee's death in an industrial accident of at least 75 times the minimum monthly wage (from January 1, 2020 - RUB 12,130);
  • provide additional paid vacation:
    • for long service in the company;
    • to women with children under the age of 14;
    • to disabled employees;
    • at the birth of a child;
    • at the marriage of an employee;
    • in the event of the death of a spouse or family member (children, parents, brothers or sisters);
    • on September 1 (Knowledge Day in Russia) to one of the parents of a first-grader or to other persons raising the child;
    • for irregular working hours;
  • provide additional guarantees and benefits to young employees, including granting monetary assistance and loans.

By agreement with the trade union, employers may provide other benefits to employees (for example, monetary assistance to employees with large families, payment for employees' travel to and accommodation in sanatoriums, recreation camps, etc.).

In addition, there are additional guarantees for employees who are elected trade union officials, for example:

  • companies must not apply disciplinary sanctions to such employees without the consent of the trade union;
  • companies must not dismiss employees who are elected officials of any superior trade union body within two years after the end of their terms (exceptions: liquidation of the company, employees who commit actions entailing dismissal under the law).

You may view the Russian version here.

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