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Can Eurasian Labour Law Follow the EU Integration Path?

Nikita L. Lyutov, Associate Professor, Doctor of Law, Kutafi n Moscow State Law University, National Research University Higher School of Economics, Moscow, Russia

Since January 1, 2012 Belarus, Kazakhstan and Russia have established a free movement of labour force within the territory of each other1. The politicians have announced that by 2015 this regional integration area will have been transformed into the Eurasian Economic Union with a perspective to become a “Eurasian Union” as a deeper confederative structure2. There are political discussions about the inclusion of some other post-USSR countries in this process. The parallels of this regional integration project with the EU integration process are obvious. But there are also serious diff erences between them. This article is aimed at pointing out some of these parallels and diff erences in order to understand what may be a general prospect for such labour law harmonisation.

Different origins of the labour law transition

The EU and former USSR counties have very different origins of their respective integration processes. The European integration is rooted in World War II and associated with the idea of such deep economic interdependence that would prevent wars between the European countries in the future, to make war “not merely unthinkable, but materially impossible”[1]. The starting point of the European integration was co-existence of very different in size, culture, but rather densely populated countries on a relatively small territory of the European continent. What is also very important is that Europe has a different set of labour relations traditions within its different regions. The unification process in Europe has been very lengthy, unstable and fragile.

The Eurasian situation is different. All countries of this regional integration project were parts of one big country, namely the Soviet Union, little more than twenty years ago. Most of the post-USSR existence of these countries has been associated with a “civilized divorce” of the newly independent states. The very name of the new regional structure – the “Commonwealth of Independent States” (the CIS) was underlining the idea that it is disintegration rather than an integration project. This process of separation was accompanied by harsh neoliberal economic reforms aimed at opening the markets to foreign importers and without any real protection of the national industries. This politics soon led to very bad humanitarian, social and economic consequences[2]. The economy of all parts of the former USSR was greatly deindustrialised[3].

The collapse of the Soviet Union has also resulted in a big gap of economic development among the independent states – former parts of the USSR. While Russia, Kazakhstan and Belarus are relatively rich on the regional scale, other countries are significantly poorer.[4] The same may be said concerning social development. While richer countries of the region have retained some of the Soviet social potential, such as education and a healthcare system, poorer countries have rapidly degraded.[5] The economic and social disproportion between the newly independent countries combined with visa-free movement of their respective citizens among most of them, have led to the huge amount of labour migration – mainly to Russia. This migration has become one of the main political and social challenges not only to Russia but to all countries of the region. Russia is said to be the biggest in Europe and second biggest in the world (after the United States) migrant-workers importing country[6].  The great majority of labour migrants work illegally[7] and suffer from almost slave-like working conditions[8]. At the same time, they come to big cities, taking the unqualified work from the local population.

Another feature of the post-USSR situation is the domination of Russia within the post-Soviet territory. Russia is by far bigger than all other post-Soviet states taken together. Obviously, such a situation provokes concerns in the newly independent countries that any integration project with participation of Russia is an attempt to adjoin and absorb the smaller countries into Russia. This situation is a serious obstacle to the economic or political integration within the region.

Nevertheless, from the legal perspective, the post-Soviet area is much more homogenous than the EU. Unlike the EU countries, all post-Soviet countries have been transforming their legal systems from one point. The labour legislation was not an exception. Up to the moment of the collapse of the USSR, the system of the Soviet labour legislation was based on the USSR Constitution of 1977[9], the Fundamentals of legislation on labour of the USSR of 1970[10], and republican codes of laws on labour that came into force in 1972[11], according to the common model introduced by the Fundamentals of legislation in 1970 and various governmental and ministerial resolutions, orders and decrees. All republican labour codes were almost identical.

This unity was not only covering the legislation itself. All legal doctrine in the field of labour was uniform. After little more than twenty years, the labour law of the countries of the region has undergone fundamental changes, but as long as the inter-communication among the labour law scholars, officials and practitioners has never stopped, the trends of changes have been similar in many aspects. The Russian language as lingua franca of the region has been a very important factor of the common development of labour law.

 

Different trends in the labour legislation development

Except for Ukraine, all countries of the region have adopted the new labour codes. The codes are not identical and reflect changes in political, legal and social situations within the newly independent countries.

The Belarus labour legislation (the Labour Code, set of independent laws and presidential decrees as well as some other legislative acts) is drafted with an accent on the priority of state regulation and a certain degree of authoritarianism. For example, the Labour Code of Belarus[12] is coupled with a Presidential Decree[13] that provides for the conclusion of temporary contracts with employees and additional disciplinary measures that seriously deteriorate employees’ legal position compared to the Labour Code. What is unthinkable for other countries of the region, Presidential Decree is not lower in the hierarchy of legal sources than the Code. Also well-known is the situation at the end of 2012 when A. Lukashenko adopted a notorious decree[14] suspending the freedom of workers of certain woodworking enterprises to terminate their employment contracts on their own initiative without the employer’s consent. This Decree is in clear controversy with basic international labour standards concerning the prohibition of compulsory of forced labour.

Kazakhstan is an example of another trend in labour legislation development. The current Labour Code of Kazakhstan[15]  was adopted in 2007 with a significant influence of the neoliberal ideology.  Therefore, employers enjoy more flexibility in the employment relations than in other countries of the region. For example, an employer in Kazakhstan is entitled to conclude a temporary employment contract without any limitation[16] while the labour codes of other countries of the region provide for the exhaustive list of grounds for conclusion of such contracts[17].

The Russian post-socialist development of labour law may shortly be described as a kind of complicated mixture of authoritarian trends, neoliberal politics, and compromises with civil society. The current Russian Labour Code[18]  was adopted at the end of 2001 after more than a decade of very harsh political struggle. It provides for very weak opportunities for collective bargaining (accompanied by loud declarations about trade union rights) combined with institutional guarantees for existence of the big “old” trade unions.

The division of the trade unions into “old” and “new” is quite typical of the region as a whole. This division is characterised by existence of the trade unions that were a kind of very important quasi-governmental institutions functioning as an intermediary between workers and employers during the socialist period. Having outlived the socialist system, they have been privatised. But in the majority of cases, these “old” trade unions did not become the really independent representatives of employees. Newly formed trade unions in many cases get into competition with these structures[19].

Ukraine also reflects these controversial trends in the development of its labour legislation. But the political situation in this country is more decentralised than in other countries of the region. This seems to be the main reason why the country still lives with the many times amended old Code of Laws on Labour[20] adopted in 1971. In 2013, there was an arduous discussion concerning the adoption of the new labour code[21].

Kyrgyzstan that seems to be the closest country-candidate to participate in the Eurasian integration process beside Belarus, Kazakhstan and Russia has the Labour Code that was adopted in 2004[22] and generally repeats the contents of the Russian Labour Code. The majority of Kyrgyzstan Labour Code articles repeat the initial version of the Russian Code word by word.

 

The common structure of labour law within the region

The structure and the very language of labour legislation in the Eurasian region are based on very much the same ground.

First of all, there is common understanding among lawyers about the main law within the field of labour – namely, the labour code. Such law usually regulates the majority (but not all) of issues concerning labour and employment. More technical norms are usually left to the governmental and ministerial acts.

Even the structure of labour codes is very much alike. Although the sequence of different parts of the Codes is not identical, the contents of chapters and the very wording of the text are rather similar.

A closer look at contents of the codes also shows more similarities than the differences. All codes, as well as the legal doctrine of the countries, treat the employment contract as a central institution of labour law. The rules on conclusion, modification and termination of an employment contract are not identical but rooted in the same basic foundations elaborated in the Soviet times.

For example, the dismissal regulation has very clear regional specifics. In the majority of the countries in world, the employment contract may be terminated at the employer’s discretion for “valid reasons”, not specified directly in the legislation but defined in the case-law[23]. Labour Codes of the post-Soviet countries use another approach that has been used in the labor codes of the USSR republics. All specific dismissal grounds are exhaustively listed in the labour codes or some other laws covering specific categories of workers[24]. There are few exceptions for separate categories where additional grounds may be directly stated in the employment contract, but they are rather rare (company directors, home and distant workers and some others). The vast majority of dismissal grounds in the Labour Codes are either identical or very much alike. Even the sequence of dismissal grounds is the same, including sometimes logical gaps in the texts, such as the mixture of special and general grounds in the same articles combined with mentioning other special grounds in separate articles.

The parallels in legal regulation of employment relations may be found in any institution of labour law of the countries of the region: dismissals, working time, labour discipline, occupational safety and health, wage-setting etc. Very similar are the methods of labour-disputes resolution. Even the flaws in the labour codes of the post-USSR countries also seem to be alike or the same.

For example, Kazakhstan and Russia have unique definitions of lock-out[25] that state that lock-out is the termination of an employment contract by the employer because of employee’s participation in a legal strike or a collective labour dispute. “Lock-outs”, understood in such a narrow way, are declaratively prohibited in both Labour Codes. This does not prevent the employer from the opportunity not to let strikers enter the territory of the company if they want to participate in a sitting strike, i.e. to declare a defensive lock-out as it is understood almost everywhere[26].

Sometimes legal norms of one country of the region reflect academic and political discussions of another. For example, there is a more than ten-years long discussion in Russia that a shamefully low[27] level of the minimum wage must at least exclude additional payments to worker such as regional payments associated with severe climate of the far-north, family benefits etc. – so these payments would be paid over the minimum wage level. Up to now, Russian law did not satisfy these claims in favor of workers. Unlike the Russian Code, the Kazakhstan Labour Code contains a direct mention[28] that these additional payments are not included in the minimum wage. This mention seems to be a clear reflection of the discussion in Russia.

These examples that may be multiplied almost endlessly show that creators of labour legislation in the region use the neighbor-countries’ doctrine and laws as a source of inspiration much more frequently than international labour standards or non-Russian speaking countries legislation. Even the norms that are clearly associated with the market economy and, therefore, were adopted after the collapse of the USSR are made in quite a similar way. All these examples of uniformity are more or less applicable to other potential participants of the Eurasian integration process.

 

Conclusion

As it is clear from the stated above, there is no technical problem to create common labour legislation for the Eurasian region which can be much more coherent and unified than the EU labour law. All labour law systems of the countries belong to a single family and may be harmonised rather easily[29]. Within this process of harmonization, some common flaws of legislation may be avoided, and best practices from other countries and international labour standards may be used. Some good examples for adaptation may be found in the EU norms, such as the protection of workers in the process of transfer of undertaking, establishment of the guarantee institutions for cases of employer’s insolvency, stronger mechanisms of information and consultation, better collective bargaining rights etc.

The integration is much more difficult from the political point of view. Despite the economic benefits of a bigger integrated economy, perceptions about Russian imperialist ambitions may be a very serious obstacle to the integration.

But even if the process of economic and legal integration, including the labour law harmonization, would go smoothly in the Eurasian region, the policy-makers must take into account the mistakes of the EU with too ill-judged and quick integration of the new participants of the Union with much weaker economic systems than those of the “old member-states”. The very resonant European Court of Justice cases seem to be only the top of the iceberg in respect of the consequences of this speedy integration[30]. The Eurasian region has absolutely the same problem of difference in the living standards between different countries therein.

This means that although there is  good integration potential for labour law within the Eurasian region, the prospects of such integration are far from being clear now.



[1] See the “Schuman Declaration” that was presented by French foreign minister Robert Schuman on 9 May, 1950. Available at: http://europa.eu/about-eu/basic-information/symbols/europe-day/schuman-declaration/

[2] It seems to be enough to say that life expectancy in Russia has decreased from 69.19 years in 1990 to 63.85 in 1994. And it has not recovered totally until today. See: Rossiyskii statisticheskii ezhegodnik, 2009 [Russian statistical annual, 2009]. Moscow, 2009. Available at: http://www.gks.ru/bgd/regl/b09_13/IssWWW.exe/Stg/html1/04-01.htm. It is difficult to say how many human lives were taken by the “shock therapy” because it is impossible to find out the direct or indirect causes in each particular case. But definitely numbers are counted in millions. See more details about it: Doklad komissii po voprosam jenshin, sem’i i demografii pri prezidente Rossiyskoii Federatsii “O sovremennom sostoianii smertnosti naseleniia Rossiiskoy Federatsii [President of Russia Commission on Gender, Family and Demography Issues Report “On Current Death Rate of the Russian Federation Population”], Moscow, 1997.

[3] See, for example: J. Stiglitz: The ruin of Russia// The Guardian, Wednesday. April 9, 2003. Available at:  http://www.guardian.co.uk/world/2003/apr/09/russia.artsandhumanities.

[4] According to IMF data presented in the World Economic Outlook Database for 2013, GDP per capita for Russia in 2012 was 14,247 US dollars, for Kazakhstan – 11,773, for Belarus – 6.739. Ukraine presents much more modest number of 3.877 USD per capita, while numbers for the Middle Asia are: Kirgizstan – 1,155 USD, Uzbekistan – 1.737 USD, Tajikistan – 0,953 USD. See: International Monetary Fund. World Economic Outlook Database, April 2013: http://www.imf.org/external/pubs/ft/weo/2013/01/... Even if to deduct these numbers with purchase parity power calculations, the contrast would still be too manifesting.

[5] United Nations Human Development Report of 2013 puts Belarus, Russia, Kazakhstan and Ukraine to the group of countries with high Human Development Index (HDI) with respective indexes being: 0.793; 0.788, 0.754 and 0.740 and Uzbekistan, Kirgizstan and Tajikistan to medium HDI group with 0.654 for Uzbekistan and 0.622 for Kirgizstan and Tajikistan. See: United Nations Development Programme. Summary Human Development Report 2013. The Rise of the South: Human Progress in a Diverse World. New York: UN, 2013, pp. 16 – 18. Available at:   http://hdr.undp.org/en/media/HDR2013_EN_Summary.pdf

[6] Rossiyskaia Gazeta [Russian Gazette]. March 31, 2009.

[7] It is practically impossible to give the number of illegal labour migrants in Russia. (Materials of the Parliamentary Hearings in the State Duma of Russia “Problemy zakonodatelnogo regulirovaniia trudovoi’ migratsii i deiatelnosti negosudarstvennykh agenstv zaniatosti v Rossiyskoii Federatsii [The Issues of Legal Regulation of Labour Migration and of the Activities of Private Employment Agencies in the Russian Federation], April 21, 2004. Unpublished). Different expert estimates concerning this issue were between 5 and 15 million in 2004. Since that time this number has been only growing.

[8] See: E. Tyuryukanova. Trudovaia migratsiia v Rossii [Labour Migration to Russia]// Demosope Weekly, 2008. http://polit.ru/article/2008/01/21/demoscope315/#_ftn1

[9] Vedomosti Verkhovnogo Soveta SSSR, 1977, No. 41, art. 617.

[10] Vedomosti Verkhovnogo Soveta SSSR, 1970, No. 29, art. 265.

[11] Vedomosti Verkhovnogo Soveta RSFSR, 1971, No. 50, art. 1007.

[12] Trudovoi’ kodeks respubliki Belarus [Labour Code of the Republic of Belarus] July 26, 1999. No. 296-Z, Natsionalnii reestr pravovykh aktov respubliki Belarus [National Register of Legal Acts of Republic of Belarus] 1999, No. 80. Available at: http://www.tamby.info/kodeks/tk.htm 

[13] President of Belarus Decree of June 26, 1999 No. 29 “O dopolnitelnykh merah po sovershenstvovaniyu trudovykh otnoshenii, ukrepleniyu trudovoy i ispolnitelskoi discipliny” [“On Additional Measures for Development of Labour Relations and Strengthening of Labour and Performance discipline”], http://base.spinform.ru/show_doc.fwx?rgn=18103.

[14] President of Belarus Decree of December 7, 2012, No. 9 “O dopolnitelnykh merah po razvitiyu derevoobrabatyvaushchey promyshlennosti” [“On additional measures on woodworking industry development”], http://www.belta.by/ru/articles/officially?cat_id=1528.

[15] Trudovoi’ kodeks respubliki Kazakhstan [Labour Code of the Republic of Kazakhstan] May 15, 2007, No. 251-III ZRK, Paragraph Data base: http://online.zakon.kz/Document/?doc_id=30103567. 

[16] Art. 29, para. 2 of the Labour Code.

[17] See, for example, Art. 17 of the Belarus LC, Art. 57 of the Russian Labour Code.

[18] Trudovoi’ kodeks Rossiiskoii Federatsii [Labour Code of the Russian Federation]. Sobranie Zakonodatelstva Rossiyskoii Federazii [Corpus of legislation of Russian Federation], January, 7, 2002, No.1, art.3. 

[19] For more details see: N. Lyutov. Freedom of Association: the Case of Russia// Comparative Labor Law and Policy Journal. Vol. 32, No. 4, 2011, pp. 933 – 948.

[20] Kodeks zakonov pro pravo Ukraini [Code of Laws on Labour of Ukraine] Law No. 322-VIII of December 10, 1971; Vedomosti Verkhovnoi’ Rady Ukraini [Gazette of the Supreme Council of Ukraine] No. 50, art. 375.

[21] See, for example: A. Panchenko. Plyusi i minusy novogo trudovogo kodeksa [Pluses and Minuses of the New Labour Code], Segodnya.ua, April, 2013. Available at: http://www.segodnya.ua/ukraine/Plyusy-i-minusy-novogo-Trudovogo-kodeksa.html

[22] Trudovoi’ kodeks Kyrgyzskoii Respubliki [Labour Code of the Kyrgyz Republic] August 04, 2004, No. 106 //Paragraph Database: http://online.adviser.kg/Document/?doc_id=30296269&mode=all.

[23] See: ILO. Protection Against Dismissal.  International Labour Conference 82nd Session, 1995. General Survey on the Termination of Employment Convention (No. 158) and Recommendation (No. 166), 1982 Report of the Committee of Experts on the Application of Conventions and Recommendations. Geneva: ILO, 1995, pp. 31 – 61.

[24] See the Russian LC Art. 81, the Kazakhstan LC art. 54, the Belarus LC art. 42 and 47.

[25] Art. 415 of the RLC, Art. 305 of the Kazakhstan LC.

[26] See: Jacobs A.T. J.M. The law on strikes and lockouts// Comparative Labour Law and Industrial Relations in Industrialised Market Economies. Ed. R. Blanpain Xth Ed. Wolters-Kluwer, 2010, p. 707; Strikes and Lock-outs in Industrialised Market Economies. Eds. R. Blanpain, R. Ben-Israel // Bulletin of Comparative Labour Relations, Vol. 29, 1994, p. 234 et al.

[27] In 2014 the monthly minimum wage in Russia is 5554 rubles, i.e. 160 US dollars or 117 euros. See: Federalnii Zakon o minimalnom razmere oplaty truda [Federal Law on Minimum Wage Level] of June 19, 2000 No. 82-FZ (amended in December 2,  2012)// Sobranie Zakonodatelstva Rossiyskoii Federazii, [Corpus of legislation of Russian Federation]. December 9,  2012, No. 39 (part. 1), art. 6337.

[28] Art. 122 of the Kazakhstan LC.

[29] See more about such prospects: S.Yu Golovina. Perspektivy razvitiia trudovogo zakonodatelstva v ramkakh Evraziyskogo Economicheskogo Soobshchestva [Perspectives of Labour Legislation Development Within the Eurasian Economic Community], Rossiyskii ezhegodnik trudovogo prava [Russian Annual of Labour Law], No. 4, 2008. pp. 351 – 368; S. Yu. Golovina. Sravnitelnii analiz institute trudovogo dogovora v zakonodatelstve stran EvrAzES [Comparative Analysis of the Employment Contract Regulation in the Eurasian Economic Community legislation]// A paper for International Conference “Mezhdunarodnoe, rossiyskoe I zarubezhnoe zakonodatelstvo o trude i sotsialnom obespechenii” [International, Russian and Foreign Labour and Social Security Law]. Moscow: Prospect, 2011, p. 255 – 262.

[30] ECJ. Laval un Partneri Ltd v Svenska Byggnadsarbetareförbundet, Svenska Byggnadsarbetareförbundets avdelning 1, Byggettan and Svenska Elektrikerförbundet. Case No. С-341/05 of December 18, 2007; ECJ. International Transport Workers Federation v Viking Line ABP. Case No. C-438/05 of December 11, 2007. See more on the issue: The Laval and Viking Cases: Freedom of Services and Establishment v. Industrial Conflicts in the European Union. R. Blanpain (ed.), A. M. ?wi?tkowski (guest editor). Kluwer Law International, 2009, p. 248; Barnard C., Deakin S. European Labour Law after Laval// Before and after the Economic Crisis: What Implications for the “European Social Model” M.-A. Moreau (ed.) Cheltenham, Northhampton, 2011, pp. 252 – 269 et al.

Bibliography:

  1. E. Tyuryukanova. Trudovaia migratsiia v Rossii [Labour Migration to Russia] // Demosope Weekly, 2008.
  2. J. Stiglitz: The ruin of Russia // The Guardian, Wednesday. April 9, 2003.
  3. Jacobs A.T. J.M. The law on strikes and lockouts // Comparative Labour Law and Industrial Relations in Industrialised Market Economies. Ed. R. Blanpain Xth Ed. Wolters-Kluwer, 2010, p. 707.
  4. Panchenko. Plyusi i minusy novogo trudovogo kodeksa [Pluses and Minuses of the New Labour Code], Segodnya.ua, April, 2013.
  5. S.Yu. Golovina. Perspektivy razvitiia trudovogo zakonodatelstva v ramkakh Evraziyskogo Economicheskogo Soobshchestva [Perspectives of Labour Legislation Development Within the Eurasian Economic Community], Rossiyskii ezhegodnik trudovogo prava [Russian Annual of Labour Law]. 2008. № 4. pp. 351 – 368.
  6. S.Yu. Golovina. Sravnitelnii analiz institute trudovogo dogovora v zakonodatelstve stran EvrAzES [Comparative Analysis of the Employment Contract Regulation in the Eurasian Economic Community legislation] // A paper for International Conference “Mezhdunarodnoe, rossiyskoe I zarubezhnoe zakonodatelstvo o trude i sotsialnom obespechenii” [International, Russian and Foreign Labour and Social Security Law]. Moscow: Prospect, 2011. p. 255 – 262.
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