NEW LABOR CODE IN PREPARATION.

Some 3,500 workers demonstrated in Yekaterinburg on February 3 to demand payment of overdue wages and better legislation on workers’ rights. (Itar-Tass, February 3) The federal government has already said that the adoption of a new labor code is one of its main priorities for 1998. The Ministry of Labor is drafting a new code to bring federal legislation into line with the new economic relations that have taken shape since Russia launched its reforms.

Russia’s present labor code was adopted as recently as October 1992. Essentially a revamp of the Brezhnev-era code rather than a complete overhaul, it is — despite having been amended since 1992 — out of touch with today’s conditions. The result: Today’s workers are not adequately protected. They have little redress against either the widespread nonpayment of wages or the unpaid leave they are forced to take when their factories suspend operations. When companies do pay, many force employees to accept their wages in barter. Strikes — virtually the workers’ only weapon — are ineffective in such circumstances. The U.S. State Department’s 1997 human rights review says that a small but increasing percentage (perhaps 6 percent) of Russian workers sought redress for nonpayment of wages through the courts in 1997. This, however, is a lengthy process and forcing enterprises to make good on wage arrears, even with a court order, remains difficult.

Employers also are inadequately protected by existing legislation. Enterprises needing to modernize their facilities and restructure their work force find themselves faced with numerous legislative hurdles that make both worker layoffs and reassignments at best difficult. In these circumstances, workers looking for alternatives run into legislative problems here as well. Russia’s system of residence permits (see following story) and its underdeveloped housing market hamper those who might otherwise relocate to areas with better job prospects. The resultant labor market inflexibility has serious consequences for everyone — especially in that it is such a strong deterrent to investment. (Izvestia, January 6)

Residency Ruling Has Far-Reaching Implications.