Observation (CEACR) - adopted 2010, published 100th ILC session (2011)

Protection of Wages Convention, 1949 (No. 95) - Ukraine (Ratification: 1961)

Article 12(1) of the Convention. Regular payment of wages. The Committee recalls that the wage arrears situation in Ukraine was again examined by the Conference Committee on the Application of Standards at the 99th Session of the International Labour Conference (June 2010). In its conclusions, the Conference Committee expressed deep concern about the worsening wage crisis and requested the Government to provide updated information for the present session of the Committee of Experts concerning: (i) concrete measures to improve the application of the Convention in practice and the results achieved, including statistical information on the wage arrears situation; (ii) the activities of the labour inspection services or other monitoring bodies with regard to wage protection; (iii) any developments concerning the adoption of the law on the protection of workers’ wage claims in the event of the employer’s insolvency; and (iv) the working conditions, including pay conditions, prevailing in the mining sector.

The wage arrears situation. The Committee notes that according to the State Statistics Committee of Ukraine, the total amount of wage arrears as of 1 July 2010 stood at 1.79 billion Hryvna (UAH) (approximately 166.7 million euros). By sectors of economic activity, the industrial sector represents 52.8 per cent of the total amount of wage arrears, construction represents 15.8 per cent and transport and communication 8.5 per cent. As regards the structure of the wage debt, nearly 70 per cent from the total amount belongs to economically active enterprises and 30 per cent to bankrupt or inactive enterprises. The Committee also notes that based on figures presented at the national tripartite Conference on “Recovering from the crisis: Implementing the Global Jobs Pact in Ukraine” held in Kiev in May 2010, wage arrears increased 2.5 times in 2008 and 2009, and the situation apparently continues to worsen.

The Government indicates that the situation is constantly scrutinized by interim commissions which have been created within executive and local municipal bodies to deal with the repayment of wage arrears. Since the beginning of 2010, these commissions held 5,185 sessions during which 16,643 heads of enterprises were warned about the disciplinary liabilities, 94 contracts were terminated and 3,797 other measures were taken. The Government further indicates that the results of these activities are frequently discussed in targeted meetings of the Cabinet of Ministers, often with the participation of the social partners. Moreover, the Government indicates that on 11 August 2010, the Ministry of Labour drafted and approved a decree on a plan of urgent measures for the repayment of wage arrears. The Committee asks the Government to describe in detail the urgent measures envisaged in the Decree of 11 August 2010 and to provide concrete information on its practical implementation. The Committee would appreciate receiving a copy of that Decree. More generally, the Committee asks the Government to keep the Office informed of the evolution of the situation and to report on any new measures or initiatives aimed at resolving the wage crisis in the country.

Labour inspection activities. The Committee notes the Government’s indications concerning the activities of the State Department for the supervision of observance of the labour legislation (Gosnadzortuda) in the field of wage protection. According to the Government’s report, Gosnadzortuda controls the observance of the implementation of Presidential Decree No. 292 of 2001 on urgent measures aimed at accelerating the repayment of wage arrears and of Presidential Decree No. 576 of 2004 on urgent measures for completing the settlement of wage arrears. Since the beginning of 2010, Gosnadzortuda and its regional bodies carried out 5,831 inspections in 4,598 indebted enterprises, and drew up 3,947 reports of administrative offences. Overall, some 6,095 officials of indebted enterprises were found administratively liable for non-payment of wages and a total amount of UAH2.4 million (approximately 225,000 euros) of punitive sanctions was imposed by courts and labour inspectors. With specific reference to the situation in the Lugansk region and the state enterprise “Luganskugol”, the Government indicates that in 2009–10, this enterprise and its separate subdivisions were inspected on 36 occasions which revealed numerous violations of the labour legislation, including non-observance of applicable minimum wage levels. The Committee asks the Government to continue supplying up-to-date statistics on labour inspection results and all other activities aimed at ensuring compliance with national laws and regulations on wage protection.

Draft legislation on workers’ protection in insolvency – Pay conditions in the mining sector. The Committee notes that the Government’s report does not contain any information concerning the process of adoption of new legislation on the protection of workers’ wage claims in the event of the employer’s insolvency, to which reference was made by a Government representative at the Conference Committee discussion of June 2010. Similarly, the Government’s report does not elaborate on the working and pay conditions in the coal industry which experiences considerable difficulties and is undergoing restructuring. Referring to the conclusions of the Conference Committee on the Application of Standards, the Committee again asks the Government to: (i) indicate any further developments concerning the preparation of new legislation aimed at modernizing existing legislation on the protection of workers’ claims in the event of insolvency proceedings; and (ii) provide an updated account of the employment situation in the mining sector, particularly as regards the prevailing working conditions and the regular payment of wages.

The situation in the Lugansk region and the Nikanor-Nova mine. The Committee notes the comments of the Independent Trade Union of Miners (ITUM) of the Nikanor-Nova coalmine, dated 27 July, 22 October and 1 November 2010, concerning ongoing wage problems in the Nikanor-Nova coalmine. According to ITUM, there is deliberate and systematic non-compliance with labour legislation in force and applicable minimum wage standards and, as a result, workers are deprived of the possibility to earn a decent living. In addition, ITUM considers that as of July 2010, the minimum monthly wage for workers engaged in underground work should be UAH1,129 (instead of UAH888 currently paid) and UAH1,042 for all other workers. In its reply dated 11 October 2010, as well as in its reply to earlier comments made by the Confederation of Free Trade Unions of the Lugansk Region (KSPLO) on the same issue, the Government indicates that the Lugansk regional state inspectorate continuously monitors coal mining enterprises and has frequently detected violations of the labour legislation, including payment of wages at a rate below the applicable minimum wage. The Government further indicates that all inspections are carried out with the direct involvement of KSPLO representatives and that managers who permitted such violations have been charged with administrative offences.

Finally, the Committee notes that the Government has requested the Office to undertake a technical assistance mission with a view to better understanding the current wage debt situation. The Committee understands that this mission is now planned for early 2011 to be followed by a national tripartite event on the timely and full payment of wages. It hopes that the mission will give an opportunity to review and evaluate the wage arrears situation and trusts that the Office will seek to address pending issues and hold separate meetings with government authorities, institutions or services, employers’ and workers’ organizations – including the KSPLO – and other associations interested in the matters in question.