Observation (CEACR) - adopted 2018, published 108th ILC session (2019)

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

The Committee takes note of the observations submitted by the Federation of Trade Unions of Ukraine (FPU) in 2017 concerning the wage arrears situation in the country, and of the response of the Government in this regard. It also takes note of the observations from the Confederation of Free Trade Unions of Ukraine (KVPU) received on 31 August and 29 October 2018, concerning the same issue.

Follow-up to the recommendations of the tripartite committee (representation made under article 24 of the ILO Constitution)

The Committee notes that in March 2017, the Governing Body approved the report of the tripartite committee set up to examine the representation submitted by the FPU, the KVPU, the Federation of Transport Workers’ Trade Unions, the Association of All-Ukrainian Autonomous Trade Unions, the Association of All-Ukrainian Trade Unions and Trade Union Associations “Iednist”, and the Federation of Trade Unions of Small and Medium Business’ Workers of Ukraine, under article 24 of the ILO Constitution (document GB.329/INS/20/2). Noting that the representation concerned the wage arrears situation in the country, the Committee will examine the follow-up given to the recommendations of the tripartite committee under Article 12 below.

Article 12 of the Convention. Regular payment of wages. Settlement of wages at termination of employment. Wage arrears situation in the country. Both the Committee in its previous comments and the Governing Body in its decision on the representation requested the Government to pursue its efforts to address the issue of wage arrears. The Committee notes that the Government indicates in its report that, while several initiatives have been introduced to tackle the problem, wage arrears in the country have increased since 2016, due to the difficult economic situation and the armed conflict in the East. The Committee also notes that the KVPU indicates that, despite the legislative arsenal in place, wages arrears have increased in recent years. The Committee recalls that the application of Article 12 in practice comprises three essential elements: (1) efficient control and supervision; (2) appropriate sanctions; and (3) the means to redress the injury caused, including fair compensation for the losses incurred by the delayed payment (2003 General Survey on protection of wages, paragraph 368).

With regard to efficient control and supervision, the Committee notes that the Governing Body requested the Government to adopt without delay all necessary measures to ensure the effective monitoring of the payment of wages by the labour inspection services. The Committee notes the information provided by the Government on the inspections conducted by the State Labour Service and its territorial directorates on the payment of wages, resulting in the issuance of instructions to remedy the situation, the referral of certain cases to law enforcement agencies and administrative courts, the imposition of sanctions, and the payment of a portion of the wage arrears. On the other hand, the Committee notes that the KVPU considers that the state bodies that control and supervise the application of the relevant legislation do not work effectively. Emphasizing the importance of properly functioning labour inspection services capable of identifying breaches of wage legislation and prosecuting offenders for the implementation of Article 12 (2003 General Survey, paragraph 369), the Committee refers to its comments on the application of Conventions Nos 81 and 129.

With regard to the imposition of appropriate sanctions, the Committee notes that the Governing Body requested the Government to adopt without delay all necessary measures aimed at the full implementation of the Convention, including sufficiently effective and dissuasive sanctions to prevent and punish infringement. In this respect, the Committee takes note of the Government’s indications that: (i) section 41 of the Code of Administrative Offences, section 265 of the Labour Code and section 175 of the Criminal Code provide for penalties for the delayed payment of wages; and (ii) a series of measures have been adopted by the Cabinet of Ministers, including the increase of the fines applicable to managers in law enforcement departments that have tolerated wage arrears, and the limitation of bonuses received by managers of public enterprises that experience wage arrears. The Government also provides detailed information on the amounts of the administrative fines and financial penalties imposed in 2016 and 2017 for delays in the payment of wages. On the other hand, the Committee notes that the KVPU considers that the legislation on the liability of employers is not applied in practice. The Committee requests the Government to provide its comments in its respect.

With regard to the means to redress the injury, the Committee notes that the Governing Body requested the Government to ensure that all workers affected by wage arrears receive appropriate compensation. The Committee notes the Government’s indications that: (i) on 22 July 2016, the Cabinet of Ministers adopted a plan of urgent measures for the payment of wage arrears (Oder No. 517-p); (ii) investigations are being conducted in follow-up to individual complaints; and (iii) a number of cases of wage arrears are referred to local courts. The Committee also notes that the FPU and the KVPU both indicate that court decisions on the payment of wage arrears are not being implemented. The KVPU further reports that workers have difficulties exercising legal remedies, in particular because of their lack of legal awareness and financial resources to cover attorney fees. The Committee requests the Government to provide its comments in this respect.

Wages arrears in the shipyard industry. The Committee notes that the FPU reports that wage arrears have further increased in one of the three shipyards referenced in the representation examined by the Governing Body. In this respect, the Government indicates that: (i) an inspection visit had been conducted in the shipyard concerned in March 2018 which evidenced violations of the legislation on the payment of wages; and (ii) following this inspection, the managing director of the shipyard was ordered to address these violations, an offence report was established, and the results of the inspection were transmitted to the regional office for a decision on the imposition of a fine. The Committee takes note of this information.

Wages arrears in the coal-mining industry. The Committee notes that the KVPU indicates that wage arrears are particularly prevalent in state-owned coal-mining enterprises. Specifically, the KVPU alleges that wage arrears situations have led to a series of protest actions in the provinces of Donetsk, Luhansk, and Volyn, including a case of self-immolation, hunger strikes, and miners’ refusals to be lifted up from the mines, causing severe health repercussions. The Committee notes that the Government did not reply to these serious allegations. The Committee requests the Government to provide its comments in this respect.

The practice of “envelope wages”. In its previous comments, the Committee requested the Government to take measures to eliminate the practice according to which workers are forced to agree to the undeclared payment of wages “in envelopes”, resulting in the non-payment of the corresponding social contributions. Noting that the Government does not provide information in this respect, the Committee is bound to reiterate its previous request. It requests the Government to provide information on the measures taken in this respect.

Finally, the Committee notes that the Governing Body encouraged the Government to fully involve the social partners in the search for solutions to the problem of wage arrears. Recalling that bringing the accumulation of wage arrears to an end requires continuous dialogue with the social partners (2003 General Survey, paragraph 374), the Committee requests the Government to fully involve the social partners to find solutions to the issue of wage arrears and to ensure the regular payment of wages. The Committee also reminds the Government of the possibility to avail itself of ILO technical assistance in this regard.

The Committee notes that in application of the new reporting cycle for technical Conventions adopted by the Governing Body at its November 2018 session, the Government will be requested to send a report on the application of the Convention in 2019.

The Committee is raising other matters on the application of ratified Conventions on wages in a request addressed directly to the Government.