Alexeyev V.S.

Oles’ Honchar Dnipropetrovsk National University (Ukraine)

COLLECTIVE BARGAINING AGREEMENT IN UKRAINE

Against the backdrop of the global financial crisis, major companies in Ukraine are looking for optimal solutions to mitigate the expenses and production costs to allow their business to stay afloat. Surprisingly the collective bar­gaining agreement being intentionally omitted by employers in most instanc­es can provide such an effective solu­tion to be taken into consideration. This article provides a general overview of collective agreement regulations in Ukraine focusing on all the above-mentioned solutions and instruments set out by means of a col­lective bargaining agreement as well as on a number of standard issues of huge interest to both employers and employees.

Ukrainian legal regulation of collec­tive bargaining agreements is set out by the Code of Labor Laws of Ukraine (CLLU), the On Collective Agreements and Contracts Act of Ukraine (CAA), the On Remuneration of Labor Act of Ukraine (Labor Remuneration Act), the On Settlement of Collective Labor Disputes (Conflicts) Act of Ukraine and other national laws and by-laws. Furthermore, as far as Ukraine is a member state of the International Labor Organization (ILO), the following international instruments apply to regulation of collective bargain­ing agreements in Ukraine: the Right to Organize and Collective Bargaining Conven­tion No.98 (Convention 98), the Collective Bargaining Convention No.754 (Convention 154) and the Collective Agreements Recom­mendation No. 91 (Recommendation 91).

The conclusion of a collective agree­ment is preceded by collective bargain­ing which constitutes one of the core instruments for employees and trade unions to negotiate the basic employment terms with an employer. Article 4 of the ILO Convention No.98 defines it as "voluntary negotiation between em­ployers or employers' organizations and workers' organizations, with a view to the regulation of terms and conditions of employment by means of collec­tive agreements.

Bargaining employees are often rep­resented by a trade union or other la­bor organization (council). Namely, an employer (its authorized body) and one or several trade unions of employees are parties to the collective agreement resulted out of the said collective bar­gaining. If no trade union exists, employees may also be represented by a labor council or representatives to negotiate, draft and sign a collective agreement with an employer.

Ukrainian legisla­tion envisages liabilities for avoid­ance of participation in a collective bargaining. Thus, the representatives of the employer or trade union (la­bor collective) avoiding participation in the collective bargaining (nego­tiations) as to drafting, changing, or amending of a collective agreement or violating the terms and procedures set out by the parties to the collective bargaining shall be liable to a penalty amounting to 10 untaxed citizens' minimum incomes and are subject to disciplinary responsibilities, includ­ing dismissal.

         Collective (labor) agreements are con­cluded at all companies (legal entities) employing labor with trade unions or oth­er employees' organizations in order to regulate production, labor, and social and economic relations and to coordinate the interests of employees and employers. It’s provisions shall be bind­ing on the em­ployer and apply to any and all employees of the company.

        

Collective agreements shall provide the main terms and conditions of em­ployment and mutual obligations of the parties in respect of regulation of produc­tion, labor, social and economic relations, in particular:changes in the production and labor organization; measures secur­ing effective employment; rate and wage setting the form, system and volume of the payroll and other labor payments (bonuses, benefits, premiums, etc.); guar­antees, compensations, benefits; par­ticipation of the labor collective in the formation, allocation, and utilization of revenues (if so provided by the charter); operating mode, working hours, lunch time, days-off, etc.; working conditions and labor protection; housing, consumer, cultural facilities, healthcare, rest and recreation; guarantees of trade union performance or activities of other organi­zations representing the employees; con­ditions for the regulation of the payroll fund and qualification/position wage ratios; ensuring equal rights and oppor­tunities for men and women.

The above list is not exhaustive and in addition thereto a collective agree­ment may also provide for any addi­tional guarantees, social and communal benefits as appropriate. At the same time, the terms and conditions of a col­lective agreement worsening the condi­tion of employees, compared to valid Ukrainian legislation are invalid.

A collective agreement shall come into force on the date of signing by the representatives of the contracting par­ties or on the date set out therein. Once signed, such a collective agreement is subject to be filed with district state administrations, executive committee of village, town and city councils. A collective agreement remains in force until the date (term) provided therein, irrespective of the date of registration of such a collective agreement.

Pursuant to Article 41-2 of the On Administrative Violations Code of Ukraine the representatives of the employer or trade union or other bodies appointed by the labor collective violating or fail­ing to perform the term and conditions of the collective agreement shall be lia­ble to a penalty - from 50 to 100 untaxed citizens' minimum incomes (that’s from UAH 850 to 1,700).

 

Even in the terms of unfavourable fi­nancial conditions, the collective agree­ment concluded in compliance with Ukrainian legislation and with regard to actual manufacturability of a compa­ny and its needs, can be an effective in­strument enhancing the stability, high-productivity and proficient accounting of a company as well as ensuring labor rights and protecting the social guaran­tees of employees. Peer social partner­ship based on a collective agreement provides a dialog producing a fair solu­tion in any crisis situation and helping to avoid labor disputes and conflicts at an enterprise.