Chumachenko Yu., Chumachenko А. New Kazakhstan’s Law on Trade Unions: What Is of Importance for Employers. // Oil & Gas of Kazakhstan. – 2014. № 5. – с. 155–161.
Published in Oil & Gaz of Kazakhstan 5, 2014
Improving the mechanism of social partnership in Kazakhstan is one the state's priority areas of development. Obviously, the effective dialogue between the employer and employees significantly affects the social climate and stability, both at the enterprise and in the society in general. Certain events of the recent years in Kazakhstan have demonstrated the trade-unionist institutes' incapacity to play the role of an efficient instrument to prevent and resolve labor disputes, and corroborated the necessity of decisive steps towards the trade union movement modernization. In this connection, the year 2014 witnessed important steps to improve the Kazakhstan's legislation, specifically, enactment, starting 12 July 2014, of the RK Law on Trade Unions.
It should be mentioned that the Law has caused an ambiguous reaction in the legal community and gave rise to many questions regarding its compliance with the international law rules. Nonetheless, since the Law and other updated legislation establish new regulations in respect of different trade union and labor relations issues, it is necessary to correctly understand and observe them.
In view of the above, we would like to draw the employers' attention (including those active in the oil and gas sector, which is characterized by hard labor conditions and is constantly under the labor inspection's and other controlling authorities' close attention) to the most significant aspects of the updated legislation, including to the powers of trade unions at the territorial and sectoral levels, specifics of labor of the heads of trade union bodies, procedure for election of their representatives by the employees, new forms of state control over employer activities, and a number of other important issues.
Trade Union Members
The new law keeps former approaches to the creation of trade unions as public organizations based on the principles of voluntary participation for the purposes of representing and protecting its members' labor and socio-economic rights and interests. The Law provisions apply to the citizens of Kazakhstan (including those travelling on business outside the Republic), foreign citizens and stateless persons residing and working in Kazakhstan.
Sector-Based Formation of Trade Unions
The new Law reforms the system of trade unions, providing for their formation exclusively according to the production-and-sectoral principle. Thus, it is now impossible to have the workers united in cross-sectoral organizations.
The Law also introduces the concepts of local and industry trade unions. The local trade union is an association of workers from one or more organizations connected by common production and professional interests, i. e., an organization created at the local level and included in the industry trade union. An industry trade union, in its turn, unites at least half of the total number of employees in one sector of activities, related industries and local trade unions and is a member organization of the nation-wide association of trade unions.
There are obvious advantages of creating a trade union at the industry level, which allows representing employees' interests not just in the framework of one enterprise, but taking account of the specifics of a particular industry and its labor conditions, which, given the professional body's independent status, its responsible attitude towards the interests to its represented employees, and provided there is a proper activity of the trade union members themselves, would provide for ensuring their most effective protection.
Such legislative decision had a practical underlying basis. For example, in 2013, the Council for Social Partnership Development and Labor Disputes and Conflicts Settlement of KazMunaiGas National Company JSC (KMG) launched an initiative to create a unified and vertically integrated sectoral trade union of the oil and gas industry with the status of national public association. On 8 September 2013, Astana hosted a founding congress of the Republic's Public Association Sectoral Trade Union of the Oil and Gas Industry Employees attended by the representatives of professional associations of the KMG enterprises engaging in the exploration, production and transportation of oil and gas and oil processing, as well as active in the servicing sector. At the moment, the trade union of the oil and gas complex employees is a member of the Trade Unions Federation of the Republic of Kazakhstan and unites more than 30 thousand employees.
Specifics of Trade Union Members
The legislation originally provided for additional measures to protect the employees who are trade union members. First of all, it is a provision that the employment agreement with an employee being a trade union member can be terminated, in case of organization's staff reduction or jobs displacement, or on some other grounds, only if a motivated opinion of the trade union body is in place.
Now the Labor Code is added with a new chapter governing the specifics of labor of the employees who are members of the trade union bodies. In particular, the members of trade union elective bodies who are not released from their principal work:
- cannot be subjected to disciplinary sanctions without a motivated opinion of the trade union body whose members they are;
- are released from their principal work in order to perform public duties in the interests of their union members for the period of trade union training, participation as delegates in congresses (conferences) convened by trade unions and participation in the work of their plenums and presidiums.
Employees' Representatives and Their Election Procedure
Pursuant to the legislation previously in effect, in case an organization had no trade union, its employees' representatives could become individuals or legal entities elected by the employees in accordance with the relevant procedure. However, no normative legal act was determining the special procedure for such representatives' empowerment by employees. Hence, applicable were the general civil law norms regarding representation and the representatives' powers were formalized by way of the powers of attorney. However, given the scope of many enterprises and their collectives sometimes counting hundreds or even thousands of employees, to have the power of attorney executed by each employee is technically very complicated and time-consuming. Therefore, the practice was such that the labor collective would hold a general meeting and adopt a resolution to elect these or those persons (most often, the activists on staff of that enterprise) as representatives.
Now, this practice has been legalized and the legislatively updated definition of the "employees' representatives" institute says that the employees' representatives may be trade union bodies, and in case of their absence – elective representatives elected and empowered by the employees at the general meeting of employees by the majority vote of participants, provided at least two thirds of the employees are in attendance.
Still, even after the legislative revisions, a number of employee representatives-relevant issues remain open. Specifically, it is still unclear how those employees who have not, for these or those reasons, attended the meeting (since the statutory quorum allows for presence of two thirds of the collective at the meeting), or the newly hired employees joining the company after such meeting will be represented. Would such employees have to submit to the labor collective's resolution or would they need to confirm their agreement with such resolution? What would be required for that – to file an application for joining to the labor collective's resolution or to express one's position is some other manner? Or would the labor collective's resolution, if the quorum and voting procedure have been met, cover those employees automatically?
The general meeting convocation and holding procedure is still unregulated in detail. The legislator has limited itself to the definition of the required quorum and the number of votes for adopting the resolution electing the employees' representatives, leaving all procedural aspects unregulated.
For example, remaining unresolved are the issues of notification about the upcoming meeting and possible deadlines for such notification, necessity to elect the chairperson and secretary of the meeting, formation of the counting commission, keeping and execution of minutes, possibility to vote by correspondence (for example, via sending an e-mail message signed by a digital signature in order to impart such message complete legitimacy) and other procedures. These questions are particularly relevant for large companies, having structural subdivisions in different regions of Kazakhstan and abroad, where it is almost impossible to get all staff together for a general meeting.
According to the Kazakh law theory, in order to fill the existing gaps, when exercising civil relations it is allowable to use the law and legislation by analogy. Bearing in mind the close connection of labor and civil relations, we assume that in the case under consideration the said principle may be applicable to the procedure for holding the labor collective meeting; hence, it is possible to apply by analogy the rules governing the procedure for holding the general meeting of participants (shareholders) at legal entities. We see as one of the ways to resolve all the above issues to have the necessary procedures defined in detail in a company's internal document.
New Forms of State Control over Employer Companies
The Conception of Kazakhstan Social Development until 2030 sets a task to bring by 2016 the labor inspection work methodology in line with the World Labor Organization's Convention No. 81 "Concerning Labor Inspection in Industry and Commerce" ratified by the RK Law of 7 May 2001. This means that a labor inspector will have an opportunity to visit enterprises without warning, which would allow best protection or employees' labor rights.
Moreover, the state control in labor sphere will be optimized by way of employers' voluntary declaration of labor conditions compliance, which, alongside with toughened liability for labor legislation violations, would lessen the number of state labor inspections of enterprises.
The first steps to implement the above state program were made in the framework of legislative changes being introduced in connection with the Law adoption: introduction of control in the form of visits of companies by labor inspectors and the employers' starting in practice to voluntarily declare compliance of their existing labor conditions with statutory requirements. Visit
The Labor Code was added with norms regarding labor inspection's control over employer company activities in the form of a visit. If visiting, labor inspectors do not need to notify the employer in advance and register with the authorized agency for legal statistics and special records, as stipulated for scheduled and off-schedule state inspections. The visit duration cannot exceed one day.
According to the visit results, the labor inspector draws up an act of visit results, without instituting administrative violation proceedings, but with obligatory explanation of the procedure to eliminate the violations identified in the course of the visit to the visited entity.
Voluntary Declaration
Voluntary declaration is widely practiced abroad: if an enterprise declares that it will create working conditions that meet the standards, undertakes to timely pay salaries, additionally provide certain material support in case of hard work and comply with occupational safety standards, then the voluntary declaration before the employee and the society makes it possible to reduce inspections.
In 2013, the Ministry of Labor and Social Protection launched a pilot project to implement the voluntary declaration in four Kazakhstan oblasts – Almatinskaya, Pavlodarskaya, Kyzylordinskaya and East Kazakhstan. The first results were announced on 30 July 2014 at the enlarged board session attended by the heads of the Ministry's central office structural subdivisions and deputy Akims of 14 oblasts and cities of Astana and Almaty, as well as the heads of regional administrations for employment and social programs coordination and labor inspections. In the first half of the year 2014, nineteen enterprises performed the voluntary declaration of occupational health and safety compliance and received a "Certificate of Confidence" releasing them from scheduled inspections for three years. These enterprises include the companies operating in the oil and gas sector, for example, Pavlodar Petrochemical Plant.
Structuring the labor relations, including issues of trade union establishment, election of employees' representatives, coordinating with them the respective employer's acts, collective bargaining, labor dispute resolution, etc., is always a fairly complex process for employers and employees, including from the legal standpoint. Therefore, success directly depends on the company's having a qualified lawyer or an independent legal advisor to help it make all the necessary preparatory steps to ensure that this process is accomplished with best results.