Labor regulations and protection of Employment Rights in post-communist countries
Are Employment Rights adequately protected among the former Soviet Countries, Eastern Europe, the Caucasus and Asia?
Master's Thesis 2016 44 Pages
Chapter 1. Impact of the Legal and Economic Systems in the Union of Soviet Socialist Republics on Labor Market of the Former Soviet Countries.
Chapter 2. Protection of employment rights among the Eastern European countries.
Chapter 3. Protection of employment rights in the Caucasus: Azerbaijan, Georgia and Armenia.
Chapter 4. Protection of employment rights in Asia (Central Asia).
Chapter 5. Comparison of specific violations of employment rights in post- communist countries.
1. Conclusion and Recommendations
2. List of Sources
This master thesis encompasses the analysis of labor regulations, protection of employment rights and accordingly arising problems in post-communist countries. As many different aspects can be identified within Soviet and post-Soviet periods, this master thesis explains the main problems of labor markets in post-communist area: specifically, among Eastern European, the Caucasian and Asian countries (Central Asia). First of all, the research was made in regard to the reasons influencing the main problems occurring from the employment rights protection in the above mentioned countries. Some of the countries face very similar challenges and deal with much alike problems, however some of the countries have developed much more significantly and achieved higher efficiency in the field of employment rights protection. The author of the master thesis tries to indicate the main grounds for such different levels of development in chosen countries. The analysis was made in regard to the free market economy and opportunities each of the countries had after their independence, specifying the major problems in each of them and identifying factors which lead Eastern European countries to faster development than the others. The question was raised whether people should blame only Russian imperialism or, whether the Caucasian or Asian nations are less hard-working or not enough educated to develop their countries? Therefore, the attempt was to analyze the principal hermeneutical and historical reasons of these problems from the period of former Union of Soviet Socialist Republics (hereinafter - USSR) to modern independent democratic post-Soviet countries. Without the analysis of the mentioned periods it would be more complicated to identify some useful approaches to define the problems and to try to find effective ways to solve them. The performed research showed that there was a strict discrimination by Russian government to the other nations and these political repressions diminished employment skills and defeated their legal rights on behalf of socialism or communism dreams which never occurred in reality. Many poorly skilled people in these countries work for a very low salary, under the unsafe conditions, without any certainty and guarantees which place employees in a much more stressful and unpleasant environment. The master thesis discloses such problematic areas of employment rights protection as violations of a person’s right to find a job, informal or illegal employment problems, discrimination, healthy and safe work environment violations and others. Additionally, the recommendations in regard to possible amendments of employment legislation ensuring the adequate protection of rights of employees are suggested.
Šiame magistro darbe buvo atliekama darbo teisinių santykių, jų subjektų teisių apsaugos bei iš šių santykių kylančių problemų analizė posovietinėse valstybėse. Atlikus analizę buvo nustatyta gausybė skirtumų darbo teisinių santykių srityje sovietiniu ir posovietiniu laikotarpiais. Šis magistro darbas atskleidžia esmines teisines darbo rinkos problemas posovietiniame regione: Rytų Europos, Kaukazo ir Azijos valstybėse (Vidurio Azijos). Magistro darbo tikslas buvo identifikuoti ir išanalizuoti pagrindines darbo santykių subjektų teisių apsaugos problemas ir jų kilimo priežastis anksčiau minėtose valstybėse. Tyrimas parodė, kad daugelis jų įvairiose šalyse yra panašios, tačiau taip pat verta konstatuoti, kad skirtingas valstybių išsivystymo lygis lemia ir skirtingą požiūrį į darbo teisinius santykius. Šiame darbe buvo bandoma atskleisti kaip įvairiose šalyse po nepriklausomybės paskelbimo skirtingas išsivystymo lygis lėmė skirtingas galimybes darbo rinkoje bei įtakojo darbo santykių teisinį reglamentavimą. Darbe keliamas klausimas ar iš esmės lėtesnis kai kurių šalių vystymosi lygis buvo įtakotas Rusijos imperializmo, ar Kaukazo ir Azijos valstybių piliečių mažesnio darbštumo, nepakankamo išsilavinimo? Taigi, pasitelkiant rašytinius ir istorinius šaltinius, buvo bandoma išanalizuoti šių problemų priežastis nuo SSSR laikotarpio iki šiandieninės modernios, nepriklausomos, demokratiškos posovietinės valstybės. Neįvertinus šių istorinių laikotarpių ir jų nulemtų tam tikrų procesų, būtų buvę sudėtinga nustatyti efektyvius būdus problemoms identifikuoti ir rasti tinkamus būdus jas galutinai išspręsti. Nagrinėjant buvusią SSSR, yra akivaizdu, kad Rusijos valdžia vykdė griežtą diskriminavimo politiką kitų tautų atžvilgiu. Taigi, šios politinės represijos turėjo neigiamos įtakos kai kurių tautų darbo santykiams, darbuotojų gebėjimams ir jų teisėms. Šiose šalyse galima rasti labai daug žemos kvalifikacijos darbuotojų, kurie dirba už itin mažą atlyginimą, nesaugiose darbo sąlygose, be garantijų ir ateities užtikrinimo, kas sukelia darbuotojams dar daugiau streso. Šiame magistro darbe yra analizuojamos tokios darbo santykių problemos, kaip teisės į darbą pažeidimai, diskriminavimas, saugių ir sveikų darbo sąlygų užtikrinimo pažeidimai ir kitos. Darbe taip pat pateikiami pasiūlymai ir rekomendacijos dėl darbo santykių teisinio reguliavimo tobulinimo, kas padėtų užtikrinti didesnį skaidrumą bei darbuotojų teisių apsaugą.
Labor is a value which is created by a human being’s effort. It presents goods or services demonstrated during the production of the human resources. So, employment is very important concept in all over the world. During the employment process there are some kinds of rights and obligations of the people: employees and employers in accordance of the labor legislation. Unfortunately, in some countries, especially, in the former Soviet or post-communist countries these rights which were created based on the law are violated because of various reasons and most of these problems keep continuing without any developing progress or finding effective adequate solutions to solve these problems and protect the employment rights. In this master thesis, some kinds of violations of employment rights, for example, violations of a person’s right to find a job which ensures him to get a work opportunity out of informal or illegal employment (work for someone without an employment agreement or work not legally) or to employ a person without any age, gender and ethnic discriminations providing with a healthy and safety work environment, are analyzed with being indicated throughout their reasons and supported with some recommendations to prevent these violations and protect employment rights of the people.
Aim of this master thesis. Aim of this master thesis is to make a comparative analysis of employment rights regulation in post-Soviet countries, identify their violations and define problems arising from their protect.
Objectives of this master thesis. Objectives of this master thesis are:
a. To disclose the impact of the negative effects of the traditional legislation and bureaucratic system of the Union of Soviet Socialist Republics and amendments after 1990s in new transition labor legislations of post-communist countries;
b. To present the analysis of employment rights regulation in post-communist countries and to identify the main problematic areas.
c. To specify widespread violations of employment rights are in post-communist countries;
d. To provide analytical solutions to these violations to protect employment rights in all these countries.
In this master thesis, the differences among these objectives are interpreted by different authors and statistical indicators. In addition to this, there are briefly talked about economic, political and other juridical reasons, which influence on development of all these countries’ employment relations.
Hypothesis of the master thesis. Hypothesis of this master thesis is to indicate that the protection of employment rights in the former soviet countries is not ensured sufficiently. Methods of the master thesis. In this master thesis, historical method was pointed out to identify some common historical aspects which explain how and when the former USSR had been created. And the thesis explained the negative side effects of the planned or command economic system on labor market after 1990s - collapse of the USSR.
In this thesis, some statistical information is provided related the labor condition of the transition period in the post-Soviet states by statistical method. So, this information will also help to see the problems visually, also differences and some developments in these countries from past to the present time.
The comparative - analyze method that mostly is preferred in this thesis which depends on generalization and statistical analyze methods. After apprising general information about the labor markets conditions of these states, especially after the 1990s, their position as independent postcommunist countries, it was given statistical information about them.
In the thesis, the main question is “Whether the employment rights is protected in the former Soviet Union countries: Eastern Europe, the Caucasus and Asia”? It is clear that these regions have their own administrative systems and the cultural differences that indicate these facts create a lot of variations, actually, even though, in employment attitudes. Therefore, in this master thesis, it was attempted to analyze and find effective solutions to prevent significant violations and protect the employment rights among these countries. The thesis intended to recommend some effective ways to develop the protection of the employment rights in these countries.
CHAPTER 1 Impact of the Legal and Economic Systems in the Union of Soviet Socialist Republics (hereinafter - USSR) on Labor Market of the Former Soviet Countries.
“ On July 10, 1918 the 5th All-Russian Congress of Soviets adopted the Constitution of Russia which declared the right and duty to work for all citizens. 1 Pursuant to this the All-Russian Central Executive Committee approved the Code of Labor Laws and the "Regulations on employment record books" as an Appendix to the Article 80 of this Code. 2 ”
This Constitution was the first initiative for the future USSR Constitutions that approved in 1924, 1936 and 1977. Its principles were the main objectives for the following socialist constitutions. In accordance of these constitutions the planned or command economic system accepted instead of free market or capitalist system. It means all decisions related with production or investment were organized in a specific plan that prepared by a central authority or government agency. After some years, there were a lot of negative side effects of this system in labor. For instance, in future people began to show less interest to work hard, because there was no motivation and everything was controlled by the state. Instead of this, there could be mixed (centralized and free) market system which made it easier to control or give equal opportunities to develop and create a free competition. Because of this demotivational working tradition, after the collapse of USSR, 15 new independent post-Soviet countries kept their impact on their labor market negatively and these negative effects continue to nowadays.
Although the Soviet legislation supported “the right and duty to work for all citizens ” 3 , the economic condition of the country was less than the expectations. In spite of this, the government tried to show the fake statements to the world which were presented false information about the states real or true economic condition. The government tried to hide the reality even from its own citizens and persuade them that the country was developing more than “pure” Western countries. However, there was significant difference between official state statistics and the other statistics regarding the real position of the USSR. (Figure 1).
illustration not visible in this excerpt
In Figure 1, it is clearly seen that Soviet “Planned and Command” economy was quite different from reality. Specially, at the beginning of USSR, we can compare Official Statistics and The Central Intelligence Agency's (CIA5 ) and revised estimates by professor G.I.Khanin6 helped to disclose the Soviet economy which was a just big illusion. Because USSR was a country with full of fake dreams, like Utopia by Thomas More which had never been realized.
Unfortunately, this negative state tradition nowadays keeps continuing in the post-communist states, specially, in the Caucasian and Central Asian countries. This problem encumbers to see all violations transparently and solve them. Therefore, some post-communist which was declared itself like a developing and rich country with increasing economic power bankrupted when the oil prices ultimately decreased. And it caused with a lot of redundancies in work environment in these countries, like the Republic of Azerbaijan. Additionally, one of the negative sides of this, most of the companies dismissed employees with different reasons (for example, expiry of the period of the contracts), so there were a huge violation of the employment rights in this condition. Most of the people did not get any compensation. On the other hand, the remained employees who kept working were overloaded with at least 2 positions instead of the dismissed ones. Unfortunately, these employees had no choice, because they knew that it was only opportunity for them not to lose their jobs.
In December 1991, USSR collapsed into 15 independent states. After this collapse of USSR, the communist states from Europe to Asia separated in to two places: Commonwealth of Independent States (hereinafter - CIS) and Central and Eastern European states (hereinafter - CEE). 12 of the 15 USSR states, excluding the Baltic States (Lithuania, Latvia and Estonia), associated in the CIS.
There were a lot of differences in labor market institutions between the communist states and developed Western European Union (hereinafter - EU) member states. In spite of this, during the transition period after 1990s, labor market transformations in the CIS countries have differed from those of the new EU member states, which experienced rapid growth in unemployment, relatively small initial declines (followed by strong growth) in real wages, and relatively generous social safety nets 7. There were various reasons in CIS countries that made them less developed than CEE countries; meanwhile, after few years most of the CEE countries became EU member states. One of the obstacles of development of the CIS countries was the strong impact of the Russian Federation (hereinafter - RF). Because first of all, RF, declaring itself as a successor state of USSR, let all CIS countries to enter to RF with visa-free conditions and tried to create compact relationships with these new “independent” countries. RF also took advantages of organizing easy immigration of young people of these countries who could work in every work condition for very low wages.
Unfortunately, since 1990s, negative political influences of the Russian Federation, has been continuing to impact on CIS countries. Actually, most of them live in their soviet regime as it was during the period of the USSR, the only variation is that the USSR was a soviet, socialist state; however, these states are capitalist regime states under the Russian Empire. That’s why, nowadays, the former Soviet countries which belong to European Union (EU) essentially differ from the others.
In fact, there may be used various ways to solve these problems, however, the first step must to release from the Russian Imperialism policy. Each state has to do establish its system only in democratic solutions and increase the education quality of his people.
Post-Soviet states are not only affected politically by RF. Meanwhile, Russia effects also to their legal systems. Because most of the regulations or different rules have been taken from the U.S.S.R. and their fake systems, so these governments are face to face with strict difficulties to adapt to new amendments. People do not know how to implement international rules to local conditions.
On the other perspective, at the beginning of the transformation, labor relations in CIS countries were governed by Soviet era regulations that featured the central determination (or indexation) of wages paid in both the state and private sectors, as well as restrictions on the ability of enterprises to fire employees, or the required pay-out of large severances to workers who are made redundant. Employers therefore preferred to reduce hours and/or wages rather than reduce numbers of employees. Large payroll and social security taxes made it very unprofitable for enterprises to pay higher wages. 8 This created a lot of skilled people who were forced to work with very low wages without any job security. Employees had no opportunity to leave their job only for unfriendly work environment or violations of their employment rights, because they knew it could be take several years to find a formal job during this transition period.
Education system in CIS countries has not changed too much since 1990s and year by year the levels of the educated people are going to decrease. Because the "educational institutions have not undergone deep reforms ” 9 in most of the CIS countries. Low educated generation is the biggest obstacle to the developed future of a country.
The level of education in CIS countries also leads to the increasing demand for better employment conditions. For example, part-time employment is not so clear in Azerbaijan. Most of the people think that in order to be officially employed, they must work full-time, he or she must work full-time, because people are not used to flexibility in the work place. Therefore, part-time employment less spreads in CIS countries than in the EU member states, because finding a job is not easy and employers do not use to see part-time job opportunity, usually they employ full-time or delegate any work to the full-time employees instead of taking a part-time employee. This perception is in favor of the employers and nobody takes care about overload work environment in most of CIS countries.
Labor law regulations since 1990s in CEE countries have developed more positively than CIS states. There are some points that are really important to analyse reasons.
CEE countries did a lot of reforms on their political and economic conditions. First of all, since 1988 these countries began to conduct bilateral trade agreements with EU countries and General Agreement on Tariffs and Trade (GATT) was one of the powerful vehicles to make powerful relationship with developed Western European countries. Then, CEE countries were really also the happy being near to EU countries than USSR, however, CIS countries were not such lucky like them.
CEE countries could see the experience of EU states and it was not too difficult for them to learn free market system so rapidly. With their economic and political support of EU member states, CEE countries were easily able to formulate their new bank systems, privatization on the properties and free market system. One of the problem was old education system of the past USSR which was really needed to change and improve. CEE countries worked really hard to get all these systems and build a country on independent, democratic and sovereign values. A significant emphasis has been placed on the link between unemployment and the wage and employment setting in the newly created firms, privatized versus state owned firms, and foreign owned firms. 10
In most transition economies, the employment decline reached 15-30 percent in the 1990s. A continuous decline was observed in Russia, Slovakia and Romania; a developed path which described in L-shape pattern detected in Bulgaria, Hungary and Slovenia; described in a U-shape pattern in Poland; and a sideways described in S-shape pattern in the Czech Republic (Figure 2). 11 So, Poland has really indicated huge determination in this difficult way to development since formulating free market system.
Figure 2. Real GDP Index (1989 Base Year)12
illustration not visible in this excerpt
Regarding the Figure 2, it can be easily seen the changes and development way of each transition states from 1989 to 2001. Actually, they lived a ultimate decrease at the beginning of the transition period, however, year by year they developed.
According to Table 1, during the beginning of the transition period, the unemployment rate rose from zero into double digits. The Czech labor market was a good example for a transition labor market with its high inflows as well as outflows and also with its unemployment rate.
Table 1. Unemployment Rate during the transition period (1990-2001) (Percent).13
illustration not visible in this excerpt
From the Table 1, it is shown that apart from Hungary, Slovenia and Romania, unemployment rates were really high in transition economies in 1990-2001 years. However, such kind of lower unemployment does not mean that here is a better economic condition in a country than others, because there is a clear trade-off between institutional efficiency and reform via lack of employment.
GDP and unemployment rates approximately (not definitely) indicate economic condition of a country, especially in free market or capitalist states. Because in communist or socialist states most of the enterprises get some help or subsidy by the state and actually there is no private enterprise or employer that has to think about his/her benefits. That’s why, in this system it could be seen a lot of workers in an enterprise with very low wages. In transition countries, there were transformation of system and such kind of states learned gradually this system. So, these two points affected labor market.
Furthermore, according to Figure 2 and Table 2, it seems a little bit strange that in most transition countries with increasing the GDP, the unemployment rates also increase. However, logically, it could be vise verse. Because increasing GDP could be assumed as more productivity and high employment. In economy, this conflict calls “jobless growth”. Economist can bring different reasons for this conflict, but one of the strongest claims for this condition is overload employment of employers try to increase the productivity with loading their employees and give an employee different positions instead of taking a new employee. They even do not want to employ a part-time worker, because they can employ a high skilled employee with fewer wages instead of two or three employees with separate wages. And the negative side of this situation is that people see the unemployment risk in the country, so they work in such conditions even it made them to live without any job satisfaction. There are no any “real” trade unions or government inspections to inspect and penalize the employers. The “real” means that in spite of the structure of some post-communist countries might have this position, unfortunately, it does not work adequately. For instance, although there is actually Labor Inspectorate Service in Azerbaijan, the employees cannot use this service adequately because of some bureaucratic reasons or lack of information.
In addition to this, unlike the labor market of other former Soviet countries, the Baltic States’ labor markets were characterized by a comparatively high employment among the old people who had over 65 years old. For instance, “Estonia has got the highest percent age of old-age people employment. Though, the least percentage of old-age people employment in Lithuania, it is more than total EU states. ” 14
CHAPTER 2 PROTECTION OF EMPLOYMENT RIGHTS AMONG THE EASTERN EUROPEAN COUNTRIES
In this master thesis, it is considered to analyze Eastern European countries in accordance of the United Nations Statistics Division which includes Belarus, Bulgaria, Czech Republic, Hungary, Moldova, Poland, Romania, Russia, Slovakia, and Ukraine. 15
Poland. The fundamental employment document in Poland is the Labor Code which was approved on 26th June 1974. The importance of this Code was that regarding to this; it was declared rights and obligations of the two parts of the employment: employees and employers. However, after a few years later, it was really clear that the reality and legislation were different and there was a visible incompatibility between the expectations of the employers and employees. So, in fact, nearly ¾ of employers have now difficulties with finding candidates corresponding with their requirements. 16 Employment agencies don’t work adequately and most of the employers could not demonstrate compatible skills or reasonable competence for the required vacancies. Although it is written in Labor Code of Poland (Article 94):
“ 1) make new employees familiar with their duties, the methods of work in particular posts and their basic rights;
2) organize work in a manner best suited to make effective use of working time and achievement of high efficiency and appropriate quality of work by employees through exercise of their abilities and qualifications. ”17
In spite of these important articles, any person who graduates newly cannot find a job easily with the assist of the employment agencies. So, as it mentioned in the articles below, nobody try to make or organize compatible provisions for new employees. The unemployment rate among young people is growing and the average salaries also dropped slightly. 18
There is a conflict with the correlation between unemployment and labor regulation in the world. Some economists claim that there is no correlation between them and with changing employment regulations it could not reduce the unemployment. On the other hand, labor regulations could affect the job flows (hiring and dismissing in a work period) with requiring high compensation for employees by the employers or any other amendments on labor regulation. So, it could make employers avoid from the collective dismissals and be careful selecting a new employee. And Trade Unions and state agencies should follow the employers’ behaviors.
The Czech Republic. According to the Labor Code of the Czech Republic, the Employment Agencies have to assist to find jobs and decrease the unemployment: “… the employment agency undertakes to arrange for its employee temporary performance of work and the employee undertakes to perform such work according to instructions given to him by a user, such user thereby acting on the basis of an agreement for temporary assignment of the employment agency's employee, concluded between the employment agency and the user. ” 19 However, the control by the government system for such kind of obligation is very weak and there are a lot of people who cannot find any job in Czech Republic.
For a basic illustration we can use this Graph 120
Abbildung in dieser Leseprobe nicht enthalten
It is clearly show from the graph that the unemployment rate had increased from 2008 till 2010. After 2010, it began to decrease rapidly. The unemployment started to increase at the beginning of the implementation the Schengen zone rules to the country, however, then it began to decrease and develop with new entrepreneurs from different EU or Schengen zone people.
1 Constitution of the R.S.F.S.R. (1918) //СУ РСФСР. 1918. № 51. ст. 582.
2 Кодекс законов о труде года // Приложение из учебного пособия И. Я. Киселева «Трудовое право России» (Москва, 2001). — Собрание Узаконений и Распоряжений Рабочего и Крестьянского Правительства РСФСР. 1918; № 87-88. Ст. 905
3 Constitution of the R.S.F.S.R. (1918) //СУ РСФСР. 1918. № 51. ст. 582.
4 Europe-Asia Studies, Vol.45, No.1, 1993, pages. 141-167/ Soviet Economic Growth Since 1928: The Alternative Statistics of G.I.Khanin/by Mark Harrison https://www.google.az/search?q=graph+view+of+soviet+market&espv=2&biw=1517&bih=741&source=lnms&tbm=isch& sa=X&ved=0CAYQ_AUoAWoVChMIqtK_r9iuyAIVASQsCh2ewwqK&dpr=0.9#imgrc=urkhBXPUAg7rZM%3A
5 The Central Intelligence Agency (CIA ) - It is an organization of the United States of America (USA) which aimed ensure the US government with foreign states’ important or hidden facts, information, news or publications.
6 Grigorii Isaakovich Khanin - a famous Russian economist.
7 Olga Pavlova, Oleksandr Rohozynsky Labor Markets in CIS Countries, Warsaw, September 2005, page.1-2
8 Ruslan Yemtsov, “Labor Markets, Inequality and Poverty in Georgia.” World Bank Discussion Paper No. 251.
9 Olga Pavlova, Oleksandr Rohozynsky Labor Markets in CIS Countries, Warsaw, September 2005, page.8
10 “Labor Market Flexibility in Central and East Europe”, Jan Svejnar, August 2002, pages. 1-3.
11 “Labor Market Flexibility in Central and East Europe”, Jan Svejnar, August 2002, page. 12.
12 “Labor Market Flexibility in Central and East Europe”, Jan Svejnar, August 2002, page. 26.
13 “Labor Market Flexibility in Central and East Europe”, Jan Svejnar, August 2002, pages. 14-15, 30.
14 Labor Market Flexibility, Flexicurity and Employment, Edition: 2007, Chapter: LABOR MARKET DEVELOPMENTS IN THE BALTIC STATES, Publisher: Nova Science Publisher, Editors: Raul Eamets, Tiiu Paas, pp.1-19
15 Population Division, DESA, United Nations: World Population Ageing 1950-2050
16 The most important challenges for the labour market in Poland, 12.05.2013 (https://laboureconomics.wordpress.com)
17 The Labor Code, 26.06.1974 (Poland)
18 The most important challenges for the labor market in Poland, 12.05.2013 (https://laboureconomics.wordpress.com)
19 Labor Code The Czech Republic (CHAPTER V, Section 307a)
20 Source: the Czech Ministry of Labor and Social Affairs.