Report in which the committee requests to be kept informed of development - Report No 299, June 1995

Case No 1807 (Ukraine) - Complaint date: 24-OCT-94 - Closed

1. 342. In communications dated 24 and 27 October 1994, the International Energy and Mines Organization (IEMO) presented a complaint of violation of trade union rights against the Government of Ukraine. It submitted additional information to support the complaint in a communication dated 30 November 1994.
2. 343. The Government sent its observations in communications dated 30 January and 15 March 1995.
3. 344. Ukraine has ratified the Freedom of Association and Protection of the Right to Organize Convention, 1948 (No. 87), and the Right to Organize and Collective Bargaining Convention, 1949 (No. 98). However, it has not ratified the Labour Relations (Public Service) Convention, 1978 (No. 151), nor the Collective Bargaining Convention, 1981 (No. 154).

A. The complainant's allegations

1. 345. The IEMO states that the Republican Council of the Trade Union of Workers of the Coalmining Industry (RS PRUP), which is one of its affiliates, is party to a national agreement with the Coal Board of Ukraine which, inter alia, fixes wage rates and social guarantees (hereinafter referred to as the Agreement on Wage Rates and Social Guarantees). The First Deputy Prime Minister, Mr. Constantin Massik, countersigned the Agreement on 12 February 1992.
2. 346. The IEMO explains that the Agreement was amended on 10 September 1992, 19 July, 22 October and 14 December 1993. The Government and the Coal Board of Ukraine are jointly responsible for ensuring respect for and implementation of the obligations included in the Agreement.
3. 347. The IEMO alleges that since the Agreement was signed, the Coal Board of Ukraine and the Government have failed or refused to meet many of the obligations set out in the Agreement, including the payment of wages and benefits related to occupational diseases or accidents, and respect for the provisions on occupational safety and social security. The IEMO adds that several persons from the workplaces have interceded and written to government authorities to alert them to the situation but no remedial action has been taken so far.
4. 348. The IEMO concludes that the failure to respect the obligations laid out in the Agreement is a violation of the right to engage in free collective bargaining, since the defaulting signatories are thus posing a challenge to the key clauses that were freely negotiated, and which they accepted. Furthermore, the IEMO maintains that this kind of approach has a serious effect on workers' living conditions and acquired rights.

B. The Government's replies

1. 349. In response to the IEMO's allegations, the Government points out that it has requested the Ministers of Labour, Social Protection, the Mining Industry and Justice to look into how far the Agreement on Wage Rates and Social Guarantees was being respected by the parties to it. At its behest, the Federation of Trade Unions of Ukraine and the Ukrainian Organization of Industrialists and Employers also took part in this process.
2. 350. The Government points out that this analysis seems to indicate that some of the provisions of the Agreement, including those relating to the payment of wages and benefits for occupational diseases or accidents, are not being respected.
3. 351. The Government maintains that the mining industry's lack of financial resources is the main reason behind the failure to respect its obligations under the Agreement. The Government goes on to explain the difficult situation facing the mining industry. For the last five years, the quantity of coal extracted from mines in Ukraine has fallen continuously, dropping from 191.7 tonnes in 1988 to 115.7 in 1993. Over the first 11 months of 1994, the quantity of coal extracted was 18.3 per cent lower than in the corresponding period the preceding year. As at 1 December 1994, the Ukrainian mining industry's net debt stood at a total of 15.6 trillion karbovantsi. The decline in quantities of coal produced, added to debtors' delays in payment, has led to a serious liquidity problem which has had a knock-on effect on the payment of wages and benefits to workers.
4. 352. The Government states that it is working with the competent authorities to take the measures needed to normalize the situation. To this end, the Government points out that on 2 March 1994, the Cabinet of Ministers adopted Decree No. 141 setting up a development programme for the mining industry and mining regions. The Government maintains that these measures will help to stabilize the industry and should help to solve workers' economic and social problems.
5. 353. In a more general context, the Government points out that in October 1994, a programme designed to facilitate the transition to a market economy and stabilize the various economic sectors was adopted. Against this backdrop, the 1994 budget set aside 30 trillion karbovantsi for the mining industry, mainly to cover the payment of wages and other social benefits. By 1 December 1994, the Minister of Mines had received more than two-thirds of the karbovantsi initially earmarked in the budget. The National Bank of Ukraine issued loans at preferential rates to various industries in the mining sector. In addition, the Government adds that an Act designed to write off the debts of Ukrainian coalmines was passed in November 1994, and that machinery to encourage the full payment of wages by placing greater responsibility on enterprise managers is in the pipeline.
6. 354. The Government concludes by once again expressing its desire to develop and strengthen cooperation with the ILO and reiterates its determination to take all the measures necessary to ensure respect for the international labour conventions it has ratified.

C. The Committee's conclusions

1. 355. The Committee notes that the present complaint concerns the failure to respect the provisions of the Agreement on Wage Rates and Social Guarantees, to which the Coal Board of Ukraine and the Republican Council of the Trade Union of Workers of the Coalmining Industry of Ukraine (RS PRUP) are parties. The Government countersigned the Agreement on 12 February 1992.
2. 356. The Committee notes that the signature and identification of the parties to the Agreement, and its actual application, do not appear to be at issue in this case. In addition, the documentation considered by the Committee seems to indicate that the Government is not challenging the allegations made by the complainant organization concerning the failure to respect certain provisions of the Agreement. The Government acknowledges that some of the provisions of the Agreement covering, inter alia, the payment of wages and other benefits, have not been respected. In this regard, the Committee recalls the principle that "the interruption of already negotiated contracts is not in conformity with the principles of free collective bargaining because such contracts should be respected" (Case No. 1172, 241st Report, paras. 97-122). In other words, the public authorities should promote free collective bargaining and not prevent the application of freely concluded collective agreements, particularly when these authorities are acting as employers or have assumed responsibility for the application of agreements by countersigning them.
3. 357. The Government maintains that the failure to pay wages and other benefits due to workers in full is explained by the financial crisis affecting the country in general, and the mining industry in particular. The Committee notes the measures taken by the Government to try to revitalize the mining industry and ensure the payment of wages and social benefits. It requests the Government to continue its efforts so that the agreement can be fully implemented. It requests the Government to keep it informed of developments in this respect.
4. 358. The Committee acknowledges the serious upheavals facing the country mainly as a result of the transition to a market economy and the energy crisis. Nevertheless, the Committee feels that part of the current problem seems to be caused by confusion, even a breakdown, in labour relations. In the case in point, the fact that wages, social security contributions and benefits have been freely negotiated and concluded is not being disputed. In a case like this, the Committee believes that it would be advisable to begin by clearly identifying the parties, particularly on the employer side. Furthermore, the parties should promote consultation as far as possible, and the labour relations system should provide for suitable machinery to this end. In other words, the Government should give greater importance to the establishment of machinery which would enable parties voluntarily to take account of economic and social policy considerations and the protection of the general interest. However, for that to happen, the first step should be to recognize that the goals are in the national interest and for broad-based consultations to be held between the parties at the national level. The Committee therefore invites the Government to consider establishing this kind of procedure. The Committee believes that machinery of this nature may help to avoid the kind of dispute found in this case.
5. 359. In general, the Committee requests the Government to take the measures necessary to ensure an efficient and stable labour relations framework which provides for the participation of the various parties concerned and enjoys their confidence as well as machinery for consultation of workers' and employers' organizations in the process of restructuring different sectors of the economy. It requests the Government to keep it informed of any developments in this regard. Furthermore, it reminds the Government that it may avail itself of the services of the International Labour Office if it feels it needs assistance in this area.

The Committee's recommendations

1. 360. In the light of its foregoing conclusions, the Committee invites the Governing Body to approve the following recommendations:
   • (a) As regards the failure to respect some of the provisions of the Agreement on Wage Rates and Social Guarantees, the Committee recalls the general principle that previously negotiated contracts with workers' organizations should be respected. In this respect the Committee notes the measures already taken by the Government to try and revitalize the mining industry and ensure the payment of wages and social benefits and requests it to continue its efforts so that the agreement can be fully implemented.
   • (b) The Committee invites the Government to consider machinery which would enable parties voluntarily to take account of economic and social policy considerations and the protection of the general interest.
   • (c) The Committee requests the Government to take the measures necessary to ensure an efficient and stable labour relations framework which provides for the participation of the various parties concerned and enjoys their confidence as well as machinery for consultation of workers' and employers' organizations in the process of restructuring different sectors of the economy. It requests the Government to keep it informed of any developments in this regard. It reminds the Government that it may avail itself of the services of the International Labour Office if it feels it needs assistance in this area.