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Eastern Europe — Russian oligarch proposes labour legislation reform

20 April 2010

Billionaire Mikhail Prokhorov, who heads the Labour Committee of the Russian Union of Industrialists and Entrepreneurs, has proposed to alter Russian labour law, which currently provides for an eight hour workday and limits total overtime to 120 hours per year or approximately 2.5 hours per week. The oligarch has also called for new rules that would make it easier to dismiss employees, The Moscow Times reports.

Oleg Moskvitin, lawyer at Muranov, Chernyakov & Partners, said "allowing people to work extra hours is key to increasing productivity. Current rules limiting overtime are outdated. Working overtime has become a norm and necessity for business. Many employees are driven by career considerations, by a desire to earn more and are ready to work more than allowed by the Labour Code. The law should not prevent employers and employees from legally agreeing on extra work. The law must, however, guarantee that the overtime is voluntary and the employee is appropriately compensated for it."

However, Andrei Isayev, Member of Parliament (Duma) for the governing United Russia Party, said "what Prokhorov is proposing already existed back in the 19th century. Enforced exploitation of workers never caused growth in productivity. Therefore such initiatives have no relation to modernisation."

Vladimir Gimpelson, Director of the Centre for Labour Research, commented on the dispute "the more rigid the legislation protecting employees, the fewer new jobs appear. Young workers are especially affected by this. They can't find new jobs because the positions are occupied by somebody who can't be fired. The country needs a public discussion of its labour laws, not a cheap exchange of populist statements."

Luc Jones, Partner at recruitment company Antal Russia, sees the situation in a different light. He said "firing people in Russia has never been a problem and it is often done outside of the legal framework. Employers can use a number of tricks that aren't governed by labour legislation. An employer can make an employee leave by moving him or her to a useless position or by threatening to write something unpleasant in their service record."

Jones said further, "the main disagreement between businessmen like Prokhorov and the pro-Kremlin legislators lies in the fact that they come from very different backgrounds. Prokhorov made a lot of money and is very successful, but most politicians don't realise how difficult it is to start a business. They just never tried it, so they label every initiative they don't understand as capitalist or whatever."



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