What is wrong with the draft law “On Employers’ Associations”?

A round table initiated by business unions and in cooperation with the International Labour Organization (ILO), at which the draft law “On Employers’ Associations” was discussed, revealed many inconsistencies, gaps and shortcomings in the document pending before the Council of Ministers.                                    

No re-registration

The pool of participants was large. The organizers invited representatives of the Ministry of Labour and Social Protection, the Ministry of Economy, the Ministry of Justice, the National Center for Labour and Social Protection, members of the working group on the development of the draft law, deputies of the National Assembly, ILO experts, republic-wide and regional business associations. It was curious to compare the opinion of the authorities and representatives of small and medium-sized businesses about the document which, as it seems should improve their life.

Deputy Minister of Labour and Social Protection Igor STAROVOYTOV commented on the active preparation of he law. “In September we submitted it to the government, and it is being finalized. In December, the Council of Ministers will submit it to the parliament. We understand the difficulties that await us since we relied, among other things, on the Russian experience. The existing associations of employers were created mainly as unions, associations of legal entities, there are several hundred of them, and their re-registration is not envisaged. If this or that organization decides for itself to become an association of employers, then we will include it in the register.

Quite easy conditions for representation in associations of employers have been established, which apply for various statuses: for republic-wide organization s – 15 employers or unions of employers which should represent the majority of territories (regions and Minsk). For the regional union of employers, the norm is 10 members, for the regional union – 5 members”, said the Deputy Minister of Labour and Social Protection.

According to him, the law itself is small in small in its scope and does not affect many aspects of the activities of associations of employers, since the existing legislation already regulates them.

“The issue of registration is not covered, but only a reference to the relevant provisions is given. As for the charter, only its main provisions are indicated, without detailing – the norms defining the powers of associations of employers are contained in the system of social partnership. I would like to note that we propose to include a provision according to which the employer, when joining the association, undertakes to fulfill the requirements of the agreements and contracts signed by him”, Starovoitov said.

Does Article 9 correspond to Article 6 in the Soviet times?

Director of the Business Union of Entrepreneurs and Employers named after Professor Kunyavsky Zhanna TARASEVICH noted that the structure of social partnership in Belarus today is rather fragile and requires improvement. This could be improved by the law on employers’ associations (EA), which passed parliamentary hearings in 2005, but was not signed by the president. “The law is necessary in order to give wider opportunities for the activities of EA. For example, today, business associations do not have the right to provide paid consulting and information services, since this is an entrepreneurial activity that is directly prohibited by the Civil Code. To do this, business unions need to create new commercial structures”, she explained.

This problem is not the only one that the law could help resolve. Some others include is a clearer legal basis for the functioning of EA and a clear distinguishing between them and business associations, of which there are more than 2000 in the country.

“The document is intended to put things in order in the hierarchy, to define the rights and obligations of the members of the employers’ association. What did we manage to achieve in the draft law? We partially solve the main problematic of EA – they can engage in entrepreneurial activity. Their status has been determined and the registration mechanism has been documented. The rights and obligations of EA members have been determined”.

What requires additional discussion and solution?

Firstly, Article No. 9 “Confederation of Employers of the Republic of Belarus”. It provides that a certain “confederation” is determined according to the described criteria, but we believe that they are not entirely correct: very small EA may represent the interests of a minority of employees, or there may be one large association that represents the interests of the majority. So, there are contradictions in terms of representativeness.

We also believe that this article contradicts the norms of ILO Convention 87, Article 87, which defines the voluntariness of associations. The Confederation of Employers (by virtue of law) will work on the formation of the National Council for Social and Labour Issues, on the conclusion of the General Agreement, and this is an indirect compulsion to ensure that EA unite in a higher level structure. We believe that the law should stipulate the expediency of coordinating the activities of the United Nations within the framework of social partnership”, Tarasevich said.

She proposed to exclude Article 9 from the law and to amend the new wording of Article “Independence of employers’ associations” consisting of six points:

– associations of employers shall operate independently of government bodies, local governments, trade unions and their associations, political parties and movements, and other public organizations;

– it is prohibited to interfere with state authorities, local authorities and their officials in the activities of employers’ associations, which may entail restriction of the rights of EA, established by international treaties of the Republic of Belarus, this Law and other regulatory legal enactments;

– interaction of EA shall be determined by them in accordance with their Charters, resolutions of EA governing bodies;

– EA’s activities within the framework of the social partnership system shall be coordinated independently on the basis of consultations and agreements;

– Republica-wide EA shall have the right to be represented in the National Council for Social and Labour Issues. To determine the quantitative composition, the republic-wide EA shall conduct consultations and independently develop criteria and quotas;

– in order to coordinate activities and represent interests within the National Council for Social and Labour Issues, EA can create councils, associations, other formations, delegate authority to one or several EA.

“This wording of this article will make it possible for the associations of employers to remain independent and will enable them to determine their place in the field of social partnership”, said Tarasevich.

Not the Tax Code

The Chairman of the Republican Union of Industrialists and Entrepreneurs (RUIE) Aleksandr SHVETS stated that private business does not see the law under discussion as important, unlike, for example, amendments to the Tax Code, which are of interest to all business entities, local authorities and departments.

“We conducted a survey among top managers of major companies in the private sector. And we got an impression that this document is of no interest even to the heads of medium and large companies – their problems are so far away from all this that I was somewhat discouraged. In essence, this law is not a product of the needs of businesses themselves, at least of non-state ownership. So, maybe this is a product of the aspirations of state factories? I don’t think so, since this issue was not raised during numerous meetings and consultations with various commissions and councils. And let’s at least figure out the rules for nominating candidates to the National Council, so that everyone can trust this procedure”, said the RUIE Chairman.

He shared the opinion of Tarasevich stating that Article 9 can be safely excluded. “It will harm. It will legitimize the distorted influence of the state through domination in the described confederation through the state sector of the economy. The likelihood of distortions in the enforcement of this law is significant”, summed up Aleksandr Shvets.

“The most important thing is that this document should help the development of social and labour relations. So that it becomes better not only for business unions, as associations of employers, but for those employees who work in both the private and public sectors, so that new agreements will benefit them, not harm them. So that, ultimately, the competitiveness of all of us, our country, will increase”, summarized Zhanna Tarasevich.