According to Ukraine’s largest employers and their attorneys, the Soviet Union may have succeeded in creating a worker’s paradise – at least in terms of labor laws.
Managers complain that it is impossible to fire anyone for a litany of reasons, and that disgruntled employees frequently wield trade union agreements as a weapon to retain jobs for which they are otherwise unqualified.
But with a wave of privatization supposedly set to occur across Ukraine, particularly of large industrial enterprises, the primacy of unions may become a bigger issue as workers’ collectives push to alter the terms of sales.
According to Oksana Voynarovska, a labor attorney at Vasil Kisil & Partners, trade unions are typically strongest in the state-owned industries, but they tend not to be a meaningful force in the private sector.
However, many former state-owned firms that were privatized retain their union agreements, Voynarovska said.
“Traditionally, they were the big manufacturing companies in the Soviet Union, and then they were privatized by foreigners or they got an investment program according to which (investors) have to retain the rights of the employees without making massive redundancies,” Voynarovska said.
Test case at Odesa Portside Plant
Two separate labor attorneys said that the privatization of the Odesa Portside Plant would be closely followed in terms of how the plant’s union managed to negotiate with its eventual purchaser.
The plant, which produces ammonia and other industrial chemicals, is widely expected to be the first large industrial entity to be privatized in the next round of selloffs of state property.
Dmitriy Ternavskiy, a worker at the plant, said that all 4,000 workers were members of its trade union. He said that the union’s leadership intended to set conditions on the enterprise’s sale for any future buyer.
“They want it to be sold with the condition that all jobs are retained over some period of time,” Ternavskiy said.
Privatization regulation
Labor attorneys say that trade unions are typically used as instruments of manipulation, either on a small scale by employees fighting dismissal, or by wealthy businessman who see them as opportunities to stifle resistance.
According to Mariana Marchuk, a labor attorney at Baker McKenzie in Kyiv, as few as three workers can form a trade union. Once one is formed, a company will need permission to dismiss any worker in the union from the trade union itself.
“New trade union formation is often related to such situations, when an employee should be or is dismissed for disciplinary violations,” Marchuk said.
The Baker attorney added that while it is possible to resolve these conflicts, such situations were often an example of “pressure tactics either to avoid dismissal for disciplinary violations, or to have a formal pretext for challenging the termination, or to negotiate more favorable terms.”
However, state-owned companies on the path to privatization, like the Odesa plant, tend already to be covered by one large union. “In the terms of privatization there will be a separate chapter regarding collective bargaining rights and obligations to fulfill the terms of the collective agreement,” Marchuk said. Within one year after privatization, new collective bargaining should commence, she said.
Fighting for nothing
Volodymyr Monastyrskyy, a labor attorney at Dentons, said that it is difficult to delineate many collective bargaining rights. Many people work unofficially, meaning that a lot of labor disputes cannot be effectively settled, he said.
“As long as employees continue to be paid in envelopes, there is no real future for collective bargaining,” Monastyrskyy said. “People would be fighting almost for nothing.”
Many of the country’s wealthiest businesspeople control the country’s unions. The head of the union of employers, for example, is Dmytro Firtash, the Group DF head who remains in exile in Vienna, Austria, after fighting of extradition to the United States on a bribery charge that he denies.
