Russia’s Employment Crisis

Unemployment in Russia is soaring, and the level is 16% higher in the first 11 months of this year than it was last year.  As many as 5 million people in Russia may presently be jobless, with 800,000 having lost their work in November alone. The Associated Press reports the horrifying details:

Cowed by what she called a growing campaign of intimidation, equity analyst Yekaterina Krylova finally quit her job. In submitting her “voluntary” resignation, she waived her right to any compensation — and that saved her employer a hefty payout.

As the Russian economy hurtles toward its toughest period in a decade, many companies are resorting to desperate and some say underhanded measures as they rush to cut staff and save money. And as the outcry over worker mistreatment rises, the government is under mounting pressure to show that it is listening.

Prime Minister Vladimir Putin will host a televised phone-in show Thursday, and many of the questions already pouring in to the program have focused on Russia’s worsening economic situation.

Russians want to know how the government will force employers to abide by the country’s Labor Code, whether it will help the newly unemployed make their mortgage payments and what kind of support graduates can expect as they seek their first job.

Russia is heading for a serious slowdown in economic growth and companies across a range of sectors have announced job cuts as they hunker down to conserve cash.

Russian companies have laid off about 27,000 people since October and plan to slash up to 200,000 more jobs over the next two months, the Federal Labor and Employment Service said.

The real unemployment figure may be far higher, the agency has acknowledged, largely because people like Krylova who are forced to resign slip under the radar.

Olga Krylova, a lawyer for the non-profit Center for Social and Labor Rights, said her group has received a surge of complaints since October about unfair dismissals. She says many others forfeit their right to legal action by resigning voluntarily under pressure.

As demand for metals and other industrial products has sunk, some big factories in remote Siberian towns have trimmed production.

Nearly 200 Russian companies have transferred some workers to part-time shifts, according to government statistics, so about 54,000 workers have had their hours cut or been put on unpaid leave.

Worker unrest has been growing. More than 100 migrant workers at a construction site in the Ural Mountains city of Yekaterinburg put down their tools last week to protest that they were owed three months of wages. Many other workers have also had their paychecks held, a trend prevalent in the turbulent 1990s that was all but wiped out in the prosperous years under Putin.

Russia’s labor law is heavily skewed toward employees. Companies are required to pay employees for up to five months after laying them off — that includes two months’ notice and up to three months of pay on top of that. Employees can also agree to two months’ pay and immediate termination of their employment.

But as the crisis sets in, there is mounting evidence that an increasing number of employers are skirting obligations and pushing their staff into voluntary resignations.

Olga Hopkirk, who worked for a construction firm, said she was among those asked to resign. She negotiated just two weeks’ pay. When she asked what would happen if she refused, she said her boss told her it would be “worse, there would be huge problems” for her.

“I decided to spare my nerves,” Hopkirk said. “My boss told me it wasn’t worth suing.”

Employers have been using a variety of tactics to push employees into resigning, including issuing formal reprimands for minor infractions, threatening to blacken their official work record or blackballing their name with other employers.

All Russian employees carry a record of their employment history, which also details how they left their previous jobs.

“We received a reprimand if we were just five minutes’ late,” Krylova said. “They made threats that they would mar our work books with mentions of misconduct and would call around all potential employers and give us a bad name.”

In Russia now, there’s a growing gap between what the employment law requires and what actually takes place.

“The situation is just wild. (Employers) are sacking staff without any thought, breaking all the rules,” lawyer Galina Yenutina wrote this week in the Novaya Gazeta newspaper.

3 responses to “Russia’s Employment Crisis

  1. Obama is about to appoint Maxell as labor secretary where she wants to institute Soviet style changes to our labor laws. I.E. no layoffs, no firings of employees. Businesses can’t function in such a manner. Although I feel sorry for Russians for the situation many are unfairly in, I can’t imagine that none of them had a suspicion that there fairytale economic turnaround was going to last forever with the likes of Putin and Medvedev in charge.

  2. Soviet style changes to the labour laws would require far more than just the support of the Congress and White house. Failure is imminent.

  3. Hi! – Nice Post!
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    Im writing because I found some good info on that entrepreneur way to get – create ourselves our own job! – “Find out how to create your own job! Creating own employment – steps to auto employment! all you need to know to start your own business!” – ;
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    Cheers my friends!

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