Partial wages indexation does not suit the Union

JSC "Northern Shipping Company"  (JSC NSC) indexed the employees' wages by 4, 9%, but did it on dubious terms. So, the increase affected only a fixed official salary of the  employees  within the  amount equal to the minimum wage of RUB12,792. The sum in exceed of that amount is not the subject to indexation. The SUR Primary Organization at JSC NSC believes that the Order that introduces these norms  does not comply with the law, and if the company does not correct it in the near future, they will appeal to prosecutor's office.

As noted by Sergey Portenko, Chairman of the  SUR Primary Organization at JSC NSC,  the Union  was not duly notified of these changes, although it had been trying to achieve a wage indexation for workers since the beginning of the year. However, due to the pandemic, negotiations were complicated - face-to-face meetings were hard to arrange, and the company often ignored the  phone calls. Recently, it turned out that the Indexation Order was issued by JSC NSC on July 30, without  notifying and consulting the Union, and came into force on August 1. Thus, the SUR Primary Organization  learned about the changes of employees' wages from the workers, while the seafarers themselves were not aware of  the basis  for these changes. The union representatives only managed to get a copy of the document  after personal meetings with the company management.

The Union committee believes that the Order, which refers to the Regulation on indexation of the JSC NSC employees wages, dated  2019, which provides for the indexation of wages  limited to the amount of minimum wage, does not comply with the law.  Valery Nefedov, SUR Chief Legal Expert shares this point of view. He noted that according to Art. 134 of the Labor Code of the Russian Federation, indexation implies increases in real wages to allow for increases in consumer prices for goods and services. At the same time, Art. 129 of the Labor Code  implies that wages include not only the fixed salary, but  various compensation payments (in particular, additional payments and allowances for work in challenging conditions, in severe weather  conditions, in areas exposed to radioactive contamination, etc.) either, as well as incentive payments (for example, bonuses). It means that the statutory provisions do not imply that only the salary in the amount of the minimum wage should be increased. Therefore, there is a basis for a filing a claim.

In addition, there is another, procedural basis, Valery Nefedov added

The employer violated the requirement of Art. 372 of the Labor Code of the Russian Federation which requires to take into consideration the opinion of employee representative body prior to issuing a local regulation, which is the Indexation Order.

In this regard, the SUR Primary Organization at JSC NSC is preparing a draft requirement to eliminate violations, which will be sent to JSC  Northern Shipping Company. In case we receive no response from the company within the prescribed seven-day period, the Union Committee will appeal to the prosecutor's office. Moreover, Sergei Portenko said that in talks with  seafarers they knew about other oddities associated with the indexation process. For example, at the moment, the indexation has covered only those seafarers who have signed-on for voyage after the Order took an effect. Those, who went to sea earlier, have seen no  increase of wages wages.  

- Previously,  if the company issued Orders concerning an increase or a refusal to increase wages, they were accompanied by explanatory notes indicated  possible reasons, such as the lack of funds.

-This time the Order has no arguments for inavailability to make increase of wages in full, - Sergey Portenko highlighted.

- It should be noted that at the same time, the company stipulated  additional personal payments to individual employees in the form of personal allowances not provided for by the collective bargaining agreement, so this is not about the lack of funds for  full wages indexation. The Union is not aware of basis for  these allowances.

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