Observation (CEACR) - adopted 1999, published 88th ILC session (2000)

The Committee has been commenting on the application in practice of Article 12(1) of the Convention (Regular payment of wages) on which a number of comments were made by workers' organizations in various sectors. Since the last session of the Committee, a communication dated 21 July 1999 was received from the Federation of Trade Unions of Ukraine, which points out that the total wage arrears had continued to increase to reach 7,013,000,000 grivnas (US$1,750,000,000) of which 858,000,000 grivnas are owed to workers in the state or local budget sector; some 10.4 million workers (47.3 per cent of the workforce) are affected; an ever larger proportion of wages is being paid in kind. The Federation considers that the efforts by the executive authorities to monitor observance of legislation on the payment of wages is ineffective, and states that, while there were 20,247 reported cases of violations of legislation on wage payment, fines imposed on persons responsible amounted only to 64,000 grivnas, and less than one-third of the sum has actually been paid.

The Committee notes with interest that the Government supplied information in response by several communications in May and November 1999. The Government states in its latest communication that, according to the data supplied by the State Statistics Committee, the total wage arrears owed to workers decreased during August and September 1999 by 411,000,000 grivnas (5.8 per cent) and stood at 6,781,000,000 grivnas as of 1 October. Of the total, the arrears in state-controlled undertakings count for 35.4 per cent (2,400,000,000 grivnas) and the non-state owned undertakings 64.5 per cent (4,380,000,000 grivnas). The Committee recalls that in its previous observation it noted 5,600,000,000 grivnas of total wage arrears as of May 1998, including the arrears in the state budget sector of 836,000,000 grivnas.

As to the measures taken, the Government indicates that a comprehensive survey of undertakings still owing wage arrears was carried out by the labour inspectorate, which covered as of 25 October 1999 a total of 27,245 enterprises with wage arrears (about 42 per cent of the total number), and resulted in the payment of 814,100,000 grivnas (22.7 per cent of the total wage arrears at the undertakings surveyed), court summonses issued in 3,117 cases of non-compliance with wage legislation, 2,048 cases examined by the courts and fines totalling 122,100 grivnas imposed, and 33 cases of criminal proceedings initiated for gross violation of labour legislation. The Government further states that under the terms of the General Agreement for 1999-2000 concluded between the Cabinet, the Confederation of Employers and the trade unions, wage arrears should be paid off by the end of 2000 at state-owned undertakings and those in which the State has a stake of more than 50 per cent, and that, in addition, wage arrears (more than 20,000,000 grivnas) owed to workers of undertakings that have carried out work for the State would be paid by the end of 1999.

The Committee also notes that the communication received from the Government in May 1999 includes further information concerning the developments on the matter, such as the situation in different sectors of economy, various measures taken including references to a number of Orders of the Cabinet of Ministers, supervision of the settlement of wage arrears. The Committee notes that the Government mentions in this communication, among the consequences of the lack of funds to pay wages, the payment of wages in forms other than money (e.g. payment in kind or use of coupons). It also notes that the Government considers that the courts, when examining violations of labour legislation, tend to tone down the culpability of those responsible because of the difficult financial situation, and to often make inappropriate decisions in view of the social tensions caused by such violations.

The Committee notes the measures taken by the Government with a view to solving the problem of arrears in wage payment. However, taking account of the fact that considerably large figures are cited both by the Government and the Federation of Trade Unions of Ukraine as still outstanding arrears in wage payment, the Committee cannot but urge the Government to continue its efforts to take all possible measures to improve the present situation and to indicate in detail the measures taken to apply the Convention as well as the results obtained.

The Committee requests the Government also to report the measures taken to ensure the application not only of Article 12(1) of the Convention but all its other substantive Articles, in particular: Article 3 concerning the prohibition of payment with promissory notes or coupons; Article 4 concerning the regulation of payment in kind; Article 11 on the treatment of wages as privileged credit in the event of bankruptcy; and Article 15 on the sanctions in case of violation. It requests the Government to include information on any legislative measures, including the development regarding the Bill to amend the Criminal Code and the Code of Administrative Offences mentioned in the May 1999 communication, and copies of relevant legislative provisions (e.g. Cabinet Orders). Please continue to provide detailed information on all relevant measures taken to ensure supervision, actual application of penalties and the advancement in the settlement of wage arrears.