Mikhail Tarassenko
The chairman of Miners’ & Metallurgical Workers Trade Union of Russia

T

he Miners’ & Metallurgical Workers Trade Union has supported the concept worked out by the Russian government for development of metallurgy for a period until 2010 even though the concept implies a significant decrease in the number of the industry` s workers. We agreed with the offered strategy of restructuring as the upgrade of production facilities and shut down of obsolete plants will permit higher output of marketable products. At the same time we have come up with a number of claims to mitigate the negative consequences.

Here one can refer to a similar experience of restructuring steel works in Europe, which took 15 to 20 yea rs and caused no social shock. All the participants of the process, including the state, employers and employees clearly understood their share of responsibility for the events, which were happening. There was an overflow of labor resources from metallurgy into other industries with the salary of those who remained increased. As a result the purchase power of the European population got higher to determine a further expansion of European markets that is the key criterion for effectiveness of socially important projects.
In the relationship with employers our trade union prefers to adhere to a principle of a social partnership and avoid confrontation. In our opinion such a tactics is a pretty forward looking. For a business, which is governed by objective logics of development, stability and predictability of its habitat are pre-requisite. If there is a tool to prevent social conflicts and disputes, the employer always prefers to use it.
The best evidence to this is a well-established practice in Russia to make bargaining contracts at enterprises and Sectoral tariff agreements with the Association of Industrialist of Mining & Metallurgical Complex of Russia. Sure, a long and thorough working out of projects followed by difficult negotiations, which sometimes take several months, precedes making such agreements and contracts. Anyway, sooner or later we would arrive at a compromise.
In particular, on making a Sectoral tariff agreement we set ourselves the main task to achieve a mutual acknowledgement of parameters of sectoral employed labor compensation standards. An agreement achieved to date is based on a necessity to develop a labor compensation scheme more flexible than a sectoral standard. If due to objective reasons an enterprise can` t meet the sectoral standard it is allowed for the enterprise to make bargaining contracts providing for lower level of labor compensation. In this case a program must be arranged on reaching the labor compensation level specified by the sectoral standard whatever long period it could take to implement such a program.
The process of consolidation in the Russian metallurgy and formation of major integrated companies required along with regular social partnership forms (at a level of companies and the industry as a whole) to develop new forms of cooperation.
In 2002 owing to an initiative of EvrazHolding and our trade union for the first time in Russia a Social Board was formed. The Board` s top priority was to facilitate regulation of social –labor relations and to develop decision making mechanisms for solving numerous problems arising in the course of restructuring the holding. This holding is a major Russian steel company which employs about 100,000 employees, integrates three iron&steel works and 10 mining and smelting enterprises. The Board includes leaders of trade unions formed at the enterprises and employers` representatives.
I would like to outline that on the part of the company decision to form a Social Board was not a mere gesture to evidence the company` s intention to keep a dialogue with employees. It was rather a jumping board to develop a policy based on principles of social partnership. It is not a rare case when parties keep bitter talks yet they always try to find a consensus mutually acceptable for both the employers and the employees. It is the Social Board` s chairperson acting pro bono who plays a consolidating role in this process. Decisions achieved in the course of consultations become obligatory for the company` s management.


For such a multi-branch major as EvrazHolding appearance of the Social Board was very timely. It is the Sopcial Board, which made it possible not only to solve disputes but also to prevent them. In particular, at the Board` s meetings top managers of the company and leaders of the company` s trade union found an acceptable way for restructuring Kuznetsk Steel Corporation, the most difficult plant with 32 thousand employees.
The program for social adaptation of dismissed employees provided for seven directions: to incentives the employees to retire, to arrange early old age pensions, to retrain the personnel, to facilitate opening private businesses etc. For non-core production operations supposed to be withdrawn out from the company a transient period was set to adapt for an independent activity under free market conditions.
Implementation of the above measures, which cost EvrazHolding significant financial investments, allowed avoiding a social tension. Only 42 out of 3.700 dismissed employees got the status of an unemployed person.
From the pint of view of Miners’ & Metallurgical Workers Trade Union of Russia I can only add that the way Kuznetsk Steel company was restructured shows a possibility of a socially responsible modernization of the whole industry without detriment to employees` interests. The business wants predictability and social stability, not metallurgists on strike. In this sense stands of the companies` owners and trade union leaders coincide. Only with social issues solved in due time and in full volume can work collectives take a full-scale part in implementing production programs.