SEMINAR of Trade UNIONS of BUDGET SECTOR
Trade Union Campaign on the Non-Payment of Wages in Russia
Newsletter 3
Previous newsletters have looked at the general aspects of the problem of non-payment of wages in Russia and has reported various conflicts around the issue. This newsletter is devoted to the problem of non-payment of wages in the budget sector of the Russian economy. The newsletter has been prepared by the analytical department of Institute for Comparative Labour Relations Research on behalf of the trade union campaign.
Although the bulk of wages are due in what is now the private sector in Russia, the budget sector has particular significance because in this case it is the government itself which is acting in direct violation of Russian law and international agreements in failing to pay its own employees. The President has recognised the obligations of the government in promising to pay off its debts: the debt to the pensioners was paid off in July and to the army in August. The President has promised that the debt to all budget sector workers will be paid off by the end of this year, although at the moment it seems unlikely that this promise will be met. Most of the debt to budget sector workers, unlike that to pensioners and the army, is owed by municipal and regional authorities. This means that the situation is very different from one region to another, with a few authorities owing nothing at all and others owing up to a year or more’s pay to their employees. In this issue of the newsletter we include reports on the situation in a variety of different locations.
During September ISITO research teams have conducted research into the problem of non-payment of wages and actions taken by trade unions and the administration of enterprises and organisations in three Russian regions, Kemerovo, Samara and Sverdlovsk. This research was made possible by the support of the Free Trade Union Institute. The research focused on nine enterprises: two coal extracting enterprises, one oil processing enterprise, one light industry enterprise, one metallurgical and two engineering factories and two educational establishments. Russian language versions of the full reports, and a range of other material, can be accessed from the campaign website at
You can join the cybercampaign and get additional information from the ICEM ‘Labour Website of the Month’ at
In this newsletter we present an account of conflict over the non-payment of wages to teachers in one school district. We then provide a record of a seminar held by budget sector trade unions within the framework of the campaign, together with the final declaration of the seminar. The newsletter concludes with an invitation which has been sent to the Russian President to open the international trade union conference on the non-payment of wages which concludes this stage of the campaign.
The problem of wage delays and the role of trade unions in schools in Sysertski raion of Sverdlovsk oblast
Wage delays for teachers in Sverdlovsk oblast date back to 1993-4, when the regional trade union of education workers sent an appeal to the oblast government concerning delays in the payment of wages in several districts, but at that time delays were only of one or two months and only affected a few districts. By September 1997 only 8 of 67 school districts did not owe wages to the teachers. The total wage debt on 22 September 1997 in the oblast was 169 billion roubles, an increase of 4 billion over the previous month, with the average wage delay amounting to 3.5 months, but some teachers had not been paid since the end of the previous year.
A distinctive feature of Sverdlovsk oblast is that under a local law financial responsibility for education has been devolved to the budget of the local school district. This means that in the few districts dominated by an enterprise in a strong economic position the municipal budget has enough to pay the teachers, but in the majority of districts the local enterprises do not have enough to pay wages to their own workers, let alone to keep up their payments to the local budget. Sverdlovsk enterprises owed a total of more than 90 trillion roubles, including almost 8 trillion roubles owed to the budget at all levels. No more than 15% of taxes are collected.
Nevertheless, the local and regional budgets are always in conflict over the issue of the distribution of money to pay the education workers’ wages, with each level blaming the other for the problem. The local authorities believe that their financial resources are quite insufficient to meet the demands made on them, but the regional authorities argue that the local authorities do not give sufficient priority to the payment of wages or to restructuring education to reduce costs by closing small schools, reducing the number of administrative staff and cutting the number of teachers.
According to the trade union the primary reasons for the non-payment of wages are the general crisis of tax payment, inadequacies in provision of regional funds for local budgets, and inactive or ineffective local education management.
The town of Sysert’ is about 30 kilometres from Yekaterinburg, but although close to the regional capital it is very much a provincial town. The district embraces several large industrial enterprises, most of which are in deep crisis as a result of the collapse of their markets or their inability to compete, with industrial production down by 55% since 1990. Not one of the enterprises pays anything to the local budget.
Sysert’ raion has a total of 19 schools, of which five are in the town. The trade union has 2,000 members, its president a young woman teacher who took up the post two years ago. There is no alternative trade union, and most of the teachers have not heard of such a thing, although an approach was made by an independent trade union not long ago. About three years ago a lot of people left the union, but there has been some return.
In December 1996 the average teacher’s pay in the oblast was 630,000 roubles, only just over half the average pay in industry (1153 thousand).
Delays in the payment of wages began in the district in the autumn of 1996, when wages were not paid in November and December, although they had not received the money due to them for the purchase of professional materials since December 1995, and child benefits stopped being paid in April 1996. At first the teachers thought that this was just a temporary problem which would soon be resolved but, like other workers in the budget sphere, their wages continued not to be paid. At first the head of the educational administration continued top pay himself and ten of his colleagues, but the local administration soon put a stop to it and since then all have been in the same boat. By the first of May the teachers were owed 2.747 billion roubles.
In March, after four months without pay, some teachers turned to the court. They were successful in getting their wages, but it turned out that this was at the expense of the kindergartens. The only money in the account of the education department was that paid in by the parents of children in kindergartens to cover their subsistence, and it was this money that the court took to pay teachers’ wages.
In all 550 individual and collective applications were made to the court, some people applying several times, and about one fifth of which were successful, but the teachers soon lost confidence in this route as the money in the municipal accounts evaporated, and over the summer there were no applications to the court at all. The regional committee of the trade union had recommended applications to the court as a possible form of action. The local trade union president helped people make such applications, but did not actively promote them.
In the spring the local administration offered the teachers the possibility of taking goods instead of money. The goods were supplied through local shops, arranged by the local authority, but teachers had to pay a premium price for these goods. But not many teachers took up the offer, not least because only a limited range of goods were available: furniture, cement and so on rather than the subsistence goods the teachers needed. The local administration also offered teachers the opportunity to offset part of the wage debt against the money they in turn owed to the local authority for their housing, although few took up this opportunity either.
The teachers did receive 44% of their holiday pay when the schools finished for the summer, but by the end of the vacation they had still not been paid their February wages in full and had only received their holiday pay since. At the end of September the teachers were paid for February and March, but they did not get their pay for September. The President’s decree promising full repayment by the end of the year only fanned the flames: if teachers were not getting their current pay, how could they hope to see the debt reduced.
Why were the teachers not paid?
Different people had different explanations for the failure of the local authority to pay their wages. Some simply blamed the general economic situation which prevented enterprises from making payments to the budget. This was the position of the regional and local administration. Others placed the blame on incompetent local management, and this was the view not only of one of the members of the regional trade union committee, but also of some teachers.
However, most people saw the problem as lying in the laws which govern the financing of education, considering that education is a state service and so a general state financial responsibility, which should be funded from the federal budget. Some saw the problem as lying in broader social changes which had reduced the status of teachers and of education, reflected in the reduced commitment of the pupils themselves to education, everyone being interested only in making money.
Conflicts
The trade union has been concerned with a number of issues concerning the qualifications and grading of teachers, but the issue of wage delays has been overwhelmingly the greatest source of conflict. The local trade union president kept in close contact with both the teachers in schools and the local administration and was very well-informed of the situation.
The Sysert’ teachers supported the FNPR day of action in the autumn of 1996 with demands for the payment of their wages, child allowances and compensation for professional materials, preservation of additional pay for qualifications, and repair of the schools. These and a number of other demands were repeated at the local trade union conference at the end of December. The trade union also gave notice of a collective labour dispute to the local service for the resolution of labour disputes, a necessary prelude to strike action and a conciliation commission was elected at the conference.
After three meetings of the conciliation commission the dispute was submitted to arbitration. At a second trade union meeting in January notification of an intended strike was given, but no date was fixed.
During the spring and summer teachers submitted applications to the courts, but there was no collective action. Towards the end of the school year, and in anticipation of having to spend the whole summer holiday without pay, the teachers discussed the possibility of refusing to conduct the end of year examinations, although they decided against this action in the interests of the children.
At an extraordinary trade union conference on the 3rd of June, held jointly with the medical workers, the teachers gave notice that the new school year would not begin until the teachers had been paid their wages and benefits in full and necessary repairs had been made to the schools. The medical workers threatened no action, some of the teachers feeling that they just wanted to hang on to the teachers’ coat tails. The local council resolved a week later that it did not have the means to meet the teachers’ demands, that it would try to pay off some of the debt in groceries, that it would seek an interest-free loan from the regional authorities and would campaign for education to be taken under the regional budget.
The failure of the local authority to meet the teachers’ demands meant that in the majority of schools the school year did not begin on time. 11 of 20 schools did not open because of the teachers’ strike, 3 did not open because the facilities were not ready, but the teachers would have struck. Five of the six rural schools did not join the strike, partly because in the countryside nobody was being paid their wages, in some cases agricultural workers on state farms had not been paid for two years, but also because the teachers were afraid that their small schools would be closed down, some having only two or three children in each year. The kindergartens also did not participate in the strike for fear of closure.
In those schools which struck meetings of the teachers had been held to endorse the decision. The teachers turned up on the first day to explain to the children why there would be no lessons. The resolve of the teachers was strengthened by the support they got from the children, by an antagonistic speech by the regional governor on television and by an initial promise from a regional official that they would be paid, which was soon reversed. Parents were more equivocal in their support for the teachers, while the local administration was antagonistic.
The demands of the teachers had been reduced to payment for February and March, payment of the remainder of their holiday pay, and a clear timetable for the payment of the rest of the wage debt. On the first day of the strike the teachers received their pay for February, which whetted their appetite for more and encouraged them to think that they could succeed. At the end of the first week they received their pay for March, the funding for which was secured by the local administration borrowing the money from a commercial bank at an annual rate of interest of 28%, having failed to get any money from the regional administration. The teachers were also promised their April wages by the middle of October. Support for the strike and the degree of militancy varied among teachers and between schools. As the strike continued teachers became increasingly concerned that the children were losing out. At the beginning of the second week the trade union president asked representatives to sound out their members about calling off the strike. Only one school went back to work immediately, all but two of the rest returning to work at the start of the following week.
Assessment
The head of the educational administration was very critical of the trade union in the wake of the strike, expressing his nostalgia for the traditional role of the Soviet trade union, condemning the strike action, and suggesting that a more constructive role for the union would be to organise the payment of the teachers in kind. The teachers, on the other hand, also contrasted the normal role of the trade union with its role in the dispute, when it had shown itself to be an effective instrument for the defence of workers’ rights, co-ordinating their efforts. The trade union had also become more active in defending the workers’ rights in other respects: creating ‘working’ collective agreements, securing payment of communal services for rural teachers, monitoring safety, participation in certification and so on.
The strategic of pacific industrial relations, which the trade union painstakingly followed in the first stages of the conflict, produced no discernible results, although it was an essential first stage of the dispute, both to keep within the law and to prepare the teachers for more radical action. Submission to the court also had very limited effectiveness because after the first successes, there was no money to pay the teachers in the account since the administration kept what money they had elsewhere. The strike proved to be the only effective means by which the teachers could get their pay.
Following the strike the head of one school and a group of teachers left to set up a private school, but this is unlikely to be a general tendency since few can afford to pay school fees. Other teachers may leave to work in the private sector, but on the whole those likely to take this course of action have already done so. With so few alternatives available to them, the likelihood is that further delays in the payment of wages will lead to further conflict, including strike action. At the moment all hopes are pinned on the promise of the Russian President to pay off all debts to budget sector workers by the end of the year, but the local administration insists that it cannot possibly meet this timetable without support from the regional and federal budgets and the deputy head of the regional government has told the teachers that they will not get their pay unless they agree to take it in the form of goods, which is likely to promote further unrest. Meanwhile a longer term solution to the problem can only be found with a resolution of the problems of the budget and of the financing of education.