Mykhaylo Volynets: “Soon there will be no one left to work in Ukraine”

MP and Chairman of the Confederation of Free Trade Unions talks on how to stop labor migration from Ukraine.

Mass outflows of Ukrainian workers abroad has led to a severe manpower shortage in the domestic industry, in particular in the mining & metals sector. At present, most steel companies in Ukraine report a personnel issue. Mykhaylo Volynets, MP and Chairman of the Confederation of Free Trade Unions, told in his interview to GMK Center that Polish employers sometimes compete for qualified Ukrainian workers with German employers by offering legal status and more favorable working conditions. What can Ukrainian manufacturers do to retain workers at their plants?

Mykhaylo, why do Ukrainians go to work abroad?

— The main reason is high unemployment, which currently reaches 9%, and low remuneration that is just not enough to meet the workers’ basic needs.

The second driver is disrespectful treatment of employees by their employers. It is common for both state-owned and private companies. Ukraine offers neither fair respect for workers nor suitable working conditions (appropriate health and pension insurance, occupational safety, labor protection etc.).

The third reason is inadequate government control over compliance with the provisions of the current labor law.

The fourth reason is lack of a real social dialogue between employers and employees (non-performance or non-conclusion of collective agreements).

You mean a dialogue with trade unions?

— Yes. Being a trade union activist, I have to admit that we have not managed to properly protect hired people in Ukraine. Our country, like all post-Soviet countries, is dominated by old puppet trade unions that only simulate social protection and dialogue. Independent trade unions in Ukraine are still an exception rather than the norm. In Belarus and Kazakhstan, they have actually been destroyed, and their leaders are now in jail. In Russia, independent trade unions are under a strong governmental pressure, and it’s not easy for them to work.

Is low income the main reason for labor migration?

— Yes, it is. Today, workers in key professions get UAH 15 to 20 thousand per month at state-owned mines. The rest get much less — UAH 10 to 15 thousand. The surface staff can make UAH 3 to 3.5 thousand before tax. It means that people are paid less than the minimum wage.

At private companies, including steel companies, the situation is better. While the surface staff is paid UAH 3 to 3.5 thousand at state-owned mines, they might get UAH 7 to 10 thousand at private mines. It is twice as much. The remuneration is paid in due time and twice a month in the form of the advance payment and the wage.

Is this remuneration enough?

— No, it’s not. It is impossible to survive on such money. If each of the spouses makes UAH 7 to 10 thousand and they have two children, they will still live below the poverty line. It’s a paradox — when two robust and mentally healthy persons have got a job, they are still below the poverty line.

Remuneration should cover basic expenses: food (around 30%), housing, clothes and healthcare, cultural and intellectual development, travelling, saving for the future and assistance to old parents.

Can you suggest some nominal figures?

— Let’s say that the minimum wage in Ukraine, which currently amounts to UAH 4,173, is twice as low as it should be. However, the living wage, which is twice as low as the minimum wage, is a blatant manipulation. In accordance with the law on remuneration for the hours worked, passed by the former Parliament, at Ukrainian companies that work part-time (there are hundreds of them), people are paid for 20 working hours instead of 40. As a result, workers get less than the minimum wage.

You mentioned a social dialogue, why is it so important?

— In the beginning of the 20th century, Europe saw revolutions and mass protests of workers who fought for their rights. Later, revolutionary processes went beyond the borders of individual countries and covered the whole continent and the greater part of the world, i.e. Africa, Asia. Ultimately, employers came to a conclusion that it would be better to assume the responsibility for social welfare of workers (standardization of working hours, remuneration rates, health insurance etc.) than to deal with revolutions. In 1919, just after the World War I, the International Labor Organization was established. It took several decades before the United Nations appeared.

The key players in the domestic labor market should be trade unions and employers. They should enter into employment agreements and contracts. The government should be an arbitrator in this process. As soon as an imbalance emerges, a country will inevitably face a crisis.

Is this true for Ukraine?

— Absolutely. If trade unions cannot protect hired people, properly represent their interests before employers and public authorities, propose high-quality draft labor codes and collective agreements and contracts of various levels, it can lead to social degradation, augmentation of discontent and tragic consequences as it happened in Zhanaozen, Kazakhstan, where critical social and economic situation caused mass protests of workers that escalated into clashes with authorities, slaughter, arrests and persecution.

If the government fails to draw right conclusions in time, mass protests arise, which can spill over into entire regions. It is also true for Ukraine. If the current situation continues, people will have to protest or go abroad.

In the midst of our conversation, Mr Volynets calls his friend Igor who had worked as an engineer at a Ukrainian thermal power plant for 20 years, but went to work abroad to earn money for his son’s medical treatment.

— Igor, where do you work now?

— In Sweden.

— Are you legally staying there?

— I’m staying legally, but work illegally.

According to Mr Volynets, Igor was a respectable skilled worker and the company counted on him, but they did not manage to agree upon remuneration in the hour of need.

— How much do you make in Sweden?

— I used to get a net salary of UAH 15 thousand at home. Here I get 4.5 times more. I had never worked abroad, I had worked for 19 years in the same company, I had developed and made my way to the top of my profession, but low remuneration and my son’s disease made me leave the country. Other factors include outdated equipment at Ukrainian companies and employers’ attitude.

Igor adds that he noticed an interesting trend abroad: Polish employers, having realized that Ukrainian workers are highly qualified, tend to offer them legal status and employee benefits. The Poles improve conditions for Ukrainian workers for the latter not to leave for Germany at the beginning of the next year.

Mykhaylo Volynets gives another example:

— A certain company made me a totally legal offer recently. It is looking for Ukrainian miners to work in the Czech Republic. They want to restart a mine and are looking for Ukrainian workers. They need 100 people, to whom they guarantee high remuneration, health insurance and so on. The job is totally legal, which is quite rare. It means that we are facing a serious crisis and there will be no one left to work in Ukraine soon…

How to improve the situation? Which steps are needed to retain Ukrainians in local companies?

— I would put a social dialogue first. We should sit down at the negotiating table and discuss issues related to low wages, low social standards and lack of protection, etc. It is important to sign proper employment agreements and contracts. However, the recent Framework Agreement on Regulation of Social and Economic Policy and Labor Relations for 2019–2020 has just preserved poverty in Ukraine.

The second factor is combating corruption. Corrupt enforcers run companies. Let’s take the State Labor Inspectorate that has considerable authority in our country and enjoys a strong support for reforms from the international community. Still, it is also corruption-ridden and does not perform its direct functions.

The third factor is labor law. Not only is it disregarded, but they also try to impair it. Our law often contains standards that are lower than international ones despite the fact that Ukraine has ratified dozens of the ILO conventions.

The ILO conventions contain basic and minimum global standards. That’s the bottom and one cannot sink lower. The minimum wage and the living wage should correspond to specific basic needs. There should not be a gap between the minimum wage and the living wage.

How does the ILO itself see it?

— Ukraine is among the TOP 5 countries with the highest number of violations of the rights of workers and trade unions. Our country is monitored by the International Labor Organization and the International Confederation of Trade Unions. This year, Ukraine had to report on non-payment of salaries at the 108th Session of the International Labor Conference. However, it seems that our employers and officials managed to bargain for Ukraine’s report to be not presented, and the old trade unions did nothing. It means that we did not manage to protect many Ukrainian citizens. It also means that they will join the ranks of labor migrants.