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The President noted that despite the post-crisis difficulties, the state authorities are fulfilling all of their social commitments. Progress has been made on fulfilling international social commitments too, in particular by ratifying a number of ILO conventions and the European Social Charter.

Mr Medvedev said that economic modernisation’s goal is not to shrink the labour market, but to create modern new jobs, and stressed that priority must go now to training qualified workers.

The President also said that the labour market in Russia needs to become more civilised, but that encouraging foreign labour into the country should not be to the detriment of Russian citizens.

Mr Medvedev noted that trade unions could play a useful part in reviving the system of higher technical education and become more actively involved in monitoring the creation of new jobs in the regions.

Taking part in the meeting were Chairman of the Independent Trade Unions Federation (FNPR) Mikhail Shmakov, heads of trade unions representing agriculture sector, healthcare, coal mining industry and defence industry workers, lawyers, heads of regional trade unions associations, and also First Deputy Chief of Staff of the Presidential Executive Office Vladislav Surkov.

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President of Russia Dmitry Medvedev: Good afternoon, colleagues.

It's been a while since we last got together. The year is coming to an end and I don't remember ever describing it as easy and pleasant. Perhaps this is partly for superstitious reasons, but I have to admit that the year certainly was not an easy one. On the other hand, I hope that we can all agree that it was nevertheless still easier for our people, for all workers, compared to 2009.

In my opinion there has been a very useful dialogue between the authorities and trade unions in our country, as well as constructive relationships more generally. This is a very good thing, because that is what characterises a responsible social partnership. It should be appreciated and developed. This partnership was especially important during the crisis and I think it played a key role in overcoming it.

You know very well that, despite the very difficult situation, the state has fulfilled its social commitments even though this was really very hard to do and at a certain point I simply had to restrain everyone's desire, all those responsible for the financial sector, to redefine our positions on social obligations and programmes.

As a result, expenditure on social benefits even increased compared with pre-crisis spending in 2008. This of course does not mean that everything is now fine and good, but it still helped us to survive. We have all sorts of problems. Today you will tell me which ones you feel are most urgent.

Trade unions participated actively in the government's crisis management team and all regional anti-crisis bodies, in formulating and implementing crisis management programmes. I would like to thank everyone here today for this.

”Highly qualified workers are of the utmost importance for modernisation.“

An active involvement of all parties is maintained now too, and I think this is a primary responsibility of the Government of the Russian Federation and the trade unions to join their efforts. It is absolutely crucial.

As a result we have succeeded in reducing the impact of the economic crisis and, more importantly, in minimizing the increase in unemployment in 2009, while this year has seen its steady decline, so if we talk about the results of this year, then maybe this is the most favourable result that we have been able to achieve. And as a consequence the situation in our country and our society is generally quite stable.

This year, the growth of national economy, as you are probably aware, is four percent. Of course that is somewhat worse than we had hoped, due to the effects of drought, abnormal temperatures and crop damage. But it's a good growth when compared with other European countries as we are growing at a better pace. Still, the growth is not as good as we would have liked, and some fast-developing economies grew much faster.

Real incomes in 2010 will grow by five percent. But what is particularly important, as I already said, is the decline in unemployment figures by two million people. Nevertheless, the situation on the labour market is still tense. You have been keeping careful track of this by virtue of your responsibilities as trade unions. The Government has also been pre-occupied with it. Let's talk about this as well.

In my view we have also recently made progress in fulfilling our international social commitments, or rather, in developing our social policy. Russia has ratified a whole range of conventions of the International Labour Organisation and the European Social Charter. We discussed these issues with several colleagues present here, with Mr Mikhail Shmakov [Chairman of the Independent Trade Unions Federation]. At this point there is still more to do in this area, which is of course related to the current economic situation. But I would like to act proactively with regards to our adherence to international conventions regarding occupational safety. It is not true that we are still so poor that at this point we cannot afford this convention. Wherever possible we need to move forward.

We have introduced a new system of remuneration in the public sector, as well as new insurance principles for payments to extra-budgetary funds, the Pension Fund, and social and medical insurance funds. A consolidated social tax has been replaced with insurance deductions. All this is also the result of the collaborative work of all of us. Nevertheless, we must keep our dialogue, and the opinion of trade unions on social safeguards is crucial as it is on the minimum wage, on salary indexation, and of course on observance of laws on the occupational safety and health protection.

Today we are jointly engaged in economic modernisation. This modernisation will of course ultimately have an impact on the labour market situation.

There is a fairly widespread view that any sort of modernisation ends up reducing the number of jobs available. In our circumstances aiming at such results would be absolutely wrong, and not because modernisation does not in certain cases reduce the number of employees – in some instances this is exactly the purpose. But our task is precisely to create new, modern jobs, not just to get rid of some inefficient jobs. Therefore, the purpose of modernisation should be creating new jobs and, consequently, bringing about higher wages, a better quality of life, and general improvement of our country's social standards. It is therefore extremely important that our employees take part in the discussion of all these innovations.

We understand that highly qualified workers are of the utmost importance for modernisation. We have repeatedly discussed the impoverishment of the system of vocational education, which has completely ceased to exist in some fields. Unfortunately the tradition of professional workers' dynasties that we were so proud of in the Soviet era has broken down, and virtually any employer — and you know this as well as I do — will tell you that he really doesn't have enough skilled workers while he's already tired of interviewing economists and lawyers, of whom we have too many. Therefore, the task of training qualified workers, foremen, engineers, industry experts, remains essential especially for the needs of our modernisation. I think that the unions could at least partly assist in the revival of vocational education and mentoring programmes, which at one point were well-developed in our country.

”Together with regional authorities, trade unions must make sure that when employers attract foreign labour force, this is never to the detriment of Russian citizens. Without doubt, hiring workers from abroad must not result in an illegal employment or slave labour.“

I also appeal to you to participate more actively in monitoring the creation of new jobs in different regions. As I see it, the number of new jobs will be one of the criteria applicable in my evaluation of the regional authorities’ performance.

I know that the unions in our country, as in other countries around the world, are paying close attention to issues of labour migration, because it is directly tied to the state of affairs in our labour market. This matter must be discussed openly, without any constraint, as there is no reason to hide behind politically correct wordings.

Let's be honest: today in some industries we simply cannot cope without additional manpower from abroad. And if only for this reason, we need an immigration policy meeting the requirements of today. Our labour market should be much more civilised than the one that we have now. Therefore, together with regional authorities, trade unions must make sure that when employers attract foreign labour force, this is never to the detriment of Russian citizens. Foreign workers can occupy a niche, a cluster which is of little interest for our citizens. Without doubt, hiring workers from abroad must not result in an illegal employment or slave labour either, which unfortunately is sometimes the case in our country. We have to face up to this and fight against it.

I also know that you have questions relating to the financing of the public sector and the rights of its employees. I think that we should also discuss these subjects. I am ready to hear all your ideas and suggestions.

I invite you all to participate in this discussion.

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