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President of Russia Vladimir Putin: Mr Shmakov, there are many unions, and there are many problems and challenges. I know that you are going to talk about the ones you consider the most important. But today I would like to start with your assessment of the situation in the labour market.

Chairman of the Federation of Independent Trade Unions of Russia Mikhail Shmakov: Of course, the labour market mostly depends on economic development, so today we see some negative trends: a number of companies, regardless of the latest decisions and sanctions, are in difficult situation; they are reducing staff and closing facilities.

In this sense, of course, the latest decisions and statements by the government about the need to invest more in the Russian economy and provide better access to loans, because it’s critical that a company be able to refinance, give us some cause for optimism.

Moreover, the policy to increase people’s income will, of course, boost the entire economic mechanism, and small and medium-sized businesses will have more work; so by increasing demand we will see better performance in the labour market as well.

Vladimir Putin: How do the unions see the implementation of the current law and regulations in this area?

Mikhail Shmakov: In general, it is being used quite actively. Of course, there are certain instances at some companies and in some regions where the Labour Code is not followed.

Vladimir Putin: This is what I am talking about: stopping illegal layoffs and paying salaries in full, among other things. How is this going?

Mikhail Shmakov: As for the payment of wages at companies that have gone bankrupt, there are gaps in our legislation. Wages owed to employees are not considered a priority debt, not even second in line and are sometimes pushed back to a later stage.

Therefore, many people – thousands, tens of thousands of employees of bankrupt enterprises – cannot get the wages they earned for years.

Of course, the Labour Code is a living document and certainly needs to be adjusted depending on the real situation.

Vladimir Putin: The priority of wage arrears – we have repeatedly discussed this with you – we actually need to think this through, talk it over with the Government and with your specialists, and look at this order. Because in this case it is important to protect the rights of people who have found themselves in a difficult situation through no fault of their own.

Mikhail Shmakov: Yes, of course.

Moreover, we have talked about this, and there has been some progress – that wages owed should be paid before taxes. Then it would even be possible to motivate the tax authorities to ensure that wages are paid, because they would then be interested.

Otherwise, they will not be able to collect taxes from companies that are struggling with difficulties. These companies are a minority, but there are some; the tax authorities collect the taxes owed by the company through their influence and other tools, but wages remain unpaid.

This is a very important point, which certainly needs to be corrected and clearly stipulated in the law. We are doing this, are working with the State Duma and with the Government.

Vladimir Putin: Good.

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