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Vladimir Putin: We know very well that today the trade unions are under no pressure from the state, I think you are aware of that and you proceed in accordance with this premise. But it would be wrong if federal, regional and local authorities and the trade unions worked separately from each other. We must be partners helping each other in the performance of our functions, especially since the governments at every level and the trade unions at every level have basically the same targets: the social well-being of Russian citizens; neither the trade unions nor the Government have or should have any other objective.

The character of labour in Russia has changed dramatically in recent times. Market relations have become a reality, and that of course has changed the very essence of the work of the trade unions, and this topic merits discussion – especially since labour relations are a significant potential source of conflict, as we know only too well. Our task is to minimise that potential on the one hand and to make the work of the trade unions as effective as possible, on the other.

In Soviet times – and many of you were already active in the trade union movement in those times – the trade unions were referred to as “a school for communism”. Obviously, in the present-day context, the trade unions cannot and must not be an educational establishment. They are key instruments in promoting the interests of the workers and this is the only criterion for trade unions individually and the trade union movement as a whole.

The movement is only gathering momentum here. While developed industrialised Western countries have stable legislation and a fully-fledged trade union movement, our trade unions are emerging and the legal framework is just being put in place.

I would like to stress the urgent need for labour legislation in this sphere. We need legislation that will protect both the employees and the employers, and I would like to stress that.

You know that the new tasks and new methods are a response to the exigencies of our time. We have more than 80% of companies in which the Government has a less than a 50% stake.

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I think the Government should strike a balance between promoting market relations on the one hand and social justice on the other.

I think – and this is my personal view – that the trade unions should be a key instrument for achieving such a balance, while the Government should guarantee that the agreements between employers and employees and their associations are honoured.

What did I mean when I spoke about the balance of interests? I would like to speak about it briefly. People employed by businesses should be protected against administrative abuses, and the trade unions have a huge role to play in that; but we cannot tolerate the other extreme: our actions must not hinder the development of companies or keep labour productivity at a low level or preserve outdated forms of labour organisation, because ultimately the people themselves suffer. If a company is antiquated and operates at a loss, one cannot expect higher wages or a higher level of prosperity in general. We should all understand it. And I think this is the meaning of social partnership: it is not just about mutual interests, social partnership is also about the mutual responsibility of the employers and the employees and, I repeat, their associations.

Giving promises we know we cannot fulfil is one of our teething troubles, and has been throughout the previous decade. We are gradually getting rid of that affliction at the government level. And we are doing everything possible to ensure that the Government’s social obligations to the people are fulfilled. But, I repeat, they must be realistic because the worst thing that can happen is when the Government assumes obligations and fails to deliver. It is worse than assuming modest obligations, but fulfilling them. Then at least the people keep their faith in the Government and other institutions closely linked with the Government.

There is, of course, another ingrained habit, the habit of saving on the cheapest commodity, if one can call it that, namely, the workforce. That too has become a reality. On the one hand, cheap labour is a substantial factor of economic development, but on the other hand the cheapness may become a brake on the economy, not to speak of the social deprivations that it implies.

The trade unions have a huge role to play in correcting these distortions. For example, the substance of collective agreements is changing, and rightly so, I think. Increasingly they are becoming an effective mechanism in determining the true value of labour and fair pay. I want you to note that the latest changes in tax legislation, in particular, in social tax legislation, are aimed at bringing wages out of the shadow. I think this is in the interests of the workers above all, although I agree with those who think that not enough has been done in that way.

The changes that have taken place, unfortunately, have not yet made any difference to small and medium sized businesses and many provincial workers because their wages are not the same as in the capitals. I think the Government must draw conclusions from that and take the necessary steps to cut down on bureaucracy in this sphere and reduce social taxes, especially the wage tax.

Furthermore, we must work together to develop the labour market. And I think in this case we would do well to recall what the trade unions did in the past. Not everything that was done in the past should be denigrated and forgotten. In the past the trade unions were engaged in retraining personnel for new jobs, and that activity now takes on a new significance, it becomes a priority to be addressed jointly by the Government and employers. This is especially relevant to the provinces and small communities and towns: people there suffer the most when the core activities of local companies change because it is impossible to find a new job without the appropriate retraining.