Kazakhstan

11. Labor Policies and Practices

The July 2017 EBRD Kazakhstan Diagnostic Paper singles out skills mismatches across sectors as the fifth most important constraint that is holding back private sector growth in Kazakhstan.  The gaps create real operational challenges such as high recruitment and training costs, lower productivity and constraints on innovation and new product development, according to the EBRD.  The existing skills mismatches are not a result of lack of access in education, but rather failure to acquire job-relevant skills and competencies, the EBRD report reads.  The 2019 OECD report on Monitoring Skills Development through Occupational Standards in Kazakhstan echoes the EBRD findings – despite improvements in educational attainment and labor market participation, Kazakhstan faces challenges with respect to skill relevance and availability, especially among large and middle-sized companies.  Strengthening vocational education and training is critical, because skilled manual workers, with medium and high qualifications, represent 40 percent of the total workforce need, according to the OECD.

Many large investors rely on foreign workers and engineers to fill the void.  Kazakhstan approved a quota for 29,300 foreign workers for 2020.  As of February 1, 2020, Labor Ministry had issued 19,100 work permits.  Chinese workers received over 27 percent of all permits, with the rest going to foreign workers from Turkey, U.K., India, Uzbekistan, and others.

The Kazakhstani government has made it a priority to ensure that Kazakhstani citizens are well represented in foreign enterprise workforces.  In 2009, the government instituted a comprehensive policy for local content, particularly for companies in extractive industries.  The government is particularly keen to see Kazakhstanis hired into the managerial and executive ranks of foreign enterprises.  In November 2015, the government amended the legislation on migration and employment that resulted in new rules for foreign labor starting January 2017 (please see details in Part 5, Performance and Data Localization Requirements).  U.S. companies are advised to contact Kazakhstan-based law and accounting firms and the U.S. Commercial Service in Almaty for current information on work permits.  AIFC-registered entities may employ a foreign workforce without any work permits.

Kazakhstan joined the International Labor Organization (ILO) in 1993, and has ratified 24 out of 189 ILO conventions, including eight fundamental conventions pertaining to minimum employment age, prohibition on the use of forced labor and the worst forms of child labor, and prohibition on discrimination in employment, as well as conventions on equal pay and collective bargaining.  In March 2019, Kazakhstan’s Federation of Trade Unions proposed that the Kazakhstani government join five more ILO technical conventions on social security (minimum standards), minimum wage fixing, collective bargaining, part-time work, and safety and health in agriculture, but the country has not ratified any new ILO conventions since then.

In September 2017, the ILO expressed concern over Kazakhstan’s compliance with the Freedom of Association and Protection of the Right to Organize Convention and the Right to Organize and Collective Bargaining Convention by calling on the government to amend the relevant legislation in order to: (1) enable workers to form and join trade unions of their own choosing, (2) allow labor unions to benefit from joint projects with international organizations, and (3) allow financial assistance to labor unions from international organizations.  The Constitution and National Labor Code guarantee basic workers’ rights, including occupational safety and health, the right to organize, and the right to strike.  Amendments to the Labor Code since July 2018 leave many labor-related issues, including dismissals and layoffs, to the discretion of employers.  It imposes tighter collective bargaining restrictions on employees involved in labor disputes.  According to the Ministry of Labor and Social Protection, 33.4 percent of all working enterprises have collective agreements.  Kazakhstan’s three independent labor unions – the Federation of Trade Unions of the Republic of Kazakhstan (FTU), Commonwealth of Trade Unions of Kazakhstan Amanat, and Kazakhstan Confederation of Labor (KCL) – had over three million members, or 40 percent of Kazakhstan’s workforce, as of March 1, 2020.

Article 46 of the Labor Code gives the employer the right to change work conditions due to fluctuating market conditions with proper and timely notifications to employees.  Article 52 of the Labor Code gives the employer the right to cancel an employment contract in case of a decline in production that may lead to the deterioration of economic and financial conditions of the company.  Article 131 of the Labor Code allows for severance of payment of average monthly wages for two months in case of layoffs for economic reasons.  The Ministry of Labor and Social Protection is responsible for offering alternative job openings within state programs of the so-called Employment Road Map, alternative professional training, or temporary jobs to workers laid off for economic reasons.  The 2017-2021 Productive Employment and Mass Entrepreneurship National Program, run by the Ministry of Labor and Social Protection, aims at connecting workers with permanent jobs.  The program provides micro-loans and grants, and equips workers with basic entrepreneurial skills.

Chapter 15 of the Labor Code describes a mechanism for resolution of individual labor disputes via direct negotiations with an employer, mediation commission, and court.  Chapter 16 of the Labor Code identifies a mechanism for resolution of collective labor disputes via direct negotiations with an employer, mediation commission, labor arbitration, and court.

Labor unrest presents a risk where unemployment is high and where the bargaining power of limited skilled labor is relatively high, but authorities have been quick to intervene with controls and mitigating measures.  In June 2019, a violence broke out at the Chevron-operated Tengiz oilfield, in which large mobs of Kazakh men attacked dozens of their colleagues from countries like Jordan and the United Arab Emirates.  The unrest had ostensibly been triggered by an interpersonal conflict, though it was widely acknowledged that festering resentment about pay and working conditions underlaid the violence.  Another conflict that took place on August 12, 2019, in the Zhairem settlement of the Karaganda region reportedly had similar grounds — fifty Zhairem residents trespassed the site of the Zhairem enrichment plant, owned by KazZinc (i.e. Glencore International AG), and started a brawl with Turkish workers.  The altercation resulted in the minor injuries of six Turkish workers.  The regional police brought charges for hooliganism and property theft against seven Zhairem residents.

In September 2019, several strikes over living standards hit the Chinese-run companies in the Mangystau region.  At least 165 workers of Mobil Service Group Ltd that provides transportation services for Oil Construction Company LLP in the Kalamkas field and Karazhanbasmunai JSC in the Karazhanbas field in the Mangystau region went on strike on September 20, 2019 to demand a 100 percent increase of wages and to complain about getting paid up to ten times less than their western and Chinese colleagues.  The labor dispute was resolved after MSG management agreed to raise wages by 50 percent.

Approximately 24 workers of the Sinopec-run Karakudykmunay and Buzachi Operating companies went on strike on September 23, 2019, demanding a 100 percent wage increase.  Over 150 workers wrote letters to the company’s management and to the ruling Nur Otan party prior to the strike.  Another strike over low wages reportedly took place at Buzachi Operating on October 31, 2019, which was later dismissed by the company’s management, stating that it was a regular staff meeting.

On September 30, 2019, a local newspaper published on its website a video message  (https://www.lada.kz/aktau_news/society/73745-rabochie-esche-odnoy-kompanii-v-mangistau-trebovali-povysheniya-zarabotnoy-platy.html ) to President Tokayev allegedly recorded by Emir Oil workers, requesting a 50 percent increase in wages.  Kazakh-Malaysian oil company, Emir Oil Ltd, dismissed this information, stating that the company had been negotiating with workers and gradually implementing a pay increase since March 2019.

Security workers of KMG-Security, a subsidiary of KazMunayGas National Company (KMG NC), held a strike demanding a wage increase and improved working conditions in the oil town of Zhanaozen in the Mangystau region on January 27, 2020.  Their requests have been addressed by KMG NC.  The government is particularly sensitive to any signs of unrest in Zhanaozen, after a seven-month strike of oil workers in the town culminated in riots that killed 15 and injured over 100 in December 2011.

Workers’ rights to strike are limited by several conditions.  It may take over 40 days to initiate the strike in accordance with the law, representatives of labor unions report.  Workers can strike if all arbitration measures defined by law have been exhausted.  Strike votes must be taken in a meeting where at least half of workers are present, and strikers are required to give five days’ notice to their employer, include a list of complaints, and tell the employer the proposed date, time and place of the strike.  Courts have the power to declare a strike illegal at the request of an employer or the General Prosecutor’s office.  Employers may fire striking workers after a court declares a strike illegal.  The Criminal Code enables the government to target labor organizers whose strikes are deemed illegal.

The Labor Union Law generally restricts workers’ freedom of association.  Under the law, any local (and potentially independent) labor union must be affiliated with larger unions, and the right to freely establish and join independent organizations without prior authorization is restricted.  On the basis of this law, in 2016 authorities did not allow the registration of one independent labor union and ordered its liquidation.  In 2018, the U.S. government initiated a review of Kazakhstan’s compliance with the Generalized System of Preferences following a petition by the AFL-CIO, based on the country’s alleged failure to afford internationally-recognized workers’ rights.  The AFL-CIO petition highlights the Law on Unions and also raises concerns about the use of Article 404 of the Criminal Code, which appears to prohibit unregistered organizations.  The amendments were signed into law by President Tokayev on May 4, 2020.  The law removes the requirement of affiliation with a large labor union for local labor unions.  Other changes include softening restrictions on strikes.  Workers employed in the railway, transport and communications, civil aviation, healthcare, and public utilities sectors may strike, if they maintain minimum services for the population, that is, provided there is no harm caused to other people.  The law also reduces the penalty for calls to continue strikes declared illegal by a court.  If such calls do not result in a material violation of rights and interests of other people, they will be classified as criminal misconduct, and penalty will be limited to fines or hours of community service.  The previous law classified such calls as criminal offences, and the penalties included restriction on freedom of movement or imprisonment.

Please see details at the Human Rights Report at: https://www.state.gov/reports/2019-country-reports-on-human-rights-practices/.

The official unemployment rate in Kazakhstan has regularly been near five percent in recent years.  In 2019, Kazakhstan’s unemployment rate stood at 4.8 percent, and youth unemployment rate was 3.7 percent.

12. U.S. International Development Finance Corporation (DFC) and Other Investment Insurance Programs

The Overseas Private Investment Corporation (OPIC) and the government of Kazakhstan signed an Investment Incentive Agreement in 1992, and OPIC has been active in Kazakhstan since 1994.  In January 2018, OPIC signed a Memorandum of Understanding with KazakhInvest JSC to support U.S. investment in Kazakhstan and improve collaboration between the two countries.  The U.S. Development Finance Corporation (DFC), the successor of OPIC, seeks commercially viable projects in Kazakhstan’s private sector and offers a full range of investment insurance and debt/equity stakes.  Kazakhstan is also a member of the Multilateral Investment Guarantee Agency, which is part of the World Bank Group and provides political risk insurance for foreign investments in developing countries.

Kyrgyz Republic

11. Labor Policies and Practices

There is significant competition for skilled and educated individuals in the Kyrgyz labor market as many qualified Kyrgyz citizens find lucrative job opportunities abroad, and the nation’s education system has largely failed to keep pace with advancing educational needs within many sectors. International organizations are generally able to employ competent staff, often bilingual in English or other languages. However, reports indicate there is a shortage of highly qualified local candidates in IT, mining, energy, and manufacturing, forcing international organizations to rely on expatriates for these skills. Literacy in the Kyrgyz Republic is approximately 97 percent. The official unemployment rate is approximately seven percent, though experts estimate the number of actual unemployed individuals exceeds this figure. Additionally, approximately one million Kyrgyz citizens work abroad because of limited opportunities in the Kyrgyz Republic.

There are no government policies that require hiring Kyrgyz nationals, though it is often added as a condition for investment, particularly in the mining sector. There are no restrictions on employers adjusting to fluctuating market, including hiring and firing workers at will. Many private companies use temporary or contract workers. The Labor Code does not provide any special conditions in order to attract investment. Labor unions are independent and are not subject to state bodies, employers, political parties, or other unions. In practice, labor unions are not very active when it comes to the protection of workers’ rights.

Workers have the right to form and join trade unions. The law allows unions to conduct their activities without interference, organize, and bargain collectively. Workers may strike, but the requirement to receive formal approval has made striking difficult and complicated. The law prohibits government employees from striking, but the prohibition does not apply to teachers or medical professionals. The law does not prohibit retaliation against striking workers. Labor disputes are settled by Commission for Labor Disputes (established within all organizations with 10 or more employees), by the authorized state body, or by courts of the Kyrgyz Republic. The employee has the right to choose one of these bodies to settle the dispute.

Safety and health conditions in factories are generally poor. The law establishes occupational health and safety standards, but to a large extent the Kyrgyz government did not enforce them. Despite the moratorium on all business inspections from January 1, 2019 until January 1, 2021, the State Labor Inspectorate is responsible for protecting workers and carrying out inspections in the event that worker safety and well-being is compromised. Due to staffing problems within the State Labor Inspectorate and inadequate transportation resources to conduct on-site inspections, activities are limited and business compliance is uneven. Workers in the informal economy had neither legal protection nor mandated safety standards. See more at: http://www.state.gov/j/drl/rls/hrrpt/humanrightsreport/index.htm#wrapper

While the Labor Code of the country complies with all required international laws and treaties, there is a gap in protecting the rights of individuals employed by private companies. Many employees are hired based on basic or even oral agreements and lack knowledge of their rights.

In January 2017, amendments to the Labor Code of the Kyrgyz Republic entered into force that strengthened labor rights and protections for people under the age of 18. The law now prohibits people under the age of 18 from being sent on business trips, engaging in overtime work, night shifts, and working on days off or official holidays. However, child labor laws are not uniformly enforced.

The U.S. Embassy is unaware of the Kyrgyz government’s efforts to implement OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Afflicted and High-Risk Areas or OECD or UN Guiding Principles on Business and Human Rights.

12. U.S. International Development Finance Corporation (DFC) and Other Investment Insurance Programs

The United States signed a bilateral OPIC (predecessor to DFC) agreement with the Kyrgyz Republic in 1992. OPIC recently financed part of the campus expansion of the American University of Central Asia in Bishkek and the University of Central Asia in Naryn.

Bank lending and international donor financing remain the primary mechanisms by which businesses in the Kyrgyz Republic seek to fund expansion projects. Few investment funds exist and operate in the Kyrgyz Republic. There are no new DFC-funded projects in the Kyrgyz Republic to date but the lower-middle income country is considered a priority for DFC funding opportunities. The DFC currently supports two portfolio loan guarantees with two local banks to increase lending to Kyrgyz businesses. DFC products have the potential to facilitate social and commercial infrastructure developments, expand small and medium enterprise lending and assist the development of private equity funds in the Kyrgyz Republic, which are currently few in number. 13. Foreign Direct Investment and Foreign Portfolio Investment Statistics

Tajikistan

11. Labor Policies and Practices

As of November 2019, the official unemployment rate in Tajikistan was 2.1 percent, but this does not include the roughly one million citizens (12.5 percent of the population) that seasonally migrate in search of work in other countries – primarily to Russia.

According to information provided by the Ministry of Labor, Migration, and Employment, Tajikistan’s labor force is comprised of 5.2 million workers.  Due to demographic growth, the World Bank estimates that demand for jobs exceeds job growth by a ratio of two to one.

Unskilled labor is widely available, but skilled labor is in short supply, since many Tajiks with marketable skills choose to emigrate due to limited domestic employment opportunities.  Corruption in secondary schools and universities means degrees may not accurately reflect an applicant’s level of professional training or competency.

Due to its weak education system, Tajikistan’s domestic labor force is generally becoming less skilled, and is ill equipped to provide international standards of customer service and management.  Foreign businesses and NGOs report difficulty recruiting qualified staff for their organizations in all specialties.

The Ministry of Labor, Migration and Employment announced a plan to expand its network of training centers at which Tajik workers can become more marketable.  The curriculum at these centers is primarily focused on the migrant community, offering training in English, Russian, culture, and history.  It also provides certification of a worker’s existing skills, and short-term vocational training as welders, electricians, tractor operators, textile workers, and confectioners.

Article 36 of Tajikistan’s labor code gives employers the right to change workers’ contracts (remuneration, hours, responsibilities, etc.) due to fluctuating market conditions.  If the worker does not accept the amended contract, the employer may terminate the worker, but the worker can claim a severance payment equivalent to two months’ salary.

Tajikistan’s labor code does not include any provisions for waiving labor regulations to attract or retain investments, but the Tajik government has waived the 70 percent requirement for the employment of Tajik workers in some cases.

There are no special regulations regarding treatment of labor in Tajikistan’s four free economic zones.

The labor market favors employers.  Although the majority of workers are technically unionized, most are not aware of their rights, and few unions effectively advocate for workers’ rights.  The Tajik government controls unions.  The national trade union federation has not had many disputes with the government.  Tajikistan has no formal labor dispute resolution mechanisms.  Although collective bargaining can occur, it is rare. During 2019, there were no significant labor strikes in Tajikistan.

Tajikistan’s labor code regulates employer-employee relations.  The domestic labor code includes reference to international labor standards but employers may frequently violate or misinterpret procedures.

12. U.S. International Development Finance Corporation (DFC) and Other Investment Insurance Programs

There are opportunities for the Development Finance Corporation to work in Tajikistan. The Overseas Private Investment Corporation (OPIC) has supported a potato chip factory, an expansion at the University of Central Asia, and consulting companies.

Tajikistan signed an investment incentive agreement with the United States in 1992, with provisions for issuing investment insurance, loans, and guarantees administered by OPIC.

Turkmenistan

11. Labor Policies and Practices

Labor issues are governed by the Labor Code of Turkmenistan (last amended in July 2009), the Social Welfare code, and a number of regulations approved by presidential resolutions.  Turkmenistan joined the International Labor Organization in 1993.  Unemployment and underemployment are major societal issues, particularly among Turkmenistan’s youth and in rural communities.  Unofficial estimates of unemployment range from 10 to 50 percent.  Due to a severe shortage of jobs and low salaries in the country, anecdotal evidence indicates that growing numbers of young Turkmen have emigrated or are emigrating to other countries, including Turkey, Russia, and other former Soviet republics.  In order to stop outward migration, the State Migration Service of Turkmenistan on numerous occasions has arbitrarily denied exit to citizens at the airport and border points.  In February 2016, President Berdimuhamedov signed a decree  On Matters of Registration of the Individuals Arriving in Ashgabat for Employment Purposes,” (https://habartm.org/wp-content/uploads/2016/02/Karar1.pdf ) which makes it more difficult for residents from other regions to seek employment in the capital city, Ashgabat.  The decree introduces a work permit system by the Ministry of Labor and Social Protection, which may issue work permits for a maximum of one year.  Ashgabat residents are given priority over non-residents for job openings in the city.  The government has also introduced a requirement that 90 percent of any firm’s workforce be Turkmen citizens.  The government continues to be the largest employer in the country.  The Law on Child Labor (2004) prohibits the employment of children under the age of 16 and makes employment in hazardous and harmful labor illegal for any individual under the age of 18.

Turkmenistan’s labor regulations require that all vacancies be posted at local employment offices.  Most vacancies are for low-skilled jobs.  Only a few state agencies post job advertisements in the local newspaper.  Most government positions are filled through personal connections.  Employment offices have not been effective tools in reducing unemployment, or in providing suitable candidates for international companies.  The National Center of Trade Unions of Turkmenistan, the successor to the Soviet-era system of government-controlled trade unions, is the only trade union association allowed in the country.  Due to low oil prices, the government has taken steps to reduce expenses by laying off some public sector employees.  There have been many reports of ministries not meeting payroll requirements for staff.  Article 294 of the Labor Code of Turkmenistan states that the courts handle employer-employee labor disputes.  Article 368 states that disputes arising out of collective bargaining and collective agreements can be investigated by commissions on labor disputes, trade unions of enterprises, and the court system.  Although the Labor Code allows for collective bargaining, in practice it is not used and the courts do not perform the labor dispute resolution function they are assigned.

The International Labor Organization’s Turkmenistan-specific profile is available at:

https://www.ilo.org/dyn/normlex/en/f?p=NORMLEXPUB:11110:0::NO::P11110_COUNTRY_ID:103551 

The official workday in Turkmenistan is eight hours, with the standard work week consisting of 40 hours over five days.  The 2009 Labor Code reconfirmed a 40-hour work week, protected workers’ rights by promoting the role of trade unions, guaranteed job security by restricting short-term contracts, and extended the duration of annual leave from 24 calendar days to 30 calendar days.  In practice, government and many private sector employees are required to work 10 hours per day and/or a sixth day without compensation.  Health and safety regulations exist but are not commonly enforced.  Foreigners with government permission to reside in Turkmenistan may work and are subject to the same labor regulations as citizens unless otherwise specified by law.

Turkmenistan was listed as a Tier 3 country in the State Department’s most recent Trafficking in Persons Report.  This means that the Government of Turkmenistan does not fully comply with the minimum standards outlined in the Trafficking Victims Protection Act of 2000  and has not made significant efforts to do so.  Turkmenistan’s Tier 3 ranking is due in part to the government’s continued mobilizations of adult citizens for forced labor in the annual cotton harvest and in public works projects.

The Department of State’s 2019 Trafficking in Persons Report for Turkmenistan is available at:  https://www.state.gov/reports/2019-trafficking-in-persons-report-2/turkmenistan/.

On May 18, 2018, U.S. Customs and Border Protection issued a Withhold Release Order for all Turkmenistan cotton or products produced in whole or in part with Turkmenistan cotton.   U.S. Customs and Border Protection issued the order under the authority of the the Trade Facilitation and Trade Enforcement Act of 2015 which includes prohibitions on the importation of products made by forced labor, including child labor.

12. U.S. International Development Finance Corporation (DFC) and Other Investment Insurance Programs

Turkmenistan signed an Investment Incentive Agreement with the United States in 1992, but there has been no investment insurance, investment guarantees, or financing provided by the Overseas Private Investment Corporation (OPIC) for Turkmenistan.  The recently-formed U.S. International Development Finance Corporation (DFC), which consolidated OPIC and USAID’s Development Credit Authority, is currently evaluating opportunities for financing and investment insurance in Turkmenistan.

Uzbekistan

11. Labor Policies and Practices

During 2019, the population of Uzbekistan increased by 650,300 people (2%) to 33,905,800.  According to publicly available statistics, 30.5% of the population is under 16 years old; 58.9% is working age (16-60); and 10.6% are 60 years old and older.  The Ministry of Employment and Labor Relations of Uzbekistan (MOL) reports indicate that the total number of labor resources in 2019 was about 19 million people (0.9% increase year-on-year).  13.54 million of them were considered employed (2% increase year-on-year), wherein 5.7 million people were employed officially, while remaining 7.8 million were considered as self-employed.  The latter includes, among others, 5.37 million self-employed people and unregistered traders (the informal economy workforce), and about 2 million labor migrants.  The share of non-agricultural workforce is about 73%.  The official number of unemployed is 1.33 million people, or 9% of the total labor resource pool.  The level of youth unemployment is 15%, and the level of female unemployment is 12.8%.  Note: The accuracy of given statistics is based on records of the residents’ registration offices and studies conducted by the MOL.  It does not always reflect the actual situation in the country.  The next national census in Uzbekistan is expected in 2022, while the last one was in 1989.  End note.

With the closure or downsizing of many businesses, it is easy to find qualified employees, and salaries are low by Western standards.  According to both government and independent analysts’ statistics, 14% of the population live below the poverty level, and approximately 48 percent of the employed population have low-productivity and low-income jobs.  Accordingly, Uzbekistan is the largest supplier of labor migrants among former Soviet Union republics.

At 99 percent, literacy is nearly universal, but most local technical and managerial training does not meet international business standards.  Foreign firms report that younger Uzbekistanis are more flexible in adapting to changing international business practices but are also less educated than their Soviet-trained elders.  Widespread corruption in the education sector has lowered educational standards as unqualified students purchase grades and even admittance to prestigious universities and lyceums.

Legislation requires companies to hire Uzbekistani nationals for specified positions in banking and auditing companies.  The chief accountant must be an Uzbekistani national, as should either the CEO or any one member of the board of directors.  Only Uzbekistani nationals can be tour guides.

According to Uzbekistan’s Labor Code, labor-management relations should be formalized in a fixed-term or temporary employment contract.  The maximum length of a single fixed-term contract is 60 months (https://www.doingbusiness.org/en/data/labormarketeconomy/uzbekistan).  The Labor Code and subordinate labor legislation differentiate between layoffs and firing.  Employees can terminate their employment by filing written notice two-weeks prior or applying for leave without pay.  Layoffs or temporary leave without pay can be initiated by an employer if the economic situation declines.  For firing (severance), the employer should personally give two months’ advance notice in the case of corporate liquidation or optimization, two weeks’ advance notice in the case of an employee’s incompetence, and three days’ advance notice in the case of an employee’s malpractice or unacceptable violations.  In case of severance caused by corporate liquidation or optimization, an employee should receive compensation, which should not be less than two average monthly salaries paid during their employment plus payment for unused leave (if another form of compensation was not agreed to in the employment contract).  In reality, however, many businesses choose to avoid signing formal contracts with employees, especially those involved in seasonal agricultural or construction work.

Officially, labor legislation cannot be waived or applied differently for private or foreign-owned enterprises, including those that operate in free and special economic zones.  On March 4, 2020, Uzbekistan joined the Hague Conference on Private International Law.

The new Law on Trade Unions (ZRU-588) was adopted in December 2019.  According to this law, all trade union activities should be based on the principles of the compliance, voluntariness, non-discrimination, independence and self-governance, equality, transparency and openness.  The law guarantees rights of trade unions and their associations and protects them from illegal interventions of government agencies, officials and employers.  Currently, the Board of the Federation of Trade Unions of Uzbekistan incorporates 37,632 primary organizations and 14 regional trade unions, with official reports of 60 percent of employees in the country participating.  These trade unions are all government owned and operated, including the Federation of Trade Unions.

By law, all employees of either local or foreign-owned enterprises operating in Uzbekistan have the right to:

  • fair and timely payment of wages that should not be less than the minimum monthly salary amounts set by the government;
  • a standard workweek of forty hours, with a mandatory rest period of twenty-four hours and annual leave;
  • overtime compensation as specified in employment contracts or agreed to with an employee’s trade union, which can be implemented in the form of additional pay or leave. The law states that overtime compensation should not be less than 200 percent of the employee’s average monthly salary rate (broken down by hours worked).  Additional leave time should not be less than the length of actual overtime work;
  • working conditions that meet occupational health and safety standards prescribed by legislation;
  • compensation of any health or property damages incurred as a result of professional duties through an employer’s fault;
  • professional training;
  • formation and joining of labor unions;
  • pensions; and
  • legal support in protection of workers’ rights.

There is no single state institution responsible for labor arbitration.  The general court system, where civil and criminal cases are tried, is responsible for resolving labor-related disputes.  This can be done on a regional or city level.  Formally, workers can file their complaints through the Prosecutor General’s Office.  The Ministry of Employment and Labor Relations should provide legal support to employees in their labor disputes.

The law neither provides for nor prohibits the right to strike.  In recent years, SOE employees in the mining sector and workers involved in various large state-facilitated civil construction projects conducted strikes, protesting against salary payment delays and demanding improvement of their working conditions.  Reportedly, law enforcement authorities inspected the employing company, which eventually addressed most of the issues raised by the workers.  There is no public information about the role of official unions in these negotiations.

Although employees in Uzbekistan enjoy many rights by law, in practice these laws are subject to arbitrary and inconsistent interpretation.  For example, the law prohibits compulsory overtime – and only 120 hours of overtime per year is permitted.  In practice, overtime limitations are not widely observed, and compensation is rarely paid.  Wage violations have become more common in recent years.

14 conventions of the UN’s International Labor Organization (ILO) are officially in force in Uzbekistan:

  • Forced Labor Convention;
  • Freedom of Association and Protection of the Right to Organize Convention
  • Right to Organize and Collective Bargaining Convention;
  • Equal Remuneration Convention;
  • Abolition of Forced Labor Convention;
  • Discrimination [Employment and Occupation] Convention;
  • Minimum Age Convention;
  • Worst Forms of Child Labor Convention;
  • Employment Policy Convention;
  • Forty-Hour Week Convention;
  • Holidays with Pay Convention;
  • Maternity Protection Convention [Revised];
  • Workers’ Representatives Convention; and
  • Collective Bargaining Convention.

The most recent observations of the ILO’s Committee of Experts on the Application of Conventions and Recommendations (CEACR) can be reviewed here: https://www.ilo.org/dyn/normlex/en/f?p=NORMLEXPUB:11200:0::NO::P11200_COUNTRY_ID:103538

The law prohibits all forms of forced or compulsory labor, including by children, except as legal punishment for offenses such as robbery, fraud, or tax evasion, or as specified by law.  Uzbekistan has eliminated the systematic use of child labor in the annual cotton harvest and has implemented reforms to significantly improve its record on adult forced labor.  Despite strong political will in the central government to eradicate adult forced labor, at the local level its use in the cotton harvest is still reported, albeit in steadily decreasing numbers.  The Ministry of Employment and Labor Relations establishes and enforces occupational health and safety standards.  Labor inspectors conduct routine inspections of small and medium-sized businesses once every four years and inspect larger enterprises once every three years.   The labor inspectorate – significantly expanded in size — was previously unable to conduct unscheduled inspections, but these are now legal and in regular use.

In 2019, Uzbekistan adopted a number of labor related laws and regulations, including:

  • Law on Trade Unions (ZRU-588, entered into force December 6, 2019)
  • Law Ratification of Protocol of 2014 to the ILO Forced Labor Convention 29, 1930. (ZRU-545, June 25, 2019)
  • Presidential Decree on Additional Measures to Improve the System of Countering Trafficking in Persons and Forced Labor (UP-5775, July 30, 2019)
  • Presidential Decree and Government Resolution on introduction of Unified National Labor System interagency operational software and my.mehnat.uz portal (PP-4502, October 31, 2019, and N971, December 5, 2019)
  • Presidential Decree on Measures to Improve the Personnel Policy and the System of Public Civil Service in the Republic of Uzbekistan”(UP-5843, October 3, 2019)
  • Amendments to safety on job regulations in various industries and social service sectors.

12. U.S. International Development Finance Corporation (DFC) and Other Investment Insurance Programs

The U.S. International Development Finance Corporation (DFC) began working in Uzbekistan in 1992 (as the Overseas Private Investment Corporation, or OPIC) and has loaned approximately $229 million over the course of its operations in Uzbekistan.  On May 17, 2018, the Corporation and the GOU officials signed a Memorandum of Cooperation (MOC) on bolstering investment in natural resources, energy, infrastructure and other critical sectors.  DFC did not initiate any new projects in FY2019.  Uzbekistan is a developing country member of the Multilateral Investment Guarantee Agency.

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The Lessons of 1989: Freedom and Our Future