Borrowed labor in Russia is present (according to various experts) from several years to several decades, that is, some of its manifestations were noticed back in the USSR. One way or another, this form of relationship between the employer and the employee is not new to us. In the scientific literature, opinions on the usefulness of borrowed labor in Russia were very different, but most experts said that a separate law on borrowed labor was needed. And finally, our legislator got to the point of adopting the necessary sources of regulatory regulation in this area.
When power is not idle
In May 2014, the Russian authorities adopted a federal law introducing significant changes to legal acts regarding the registration of labor relations between an employee and an employer. Amendments were made to the Law "On Employment" (from 1991), the Labor Code of the Russian Federation and a number of other significant legal acts. First, it was adopted by the State Duma (in April 2014), then it was approved by the Federation Council and finally signed by the President. Often, these amendments are presented in the singular as the Law on the Prohibition of Contracted Labor.
What new has this regulatory act brought to Russian business? Will business structures, tax authorities, and finally, foreign investors, whose participation in the development of the Russian economy still remain important, be satisfied with this law?
Briefly about borrowed labor
According to the general definition, borrowed labor (also called outstaffing) is a relationship between three parties: an employee, an employer and an intermediary between them (as a rule, this is a specialized HR agency). In what cases is this type of relationship most often practiced? For example, it may be seasonal work or sales during a certain peak period. There are types of goods that are bought most actively in the summer (ice cream, soft drinks).
To organize, say, street trading in these types of products, the employer company hires temporary sellers, “borrowing” them from an HR agency. The latter, in turn, concludes full-fledged labor contracts with traders . For a long time, borrowed labor was not regulated by law in any way: the Labor Code of the Russian Federation did not contain any comments on the subject of interaction between the employee and the employer in this format. But in recent years, attention to this type of labor relationship has been very high.
The legislator is against
The State Duma of Russia in several readings approved a bill to amend the labor legislation of the country. Some experts say that these amendments do not imply a ban on borrowed labor as such, but only limit the intensity of its application and change some conditions. In particular, employees who came from an HR agency cannot, according to the bill, occupy more than 10% of the company's staff.
Also, these people cannot be invited if the main employees of the company go on strike or refuse to work legally (for example, in case of non-payment of salaries). In addition, the law provides that borrowed workers must not be allowed to work at facilities with an increased level of danger. And most importantly - the conditions for wages, as well as working conditions for the same positions among regular employees of the company and borrowed should not differ in any way. Experts also note that the innovations will not affect firms that provide services in the format of outsourcing.
The main thing about the law
Many employers and trade unions only welcomed the fact that the year of legislative registration of such a phenomenon as borrowed labor is 2014, since, according to some experts, right now the Russian economy is in a transitional phase in which the role of the state is very important. According to the normative legal act signed by the President of Russia, contingent labor is work performed by a person by order of a direct employer, but at the request of third parties (physical or legal). The law also introduces special measures that prevent employers from evading the signing of full-fledged labor contracts according to the Labor Code. Those agencies that are looking for commissioned employees will need to be accredited by government agencies. Such entities (according to the law) cannot be created by individual entrepreneurs or legal entities that pay taxes in a preferential regime. The authorized capital of such an agency should be at least 1 million rubles, and the director of the company must have a higher education.
The origins of the legislative initiative
Who initiated the law that issued the prohibition of contingent labor? The first steps in this direction were taken back in 2011. The State Duma Committee, which manages issues related to social policy and labor relations, created a working group that was called upon to prepare a legislative act to abolish the phenomenon of outstaffing. Various political and social institutions, as well as the employers themselves, were involved in the discussion. Initially, the bill assumed that relations within the framework of outstaffing would be brought to a status similar to that of labor and state bodies. The employee would inform the labor inspectorate that he was working under conditions constituting contingent labor, and the state agency, in turn, would instruct the employer to bring the contract in accordance with the norms of the Labor Code. At the time of the consideration of the bill, this function was performed by the courts: deputies, therefore, proposed that the labor inspectorate be given additional powers.
Foreign labor
Outstaffing is a phenomenon that came to Russia from developed countries. In France, for example, contingent labor is one of the most popular formats of relations between an employee and an employer in the construction industry. Experts believe that the outstaffing market in the world is steadily expanding. One of the highest share of leased labor is in South Africa (about 7.1%), in Europe - up to 1.8%, in the USA - within the limits of similar values. Slightly less in Japan - about 1.5%. Loan labor is also used in Latin America. In European countries, the majority of outstaffed employees are young people under the age of 30 who are employed in low-skilled jobs. In the USA, however, wage laborers are usually people in more mature years. Some experts believe that outstaffing as a phenomenon arose in response to imperfect labor laws. There are those who have the opposite point of view, citing Great Britain as an example - borrowed labor is practiced very actively there, and the laws governing the relations of workers and employers are rather soft.
What do unions think
Experts believe that borrowed labor, the law on the ban of which was adopted in Russia, should cause a positive response among the trade unions. There is a version that it was representatives of professional organizations who initiated the consideration of this legislative act. The experts believe that the position of these public institutions is quite understandable - representatives of many trade unions are sure that the use of contingent labor is only a tool for overstating the company's performance indicators.
In this case, the statistics will illustrate the improvement in employee productivity and the increase in salaries. Hence the preferences for the owner - he is highly appreciated in the market, and investors, for example, or banks with favorable credit offers, can pay attention to him. Also, some experts believe that many unions abroad are fundamentally opposed to outstaffing, and this trend would inevitably come to Russia.
Anticipating the Law
Before amendments to the labor laws regarding outstaffing were introduced in Russia, relations between the employee and the employer in formats close to borrowed labor were practically not regulated in any way. And this despite the fact that the frequency of their occurrence was very, as many experts believe, significant. The labor market, according to specialists in the personnel market, began to form in Russia in the early 2000s.
In 2004, for example, according to some analysts, the outstaffing market in the Russian Federation exceeded $ 80 million. For a long time, Russian lawmakers lagged behind their European counterparts in matters of regulation of contingent labor. This entailed some uncertainty for the workers, who, on the one hand, seemed to work, but, on the other, within the framework of a not quite familiar status.
Where else was borrowing prohibited?
History knows many precedents when the states of the world adopted laws on the prohibition of contingent labor and formats of relations between employers and employees close to outstaffing. For example, in the United States in 1934, employment agencies were banned by law (though not for long - for 3 years). In 1948, this restriction was reintroduced and lasted until 1997. Borrowed labor (with some industry exceptions) is prohibited in Turkey. Interestingly, in Namibia, lawmakers have long wondered what to do with outstaffing. In 2007, borrowed labor was banned in this African country, but in 2009 it was again allowed.
Some experts believe that such a scenario is not ruled out in Russia. Now that outstaffing is prohibited, there may be market players who are very dissatisfied with this state of affairs, as a result of which the legislator may make concessions. Some experts also believe that, in addition to outstaffing, there are many other types of labor relations that would be nice to regulate at the level of federal laws.
The ambiguity of the law
Experts also have such a version that borrowed labor is only partially prohibited by the state - rather, it is even allowed, albeit implicitly. The legislator thereby gave the participants of this field of activity the opportunity to work in a civilized form, as opposed to the lack of legal regulation in past years. The adopted legal act allows the fulfillment of labor functions by employees whom the employer temporarily sends to another office or another city (in accordance with article 351.3 of the Labor Code of the Russian Federation). Another condition is that a specialist registered for one legal entity can work for another if the first company is controlled by the second (or vice versa).
The law also determines that in some cases, the design of labor relations in the format of outstaffing should be approached taking into account the opinion of the trade union organization - we have already said about the interest in borrowed labor of these structures. For example, this is possible if the number of outstaffing employees in the company is more than 10 percent of the staff.
Employer Responsibility
The law on the prohibition of contingent labor, or rather, amendments to the Labor Code of the Russian Federation (it’s just that a wording has already been established in the business community that involuntarily turns this regulatory act into an independent one) defines a number of criteria for employer responsibility in areas related to outstaffing. For example, borrowed labor cannot be applied in areas of hazard classes I and II, in hazardous production, and also for personal gain, for example, to obtain any license or other authorization document. The salary conditions for borrowed employees should not be inferior to those for full-time employees of the company.