30.04.09

Employment agencies in Russia are demanding the legalization of contract and agency labor. In their opinion, this would decrease tensions in the labor market and may relieve unemployment problems in the country. Legislators, meanwhile, do not see advantages in this form of employment and do not intend to take any action until given instructions by higher bodies.

On April 10th, at the conference “Temporary Personnel as a Means of Combating Unemployment," employment agencies formed a united front in support of the legalization of agency labor. They are convinced that the crisis has given reason to re-examine their services. Among their arguments are preventing growth in unemployment numbers and the high salaries earned by temporary personnel.

Agency labor concerns outstaffing – where employees work in one office but are actually employed by an agency, and outsourcing – the transfer of certain business or production processes or services.

The temporary personnel industry is growing 20-30% a year and will continue to grow. This year, the industry has grown 25% compared to last year. The service is frequently used the FMCG sector, the financial and banking sector, and IT/Telecom. According to Irina Starostina, the personnel director for Nestle Russia, "We have ten production sites in ten cities. In seven of them we use agency labor." The crisis has already given an impetus to the development of a "semi-legal" outstaffing. "To work officially has already begun to be unprofitable for many," fears Olga Banketsina, the head of Coleman Services. Companies don't state directly on their websites that tax avoidance is a great reason to sign up at a temp agency, she notes.

The law does not expressly prohibit outstaffing, but there are no rules which govern the relations between employer, agency, and employee in cases of outstaffing.

Experts from the Center of Social and Labor Rights believe that, if private agencies are looked upon as a mediator who provides the worker with employment and the employer with employees, there will be no problems. The difficulty is that agency labor erodes employer responsibility. According to lawmakers, the main reason for the legalization of agency labor is to protect the labor market from unscrupulous users and providers.

A representative from the State Duma, having heard the agency arguments, did not give them any hope for legislative acts to improve the sector. A formal order to do something in this area does not exist. There must be political will.

Translated by Alinga Consulting Group.
 

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