INTERMEDIATION IN EMPLOYMENT ABROAD: STATUS AND REGULATION
The issue of labor migration is one of the urgent problems of modern Ukraine. According to expert estimates, up to 3 million Ukrainian citizens currently work abroad. The channels of labor migration of Ukrainian citizens are independent job search, use of travel agencies, direct invitation of a foreign party, and use of services of business entities engaged in mediation in employment abroad.
Mediation in employment abroad is one of the 68 types of economic activity that, in accordance with clause 56 of Article 9 of the Law of Ukraine "On Licensing Certain Types of Economic Activity", are subject to licensing by the Ukrainian state.
The existence of a permitting system for economic activity in employment mediation is practiced in many countries of the world (Russian Federation, Belarus, Lithuania, Latvia, Estonia, Czech Republic, Slovakia, Poland, Italy, Switzerland, Ireland, Bulgaria, Cyprus, Turkey, United Arab Emirates, Korea, Japan, USA and Canada). It is a mobile means of combining the demand and supply of labor and a reliable mechanism of social protection of citizens. By Resolution of the Cabinet of Ministers of Ukraine dated November 14, 2000 No. 1698 "On Approval of the List of Licensing Authorities", the licensing authority for mediation in employment abroad is the Ministry of Labor and Social Policy.
According to the Licensing Conditions for conducting economic activity in mediation in employment abroad (approved by the joint order of the State Committee for Regulatory Policy and Entrepreneurship and the Ministry of Labor No. 155/534 dated December 19, 2001), mediation in employment abroad is the provision by business entities of services for finding employment in accordance with employers' requests for vacant jobs (vacant positions) and the provision of informational and consulting services regarding employment opportunities, conditions and amounts of remuneration, names and locations of employers.
Every year, the structures engaged in mediation in employment abroad provide employment services only to a small number of Ukrainian citizens – labor migrants, namely 1-2% of the total number of migrant workers working abroad. Ukrainian citizens who find employment abroad through licensed intermediary structures legally obtain work abroad and are socially protected by foreign employers.
The requirements for business entities of Ukraine regarding activities on mediation in employment abroad are determined by the following regulatory and legislative acts: the Law of Ukraine "On Licensing Certain Types of Economic Activity", the Law of Ukraine "On Foreign Economic Activity", Resolution of the Cabinet of Ministers of Ukraine No. 756 dated 04.07.2001 "On Approval of the List of Documents Attached to the Application for a License for a Particular Type of Economic Activity", the order of the State Committee for Regulatory Policy and Entrepreneurship and the Ministry of Labor No. 155/534 dated 19.12.2001 "On Approval of the Licensing Conditions for the Conduct of Economic Activity on Mediation in Employment Abroad", and the order of the State Committee for Regulatory Policy and Entrepreneurship and the Ministry of Labor No. 78/141 dated 24.06.2004 "On Approval of the Procedure for Control over Compliance with the Licensing Conditions for the Conduct of Economic Activity on Mediation in Employment Abroad".
Among the main requirements for the activities of licensees is the need for documentary confirmation of the status of a foreign employer or intermediary (involved in the employment of Ukrainian citizens), relations between foreign partners and licensees in accordance with foreign economic contracts in the field of employment of Ukrainian citizens abroad, and relations between licensees and the person who applied to them for employment services, which are formalized by a contract.
Business entities holding a license from the Ministry of Labor operate only with those foreign partners that work on the basis of permits for the employment of foreigners issued to employers, or licenses for conducting intermediary activities in the employment of foreigners issued to intermediaries. Appropriate registration documents of the foreign employer or intermediary, foreign economic contracts, and draft employment contracts are also provided.
A foreign economic contract (agreement) for the provision of intermediary services in employment abroad (foreign economic contract) is a written agreement between a business entity and a foreign employer (its counterparty) or a foreign intermediary. The content of the foreign economic contract must comply with the legislation of the country of employment and international treaties of Ukraine. It is aimed at establishing rights and obligations in foreign economic activity for the selection of workers needed by the employer or foreign intermediary.
The draft employment contract is a document certified by the foreign employer that must comply with the legislation of the country of employment and international treaties of Ukraine. It contains the main details of the employer, professional requirements for the employee, information on the nature of the work, working conditions, remuneration and accommodation on the territory of the country of employment, social protection, including insurance, the term of the contract, conditions for its renewal and termination, and the procedure for covering transport costs for the entry and exit of the Ukrainian worker to and from the country of employment. A component of the draft employment contract is also information on the employee's liability to the employer in accordance with the employment contract.
A contract between a licensee and a client is an agreement on the provision to the client of mediation services for employment abroad. It specifies the list and cost of services, the rights and obligations of the parties under Ukrainian legislation, methods for resolving disputes, and the liability of the licensee and the client for the fulfillment of the contract's terms.
Guided by legislative acts in the field of licensing, the Ministry of Labour has created an effective system of state coordination of the activities of business entities providing mediation services for employment abroad, which includes:
- regulation of the issuance of licences by business entities in accordance with legal requirements;
- coordination of the activities of business entities in the field of mediation in employment abroad;
- cancellation of licences of business entities in accordance with legal requirements;
- conducting scheduled and unscheduled inspections of compliance by business entities with licensing conditions for carrying out economic activity in mediation in employment abroad;
- information support for the activities of licensees;
- organizational and methodological support for the activities of the Commission of the Ministry of Labour and Social Policy of Ukraine on licensing mediation in employment abroad and granting foreigners permits for employment in Ukraine.
The Commission of the Ministry of Labour and Social Policy of Ukraine on licensing mediation in employment abroad and granting foreigners permits for employment in Ukraine considers submitted applications for licence issuance and makes relevant decisions; reviews inspection materials of licensees, applications and complaints of citizens; informs law enforcement agencies about violations in the field of mediation in employment abroad. Commission decisions are made collectively. The Commission includes representatives of the Ministry of Labour and Social Policy of Ukraine, the State Employment Center, the Security Service of Ukraine, the Ministry of Internal Affairs of Ukraine, the Federation of Trade Unions of Ukraine, the Federation of Employers of Ukraine, and the supervisory board of the Ukrainian Association of Private Shipowners.
During 2005, the Ministry of Labour conducted 198 inspections of compliance by business entities with the licensing conditions for carrying out economic activity in mediation in employment abroad, cancelled 39 licences, and issued 114 orders on the need to eliminate violations.
As of 3 February 2006, 431 licensees are operating in Ukraine. Their number is half that of 2001, which is related to the introduction in 2001 of a new regulatory and legal framework regulating the activities of employment intermediaries abroad.
Also noteworthy is the steady trend towards an increase in the number of issued licences, a decrease in the number of cancelled licences, and an increase in the effectiveness of licensees' activities. Over 2000-2005, business entities engaged in mediation in the employment of Ukrainian citizens abroad placed more than 250,000 people, in particular:
in 2000 – 33,700 people;
in 2001 – 36,300 people;
in 2002 – 40,700 people;
in 2003 – 38,200 people;
in 2004 – 45,600 people;
in 2005 – 56,600 people
The number of labour migrants – Ukrainian citizens, on average placed through one intermediary structure, has tripled over the past five years (from 41 people in 2001 to 131 people in 2005 – Table No. 1).
The main areas of employment of Ukrainian citizens – labour migrants are: transport and communications, construction and industry, fishing and agriculture. The main countries of employment are Cyprus, the Czech Republic, Latvia, Greece, and Russia.
Two-thirds of the contracts concluded with foreign employers provided for work duration of up to one year, and one-third – up to six months.
More than 80% of workers were not employed anywhere at the time of leaving for work in another country (in 2001, such workers were 55.0%).
The activity of intermediary structures in the employment of citizens abroad has significant regional differentiation. The main volume of employment falls on Odesa Oblast (2/3 of the total volume in Ukraine), Donetsk Oblast (11%), the Autonomous Republic of Crimea (4%) and Kharkiv Oblast (3%), as well as the cities of Sevastopol (10%) and Kyiv (3% of the total volume in Ukraine).
Business entities holding a Ministry of Labour licence for mediation in employment abroad have concluded agreements and cooperate with foreign partners from 55 countries worldwide. The largest number of licensees have connections with employers and intermediaries in Cyprus, Latvia, Greece, Liberia, and Panama, engaging in the employment of specialists and workers on sea vessels. Many licensees have been working in the mediation field for a fairly long time and have positively proven themselves in this activity. In particular, these are the Nautilus Marine Agency (Mykolaiv), the Adriatico Brig Marine Agency (Odesa), the Danaos Ukraine company (Odesa), LLC Oasis Shipping International (Kyiv), private entrepreneur T.Ya. Basargina (Kerch), CJSC Ajax (Illichivsk), LLC Crystal Marina Ltd (Odesa), PE Adriatico-Mariupol (Mariupol), and others.
Such licensees as Private Entrepreneur Verbytska N.P. (Kyiv), Private Enterprise Agency "FEA" (Rivne), LLC "Ukrcontract LTD" (Rivne) actively cooperate with employers of the Czech Republic. The state enterprise "International Professional Resources – Ukraine" (Kyiv) employs mid-level medical staff in US medical institutions, and the Ukrainian-Libyan enterprise with foreign investments LLC "IBN SINA" (Kyiv), Private Firm "Vice-Admiral" (Ivano-Frankivsk) employ doctors and nurses in Libya. Private Enterprise "Siret-Exim" (Chernivtsi), LLC "Zakarpattransbud" (Chop, Zakarpattia region) carry out intermediary activities on employment of construction workers in the Russian Federation. Private Enterprise "Feawind" (Kyiv), Private Enterprise "Iris-Art-Express" (Kyiv) cooperate with employers from Japan. The Youth Labor Center (Kyiv) actively works in the sphere of intermediary employment of citizens abroad.
A complete list of business entities licensed by the Ministry of Labor for intermediary activities in employment abroad (indicating addresses, phones, names of company directors, license validity terms, countries of employment) will be provided in the next issues of the publication.
Tetiana PETROVA,
Head of the Employment Policy
and Labor Migration Department of the Ministry of Labor
and Social Policy of Ukraine.