Factors Contributing And Deterring Entrants To Russian Market: Legal, Regulatory And Immigration Essay.

Perform environmental scanning on the below. Understanding the factors that may contribute to or deter from entering the Russian market.  

Areas to be covered in report:

1. Legal/ Regulatory Environment for Russia
2. Employment regulations: hiring/firing, benefits, time off
3. Industrial / Union relations
4. Immigration policies

Legal/Regulatory Environment for Russia

A larger country like Russia has various market segments spread across eleven time zones. Such market segments are affected to a great extent by the legal and regulatory provisions applicable in Russia. Weak protection of intellectual property, burdensome regulations, strength and preponderance of state-owned enterprises and focus of government on localization poses serious challenges to U.S. exporters in entering Russian market (Export.gov, 2017).

The appropriate scanning of the environment by taking into consideration the legal and regulatory aspects of Russia assists in understanding the factors that are responsible for contributing to or deteriorating from entering the Russian market.

The legal and regulatory environment of Russia plays a strong role in ascertaining the number of new market entrants from outside the country. Various regulations with regard to employment, industrial relations and immigration are as follows:

The hiring of the employees in Russia is governed by fixed term employment contracts. The hiring process includes background checks, medical examinations and obtaining approvals and permits for foreign nationals. At the time of hiring, no discrimination is made on the basis of race, gender, nationality, etc. the employment contract requires the employees to provide all the relevant documents to the employer.

The most common reason behind the firing of employees in Russia is redundancy. In such a case, certain rights are provided to the employees such as the right to two month paid notice and a severance package which may extend from one to three months. The employees are also fired due to lack of ability for meeting the expected levels of performance as stipulated in the Labor Code. However, there is a provision for the mothers whose children are younger than 3 years of age and pregnant women that they cannot be dismissed.

The employment regulations of Russia provide various benefits to the employees with respect to the protection of the workers (Maggs, Schwartz & Burnham, 2015). The Labor Code of Russia also provides the employees with the freedom to choose the place of work. The retention of employees in an organization is allowed by law for a fixed period agreed in advance.  The time frame for such the existence of such an obligation is not provided by the law.

The benefits also include the provision of equal opportunities to all the people. This is done with the help of prohibiting discrimination on the basis of race, gender, nationality, descent, language, family status, property, place of residence, age, union affiliation, views and various other circumstances. Certain social groups are provided extended protection in the form of mandatory provisions that affect the employment of students, women, minor, disabled persons, single parents, war veterans, retired people.

Employment Regulations: hiring/firing, benefits, time off

The working hours of the employees are restricted up to 40 hours per week (Confederation Fiscale Europeenne, 2018). Following special benefits are granted to certain employees:

Employees under 16 years of age-maximum 24 hours per week

Disabled employees and employees between the age of 16 and 18-maximum 35 hours per week

Medical personnel- maximum 39 hours per week-39 hours per week

Teachers and employees in hazardous conditions-36 hours

Rest periods are provided to the employees in the form of minimum guaranteed break in a working day of 30 minutes, weekends, rest periods between shifts, annual leave, and public holidays. It is also made sure by applying strict prohibition on the working of employees during rest periods and especially on public holidays and weekends.  There is no prohibition on overtime work but it demands the consent of the employee and additional payment (Maximenko & Klutchareva, 2018).  

The employees are entitled to paid time offs such as sick leaves in cases where employees suffer from injury or illness. It is also allowed when an employee needs to take care of a sick relative or sick child. The employees are also entitled to maternity and paternity rights, adoption and parental rights and are granted leaves accordingly.

Industrial relations can be defined as the relations between the workers and management in the industry (Barett, 2018). In Russia, the employees are granted constitutional and statutory right to join or form trade unions (Domsch, 2017). They are also provided the statutory right to collective bargaining and the conclusion of collective bargaining. The representatives of the employees such as employee representative body or primary trade union organizations are provided with the entitlement to obtain the required information from the employer (Silverman, Vogt & Yanowitch, 2016).

 When decisions are required to be made with regard to redundancies, minimum written notice period of its plans must be provided by the employer to the primary trade union organization that represents its employees and public employment services. In cases, where changes are made in the legal form or type of ownership in the organization then such an information must be provided by the employer at least three months in advance to the trade union organizations that represents its employees. Employees are also granted constitutional and statutory right to strike. Labor Code provides the right to workers to participate in the management of the enterprise either directly or through representatives.  

Industrial/ Union Relations

The Labor Code and the Collective Agreements and Accords Act, 1992 establishes the legislative framework in Russian Federation for collective bargaining. The socio-economic relations between the workers and the employer are regulated by collective agreement as defined by Article 40 of the Labor Code. Both the representatives of the workers and employers are permitted to initiate collective bargaining.  The other party must enter into negotiations within seven days of receipt of a written proposal for the purpose of starting collective bargaining.

For individual disputes, the labor law of the Russian Federation provides various procedural distinctions which depend upon the nature of dispute i.e. dispute of rights or interest dispute. The collective labor dispute is considered by conciliation commission, labor arbitration by the parties themselves with mediator participation.

Russian Federation considers the right to strike as a constitutional right. However, the decision regarding the participation or refusal to participate in a strike is voluntary and cannot be forced upon by others. The strike may be recognized as illegal in cases where minimum essential services as defined by the respective federal state bodies are failed to be ensured. The strikes are also considered as illegal during state of emergency or war, in security service, law enforcement agencies, armed forces, etc. the decision regarding the declaration of strike to be unlawful is taken by the court of law.

According to the data of Organization for Economic Co-operation and Development (OECD) for the year 2013, Russia took in greater immigrants than all the other country except United States (Akaha & Vassilieva, 2014). For several years, no strategy was devised for the purpose of regulating immigration. In the year 2002, two laws were passed, one on citizenship and other on legal status of foreign citizens in the Russian Federation. These still serve as the legal basis for the purpose of regulating immigration in Russia. The main objective of Russian migration policy is to derive maximum economic benefit from legal immigration (Lebedeva, Tatarko & Berry, 2016). The Concept of Migration Policy of the Russian Federation to 2025 recognizes that the potential of Russia in attracting the students from foreign countries is still unexploited to a great extent. The Concept provides that Russian migration policy is planked through the creation of conditions under which the investors and entrepreneurs will migrate to Russia. For the purpose of creating more attractive environment for the foreign students, changes were made in the Russian law for allowing students attending classes in person to work throughout the duration of their studies (Pismennaya, Karabulatova,  Ryazantsev, Luk’yanets & Manshin, 2015).

Immigration Policies

A restrictive policy is adopted for dealing with the immigrants from CIS (Commonwealth of Independent States) along with the introduction of additional legal barriers such as registration, quotas, compulsory medical examination, etc.

The holders of a work permit or a patent for the purpose of carrying out work for companies or people to citizens from visa-free countries are entitled to immigration for temporary work. People belonging to countries within the Customs Union (Belarus and Kazakhstan) are allowed to work in Russia without obtaining any kind of permit.

The economic factors are held responsible for illegal immigration in Russia. The battle against illegal economic immigration in Russia comprises of detection of cases where foreigners are found to be residing and working in Russia in an illegal manner along with exposing corrupt employers (IFRI, 2016).

The issuance of patents to the immigrants authorized them to work for private citizens. This patent system granted freedom to the migrant laborers from their employers.  The holder of patent is not required by law to prove that he is working as there was a requirement to receive work permit. Patents are also not included for the admission of foreign workers in the annual quota.       

Through the process of immigration, the foreign citizens get entry in the territory of Russian Federation (Burrell, 2016). The current law provides that after the completion of five years of residence in Russia and after the proper examination of the immigrant regarding the knowledge of Russian language, the immigrant become eligible for obtaining Russian citizenship.

Conclusion

The environmental scanning conducted in the report regarding the legal and regulatory environment of Russia provides some positive and negative factors that contribute towards or deteriorate from entering into Russian market. The employment regulations in Russia are favorable and are not extraordinary thereby contributing towards the entering the Russian market. Industrial relations in Russia are also favorable with the provision of procedures for resolving individual and collective labor disputes. The immigration policies of Russia are recorded to be favorable than the other countries as it aims at deriving maximum economic benefit from it. Therefore, Russia has a favorable market as specified by the policies and regulations related to employment, industrial relations and trade unions.

References

Akaha, T. & Vassilieva, A. (2014). Russia and East Asia: Informal and Gradual Integration. Routledge.

Barett, V. B. (2018). What Are the Functions of Industrial Relations? Retrieved February 14, 2018 from https://smallbusiness.chron.com/functions-industrial-relations-71868.html

Burrell, K. (Ed.). (2016). Polish Migration to the UK in the 'new' European Union: After 2004. Routledge.

Confederation Fiscale Europeenne. (2018). Labor Law in Russia. Retrieved February 14, 2018 from https://www.cfe-eutax.org/taxation/labor-law/russia

Domsch, M. E. (2017). Human Resource Management in Russia. Routledge.

Export.gov. (2017). Russia - Market Challenges. Retrieved February 13, 2018 from https://www.export.gov/article?id=Russia-Market-Challenges

IFRI. (2016). Russia’s Immigration Policy: New Challenges and Tools. Retrieved February 13, 2018 from https://www.ifri.org/sites/default/files/atoms/files/ifri_rnv_91_lioubov_bisson_eng_january_2016_protege.pdf 

Lebedeva, N., Tatarko, A., & Berry, J. W. (2016). Intercultural relations among migrants from Caucasus and Russians in Moscow. International Journal of Intercultural Relations, 52, 27-38.

Maggs, P. B., Schwartz, O., & Burnham, W. (2015). Law and legal system of the Russian Federation. Juris Publishing, Inc..

Maximenko, A. & Klutchareva. E. (2018). Employment and employee benefits in the Russian Federation: overview. Retrieved February 14, 2018 from https://uk.practicallaw.thomsonreuters.com/5-503-4083?transitionType=Default&contextData=(sc.Default)&firstPage=true&bhcp=1 

Pismennaya, E. E., Karabulatova, I. S., Ryazantsev, S. V., Luk’yanets, A. S., & Manshin, R. V. (2015). Impact of Climate Change on Migration from Vietnam to Russia as a factor of Transformation of Geopolitical Relations. Mediterranean Journal of Social Sciences, 6(3 S2), 202.

Silverman, B., Vogt, R. & Yanowitch, M. (2016). Double Shift: Transforming Work in Postsocialist and Postindustrial Societies: Transforming Work in Postsocialist and Postindustrial Societies. Routledge.