New in Settlement of Labour Disputes: Conciliation Commission
Most employers and employees inevitably face the problem of labor disputes, be it individual or collective ones. However, not many are aware of methods for settling labor disputes.
With adoption of the new Labour Code, the procedure for settlement of labor disputes has changed considerably, thus, consideration of discord between employee and employer by conciliation commission has become a mandatory step.
In this regard, we decided to consider in depth urgent issues of creation and operation of conciliation commission.
What does the Conciliation Commission imply?
The Labour Code provides that the conciliation commission is a permanent body created in an organization, its branches and representative offices. The commission is created on a parity basis with an equal number of employer’s and employees’ representatives.
Regarding this regulation, some important points are noteworthy.
Firstly, as opposed to the previous Labour Code, according to Article 159, paragraph 1 of the present Labour Code, it is mandatory that individual labour disputes are considered by the conciliation commissions, except the disputes concerning small businesses and chief executive officers of any legal entity. Only the disputes concerning outstanding issues or non-enforcement of the decision of the commission may be considered by the courts.
This condition correlates with Article 8, paragraph 6 of the Civil Procedural Code of the Republic of Kazakhstan, according to which, if the pre-trial procedure for settling a dispute for a certain category of cases is either established by law or provided by contract, legal action may be carried out only after complying with such procedure.
Secondly, the commission shall consider all kinds of individual labour disputes, except disputes involving the chief executive officers of any legal entity and the employees of small businesses.
An analysis of Chapter 15 of the Labour Code implies a general conclusion that the subjects of medium and large businesses, as well as their branches and representative offices must necessarily create a conciliation commission.
Procedure for Creation of the Conciliation Commission
The present Labour Code does not expressly provide a procedure for the creation of a conciliation commission.
The Labour Code merely provides that the representatives of the employer and employees in a written agreement or collective agreement in relation to the conciliation commission must determine the following:
- quantitative composition;
- term of powers;
- rules of procedure;
- procedure for decision-making, and
- issues of involvement of intermediaries in the conciliation commission.
In practice, issues arise precisely in relation to the sequence of the actions by the parties for the creation of the commission, namely: the duration from the date when the Labour Code came into force within which the commission should be established, in cases when labour disputes had not yet occurred; who should initiate the commission’s creation; which acts should be issued by the employer; which documents should confirm the powers of the employees’ representatives, etc.
Operation of the Conciliation Commission
The actual operation and procedure of the conciliation commission is determined by the regulations imposed on the commission (as a part of the collective agreement) or by an agreement entered into between the employer’s and employees’ representatives regarding the establishment and operation of the commission.
The Labour Code establishes the procedure for the consideration of applications filed with the commission by the concerned party.
In order to initiate the consideration of a labour dispute, a party under the employment contract must submit an application, which must be registered by the commission. The dispute must be considered within 15 working days in the presence of the applicant or his/her authorised representative. Failure to settle the dispute within the established period shall amount to be a determining factor for the initiation of legal action.
After the dispute has been considered, within three days the commission shall issue a copy of the decision to both the parties. The decision of the commission shall be executed within a period established thereby, except for the disputes concerning the reinstatement of the employee, because such a decision is subject to immediate execution.
On the reinstatement of the employee, the employer must pay to the employee the average salary for the period of the employee’s temporary suspension or the wage gap for the period of the transfer of the employee to a lower paid position, but not exceeding 6 months. Such compensation is also paid to the employee by the employer in case of a delay in the execution of the decision of the employee’s reinstatement.
Terms of Application to the Conciliation Commission
The Labour Code establishes that the parties may apply to the commission within one year from the date when the party became aware or should have become aware of the violation of its rights.
However, disputes concerning reinstatement are exceptional cases. If an employee believes that his/her dismissal is illegal, he/she may apply to the commission within 1 (one) month from the date of delivery of the copy of the employer’s act of termination of the employment contract. If the matter is settled by the commission or the employer refuses to enforce the commission’s decision, the employee may apply to the court within two (2) months from the date of delivery of the copy of the commission’s decision.
Who should initiate the creation of the conciliation commission?
In practice, employers do not facilitate the creation of the conciliation commission in the absence of potential labour disputes.
Thus, only in the event of dispute arousal, the employer initiates the creation of the commission. The employer drafts the agreement and coordinates regarding it with the employees’ representatives, appoints his/her representatives and invites the employees to select their own representatives to participate as members of the commission.
In essence, any of the parties to the employment contract may prepare a draft agreement on the establishment of the commission or an amendment in the collective agreement (if the organisation has concluded one), and send for approval and signature to the other party.
Can a party to a labour dispute go to court, in absence of the conciliation commission?
As mentioned earlier, the employees of small businesses and chief executive officers of any legal entity can apply directly to the court.
However, subjects of medium and large businesses after receiving the employee’s application must necessarily create a conciliation commission.
Thus, Article 160, paragraph 2 of the Labour Code stipulates that during the period of application for consideration of individual labour disputes, the disputes shall be suspended in the absence of the conciliation commission prior to its creation.
Is it necessary to conduct a general staff meeting for the appointment of the representatives to the conciliation commission?
According to the Labour Code, employees’ representatives are bodies of trade unions and their associations. In their absence thereof, the elected representatives are those who are elected and authorised in the general meeting (conference) of the employees by a majority of the votes, subject to the presence of not less than two-thirds of the employees (conference delegates).
Consequently, for signing of the agreement for the creation of the conciliation commission and to participate in its work, employees’ representatives must be elected at the general meeting of the employees. At the same time, the Labour Code does not regulate the procedure for holding the general meeting for the election of the employees’ representatives in the commission.
In this connection, each organisation shall resolve the issue individually, based on the number of its employees, its organisational structure, presence of collective agreement or internal corporate policies.
Who should conduct the training of the members of the conciliation commission?
According to Article 159, paragraph 8 of the Labour Code, the parties in the commission are required to conduct an annual training of the members of the commission in areas such as providing knowledge pertaining to the basics of the labour legislation of the RK, development of negotiation skills and achieving consensus in labour disputes.
This regulation does not provide a clear division of responsibilities; however, the employer and employees’ representatives may establish the order of the training of the members of the conciliation committee in a written or collective agreement.
In order to protect their legitimate rights and interests, the employers and employees must adopt a responsible approach to the issue of the creation and operation of the conciliation commission.
Awareness regarding the procedure for settlement of individual labour disputes, training of the members of the conciliation commission in the basics of labour law could constitute the basis for the settlement of many disputes without resorting to legal action.
Information contained in this Client Update is of general nature and cannot be used as legal advice or recommendation. Please note that Kazakhstan is an emerging economy, and its legislation and legal system are in constant development. Should you have any questions or want to discuss matters addressed in this Client Update, please contact us.
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