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THE NEW RUSSIAN WORKINGMEN'S COMPENSATION ACT.(^)
BY I. M. RUBINOW.
The new Russian workingmen's compensation act, promulgated on June 2 (15), 1903, and effective since January 1 (1+), 1904, is acknowledged by the Russian press to be the most important act of labor legislation since 1897, when a normal working day was established. Prior to this the workingman's right to compensation in case of accidents was based upon the civil law and necessitated litigation and proof of the employer's negligence. The laborer had neither the means nor the proper intelligence for such litigation, and a settlement for a ridiculously small sum was the usual way even in case of the severest injuries. There was special legislation to provide for compensation of miners.
The new law embraces in its provision the wageworkers of all the large manufacturing, metallurgical, and mining establishments; all employees, whether actual workers or supervisors and foremen, are included, provided their salary does not exceed 1,500 rubles ($772.50) a year. The proprietor of the establishment must compensate his employees for any disability resulting from accidents (occurring while at work) which has lasted more than three days, unless purpose or gross negligence on the part of the person injured can be proved. Subletting the work to contractors does not relieve the proprietor of the establishment from the responsibility. Agreements between the employer and employee, waiving the right to a compensation under this act, are not legal and do not deprive the employee of his rights.
The act distinguishes between two kinds of relief-a compensation and a pension. The first is given for temporary and the latter for permanent disability. The temporary compensation is calculated on a basis of 50 per cent of the actual earnings for the time of disability; a pension equal to two-thirds of the average annual earnings is granted in case of total and permanent disability. Where the disability, though permanent, is not total-i. e., does not completely destroy, but only diminishes, the earning capacity of the workingman-only a proportionate share of the two-thirds of the average earnings must be
a The Government has recently had under consideration to replace this law a system of State insurance of workingmen against accidents, to form part of a general system of insurance against sickness, accidents, old age and invalidity, and death not caused by accidents.
paid. The compensation is to be paid from the day of the injury till the day of either a complete cure or of cessation of medical treatment, when the injury may be declared a permanent one. From that day the pension dates. If the pension is larger than the compensation, the difference for the time elapsed is to be paid to the person injured in a lump sum.
If the person injured is a child (12 to 15 years of age) or a youth (15 to 17 years), the amount of payment is calculated on the basis of actual earnings; but with the growth of a child into a youth or the youth into an adult the rate of compensation or pension is increased correspondingly with the rise of wages of unskilled labor for the various age periods. In addition to all payments the employer must compensate the workingman for actual expenses of medical attendance till the cure or cessation of treatment, unless the workingman has been receiving this medical aid from the employer, i. e., in the factory hospital.
In case of fatal accidents (whether death results immediately or within two years after the accident, as long as it is shown to have been caused by the accident) a special allowance of 30 rubles ($15.45) for an adult, or 15 rubles ($7.73) for a minor, is made by the employer for funeral expenses, and a pension is to be paid to the widow or heirs of the deceased wageworker according to the following scale: The widow, as long as she remains single, is entitled to one-third of the annual earnings of the deceased husband; children, whether legitimate, legitimatized, illegitimate, or adopted, shall receive one-sixth each of the earnings of the deceased parent, in case the other parent remains alive, or one-fourth each if they are left with neither father nor mother, up to 15 years of age; where parents or grandparents were dependent upon the earnings of the person fatally injured, they are each entitled to one-sixth of the annual earnings; the same provision is made for youthful brothers and sisters, who have neither father nor mother, until they reach the age of 15; provided, however, that the total amount of pension must not exceed two-thirds of the annual earnings. If the total of the pensions exceeds two-thirds of the annual salary of the deceased, the wife and children are entitled to receive the total indemnity provided for them in the law. If anything remains after the wife and children receive their proportions, it is divided equally among the other beneficiaries. If the maximum fixed is exceeded by the total of the pensions coming to the wife and children, these pensions are reduced proportionately. Where both parents lose their lives as a result of accidents, there is nothing to interfere with the children receiving a double pension. If the widow marries again, she forfeits her rights to the pension, but is entitled to the payment of a sum three times as large as her annual pension as a final settlement.
As the amount of the compensation or pension depends upon the earnings of the injured workingman, the method of determination of these earnings is of utmost importance to the efficacy of the law. The following method is prescribed by the act: The actual earnings of the person injured, as determined by the books of the concern, for the year preceding the day of accident are divided by the number of days of actual employment, and the quotient is multiplied by 260 (the average number of working days in a Russian factory) for establishments which are in operation the entire year. In establishments operated normally only through a part of the year, the computation of the annual earnings is made by allowing the average daily earnings for the possible number of working days during the period of operation, and for the difference between 260 and that number the average daily wages for unskilled labor in that locality. Where payment in kind (food and lodgings) constitutes a part of wages, 20 per cent of the money wages is added for lodgings in addition to the actual cost of the food supplied. Where the labor contract does not include any money wages (minors, apprentices, etc.), the calculation is made on the basis of the average local wages for unskilled labor, which are determined every 3 years by the local factory inspectors, for the various age periods, namely, children (12 to 15 years), youths (15 to 17 years), and adults (over 17 years).
By a very important provision the yearly payments of pension may be replaced by a single payment of a sum equal to ten times the amount of pension, if both sides agree.
The following method of determining the degree of injury and amount of compensation or pension due is outlined in the law: The police and factory inspectors must be notified of every accident without delay. Record is taken of every accident by the police, and evidence furnished by the employer or his representative and the injured person, if he be alive. A medical opinion is required as to the extent of the injury and disability. The physician must primarily testify as to the accident within the first four days after its occurrence. The termination of disability, the establishment of permanency of the disability, its degree, the termination of medical treatment, the dependence of a subsequent death upon the injury-all these facts must be set forth in the medical certificate. Either party has the right to the services of the police or municipal physician. In cases of failure to supply the necessary information or to keep required records of the accidents, the employer is fined 25 to 100 rubles ($12.88 to $51.50) for each offense.
Each agreement as to the amount of compensation or pension is drawn up in form of a contract and approved by the factory inspector, who has the right to withhold his approval if he finds it does not conform to this act. It is also the duty of the factory inspector to give the necessary explanations as to the provisions of the act, and enlighten the
injured workingman or his relatives as to their rights in the matter. Evidence must be furnished to the factory inspector by either side, if demanded, for the elucidation of their rights. If, however, the two sides do not come to an agreement, the factory inspector draws up the “protocol” containing the facts relating to the accident, and his conclusion as to the amount of lawfully due compensation, and the injured person may proceed to collect damages by suit according to existing legislation. Such appeals to the courts are discouraged, however, by the provision of the new law, denying the right to collect costs (1) if the case is carried to the court without presenting it to the factory inspector, or before the final protocol has been issued by the inspector, and (2) if the compensation granted by the court does not exceed the amount offered by the defendant. Guardians must be appointed to represent the interests of minors. Any private agreement, if not certified to by the proper authorities, does not destroy the right to demand compensation according to the provisions of this act.
The compensation in cases of temporary disability must be paid at the same intervals as wages are paid. Pensions for permanent disability must be paid monthly. Every six months evidence must be furnished by the beneficiary of his being alive; in case of a widow also evidence of not having married again. For delay in payment of pensions, interest is added to the amount due at the rate of 1 per cent per month. A new medical examination may be demanded every three years by either of the parties to the contract to determine if any changes have taken place in the degree of permanent disability.
The individual employer or the corporation is responsible for all the payments under this act, but reinsurance in any of the authorized Russian insurance companies is permitted, and this reinsurance transfers the responsibility from the employer to the company, which latter must be sued in cases of disagreement.
The act further provides for cases of voluntary or forced liquidation of private enterprises. When a private enterprise intends to wind up its affairs, the payment of all the compensations and pensions must be guaranteed either by reinsurance, or payment of the amounts due into some Government banking establishment. In cases of bank- . ruptcy, the claims under this act constitute a preferred claim upon the assets.
Only the essential provisions of this act have been here indicated. The new law has been acknowleged by the Russian press to be vastly superior to previous legislation. At the same time many shortcomings of the law are pointed out. First, it applies to factory and mining workers only, i. e., does not include either agricultural wageworkers or employees in transportation or commerce. Moreover, the Russian law draws a distinction between workingmen in “factories" and in small industrial establishments (domestic, etc.), wbile neither term
is very accurately defined. As a result many industrial workers are also excluded from the protection of this law. The adjustment of claims is practically intrusted to factory inspectors or other official bodies, whose power may not always be wielded in favor of the workingmen, yet the desire to avoid litigation will force the workingman to accept any terms the proper authority recommends. The most serious objection is the insecurity of the payment, as the employer's financial standing may be uncertain and failures are frequent. The most important Russian organ, Russkya Wedomosti, therefore insists that the new law, though much better than the old law, is yet much inferior to a well-regulated system of State insurance.
The very first months of the action of the new law seem to indicate, however, that the compensation act will approach a system of insurance, though private. The manufacturers in Moscow, Lodz, and other industrial centers are reinsuring their workingmen in the authorized insurance companies in order to free themselves from the responsibility, others are organizing mutual insurance funds for the separate trades. In this manner trade liability is being substituted for individual liability.