ArcelorMittal Temirtau and local labor authorites locked in battle over wages cuts

In July ArcelorMittal Temirtau announced plans to cut wages of its employees by 25% starting from August due to critical market conditions. The company informed the government of Kazakhstan, trade unions and workers about the decision to decrease the wages. Top managers of ArcelorMittal Temirtau met with local authorities to explain the forced measures. 

However, the State Labor Inspector of Kazakhstan issued a warrant instructing the company to withdraw the order #495 dated August 4, 2015 that provisioned for the decrease of the wages by 25%. The order was rendered ineffective by the Labor Inspection based on the country's Labor Code. 

The Labor Code recognizes acts of employers that degrade employee’s conditions with or without the employee’s consent ineffective. That means, ArcelorMittal Temirtau has to send the labor inspector an official letter confirming that the company followed the instructions and canceled the order before noon of August 13. 

ArcelorMittal Temirtau however is going to file a protest against the warrant. The company explained that the decrease of wages was crucial for it. 

"ArcelorMittal Temirtay JSC hereby declares that it does not agree with the warrant issued by the state labor inspector and having consulted the legal department it decided to file a protest. At the same time, ArcelorMIttal Temirtau continues negotiations with heads of trade unions of steel and coal departments of the company to reach an agreement on this issue. We think that decrease of wages is preferable to mass dismissal of employees," the press office of the company said.

ArcelorMittal Temirtau, a steel giant in Kazakhstan, is part of ArcelorMittal that is among world leaders in production of steel and occupies a leading position on the main steel markets around the world, including the industries like car-making, construction, household appliances and packaging. The company also has large reserves of raw materials and an efficient distribution system. The company employs more than 200,000 people and has operations in 60 countries.

By Gyuzel Kamalova, editing by Tatyana Kuzmina