LABOUR PROTECTED

It is a popular belief that a person spends a third of their life asleep, and another third at work. But while you can be sure of a good night's sleep by lying in a comfortable bed or shutting out extraneous noise, for example, you can hardly do that at work. That is why, since time immemorial, mankind has tried to create the best possible conditions for work; the result is that today we have comfortable cars, high-speed lifts, state-of-the-art computers and so on. You cannot stop progress and man is by no means always the winner in this game. For example, few of us are insured against accidents at work, such as a reinforced concrete pile falling on our heads or a snapped cable. But we can be!

"Have you had an accident on a building site?"

The first thing to be said is that the problem of accidents at work is widespread, even in the most developed countries. Take the construction industry. Even if employers observe safety regulations at work, such as hard hats and safety nets, the possibility of severe injuries or fatalities happening during housing construction, especially on high-rise buildings, cannot be ruled out. The slightest lack of attention by a worker or - if a job is being carried out in the open - a sharp change in the weather (a strong gust of wind, a lightning strike etc) could be the reason. As we can see, no-one is proof against accidents at work. And here is a shocking statistic. Maharram Maharov, deputy head of the State Labour Inspectorate of the Azerbaijani Ministry of Labour and Social Protection, says that according to the International Labour Organization (ILO), 2.3 million people are killed at work every year in the world, and the number of people injured is 2-3 times that figure.

As far as Azerbaijan is concerned, according to the Ministry of Labour and Social Protection, there were 196 accidents at work in the country between January and October 2010, leading to the deaths of 55 people, 25 of whom were working in the construction industry, and another 165 were injured (37 of them construction workers). There were 51 accidents in the construction industry alone. In other words, one in four accidents occurred in the construction industry.

In 2009 there were 250 accidents at work in Azerbaijan, 65 of them in the construction sphere. Some 69 fatal accidents were recorded, two of those killed being foreign citizens, and 218 people received industrial injuries of varying degrees of severity. In the same period, 32 people were killed while carrying out building work and 48 sustained injuries. That year there were also 25 accidents at work involving work teams, including ten on building sites. In 34 cases the enterprise was at fault, in 109 cases the victims were themselves to blame, in 74 the enterprise and the victims were equally at fault and 13 accidents occurred as a result of external factors. In the construction sector, 13 cases were the fault of the enterprise, in 23 the victims were at fault, in 17 both enterprises and victims were to blame and 12 accidents were down to external factors.

It is clear that although the number of work-related accidents is in decline from year to year, there is still no solution to the problem.

Nabi Shukurlu, the head of the labour inspectorate at the Azerbaijani Ministry of Labour and Social Protection, says that most accidents occur because of a failure to observe safety regulations and because workers do not possess the necessary tools or apparatus to ensure their technical safety (such as safety belts, nets and so on). Potentially dangerous areas (elevator shafts, high balconies without rails) are another reason.

Following Europe

These are not just bare figures. Behind each of these accidents, be it serious injury or death, lies a person's fate, and that of his family, his closest relations and his friends. And even if you ignore the moral side of this issue, there is still the problem of indemnity and guarantees giving an employee confidence that in the event of unforeseen circumstances he and/or his loved ones will receive some kind of compensation, including payment for the cost of treatment and rehabilitation, which could take a long time. It may also happen that a person is unable to continue in his job because of his injuries, and for such people the second component of the law "On compulsory insurance against accidents at work and loss of earning capacity through occupational illness" is particularly relevant. In short, this legal framework in Azerbaijan complies with the ILO C121 "Employment Injury Benefits Convention", which was adopted in Geneva on 8 July 1964. In other words, Azerbaijan is close to following accepted international rules in this regard.

Another aspect of some importance, which could be regarded as a huge plus, is that employers are to publicize extensively the need to observe safety regulations at the workplace, and this means a flexible work schedule, the rational distribution of labour and suspending operations when an employee is in possible danger; for example, if the air temperature is above 40 degrees or it is abnormally hot, discouraging people from coming to work if their health does not comply with labour regulations or, if they are already at work, but on a particular day (two days, a week etc) are unable to do their job because they are unwell or have a serious illness, and so on. And since we have mentioned the construction industry, which carries the greatest danger of injury, the changes in the law are very timely in this context.

If we take a broader view of this aspect then we may conclude that the new law on social insurance could radically alter the existing situation for the better. It will bring with it not only a healthy employee-employer atmosphere at the workplace (it is no accident that we put the word "employee" first) but will also create normal working conditions. This will lead to an even greater incentive to work and to improve professionalism. Sooner or later this will have a positive effect on business performance and the development of the country's private sector as a whole.

But as sometimes happens, including in Azerbaijan, having a law in no way means that all employers will adopt it straightaway. A situation may develop whereby the vast army of workers whose jobs in one way or another carry a risk to their health or life, can realistically count on insurance benefit.

In the opinion of Hadi Racabli, the head of the parliamentary committee for social policy, "the introduction in Azerbaijan of compulsory insurance against loss of earning capacity through occupational illness and accidents at the workplace is the most important law in the transitional period of the country's economy".

"During the period of active development in the country's economy and the private sector and the liberalization of the economy, employers began hiring a large number of employees but failed to create effective working conditions. This led to frequent accidents at work, but employers did not pay compensation for damages. Until now there has been no legal basis on which to punish or enhance the responsibility of these employers. This law is the very best social protection," said the MP.

This is compulsory!

Namig Khalilov, the head of the State Insurance Supervision Service of the Azerbaijani Finance Ministry, said "the adoption of the law 'On compulsory insurance against accidents at work and loss of earning capacity through occupational illness' is of great importance for social development and well-being". He believes that the law will also facilitate a reduction in the number of lawsuits linked to accidents in the work place. According to the law, all employers are obliged to insure their employees.

For his part, Maharram Maharov, the deputy head of the State Labour Inspectorate of the Ministry of Labour and Social Protection, noted that the Azerbaijani Labour Code of 1999 contains a clause making it incumbent upon employers to insure their employees, but until now there has not been a separate law regulating this process. "I believe that today the adoption of this law will help to eliminate industrial injuries and their causes and will provide all workers with the appropriate insurance," he said, adding that, according to the State Statistical Office, there are currently 400,000 employers in Azerbaijan. 

The Labour Ministry has also asked the Ministry of Health and the law-enforcement agencies to supply information about accidents at workplaces. This is necessary in order to obtain authentic information and to organize preventive measures.

And offenders will be dealt with severely. According to Maharov, employers who ignore the requirements of the law, especially those who have not signed insurance contracts, will be fined from 1,500 - 3,000 manats. Speaking about possible deferments in signing insurance contracts, he noted that "the law has come into force and all employers must abide by its instructions".

It is impossible to monitor compliance with the law by all employees in the initial stage, and that is why some may be granted a deferment of 1-2 months. During this period the ministry will carry out publicity and explanatory work and employers who deviate from the requirements of the law will be penalized. "It is not the aim of the SLI to impose fines, because we are not dependent on such methods. Our aim is to ensure normal working conditions for employees," Maharov said.

Everything for insurance

And now, about another important aspect - the development of the country's insurance market. The Association of Insurance Companies of Azerbaijan (ASA) assesses the market's potential at one billion dollars. According to Azer Aliyev, head of the association, this is quite possible if all the existing potential is utilized. 

That said, ASA plans to increase the size of the country's insurance market to 400m dollars over the next two years. To achieve this target the association plans to implement tasks set in a previously adopted Strategy of the ASA for a period of two years. The main tasks are - working to raise the standard of education in insurance companies and publicizing insurance in the country.

How is it planned to bring the market to a new, revolutionary stage of development? The professional players in Azerbaijan's insurance market are convinced that compulsory insurance, compulsory medical insurance (CMI) and life insurance are still not fully utilized in our country. Some progress has been achieved in the first sector. Ziyad Samedzade, head of the parliamentary committee for economic policy, said that the time has come to create a law "On compulsory insurance" to meet current requirements and help to shape normal financial relations in society. The draft law will be discussed during the spring session of the Milli Majlis. The changes would mean a considerable increase in the limits of cover on insurance policies and an increase in insurance contributions that would help to increase the size of the compulsory insurance market.

The adoption of the law "On compulsory insurance against accidents at work and loss of earning capacity through occupational illness" will also play a big part in this process. Namig Khalilov believes that it is too early to make any forecasts about increasing the level of insurance companies' fees because the market can only be assessed when the law has been in force for some time. Rough estimates indicate that this type of insurance will help to bring in 30-40m manats annually from the insurance companies.

In short, insurance company premiums amounted to 160m manats (about 200m US dollars) in 2009 and 155,590,000 manats (194m US dollars) in 2010. Enough said.

Khalilov also pointed out that employers are free to choose their own insurance companies, although the choice today is not very great. There are only two insurance companies dealing in life insurance in Azerbaijan - Ateshgah Hayat and Gala Hayat. The emergence of this type of insurance, Khalilov claims, "will increase the number of companies dealing in life insurance" because contracts for the new compulsory type of insurance are open-ended. Thus, Pasha Sigorta intends to obtain the appropriate licence shortly and the Standard Insurance and AtaSigorta insurance companies are expecting life insurance licences, which bears out the expert's claim.

Incidentally, 10 million manats were allocated to public sector organizations from the Azerbaijani state budget for 2011 for the purpose of introducing compulsory insurance against accidents at work and loss of earning capacity through occupational illness. Let us hope that as a whole the introduction of this type of compulsory insurance will only be speeded up.