By Belikova Ksenia,
Doctor of Sciences (in law),
Professor of the Department of Civil and Labour Law
Peoples Friendship University of Russia (www.rudn.ru,
http://web-local.rudn.ru/web-local/prep/rj/?id=2704)
Delivered at the Center for BRICS Studies of Development Institute,
Fudan University, Shanghai, China, on October 27, 2015
Dear Ladies and Gentlemen! Dear colleagues! I am very happy to be here, to attend one of the oldest educational institutions of China, a country neighbor of the Russian Federation, with which we share a common border. I am pleased to speak in such an esteemed audience. So I am pleased to share with you the results of my research.
As a response to some objective change of circumstances (for example, as a result of military action, economic and financial crises, etc.) some unifying ideas emerge and begin to develop in the world. Often industrialized, developing, and, especially, countries with economies in transition, unable to achieve its strategic goals in the struggle for access to markets and resources at the global level, resort to the combined efforts (quite often in the scale of some regions).
On the one hand, with the implementation of such unifying ideas method of coordination, preserving the political and the customs borders of the States parties and implemented through the system of international organizations is used (e.g. WTO).
On the other hand, the method of implementation of the numerous regional integration projects, which require the economic integration of the territories of the member States while preserving their political boundaries and eliminating or weakening their customs borders (e.g. EU, MERCOSUR).
When it comes to unification of States that do not have common borders, as a rule, the key idea of consolidation is a creation on a contractual basis of military alliances (e.g., “Rome-Berlin-Tokyo” Axis, the anti-Hitler Coalition), but there are also exceptions (for example, Cuba in the Council for Mutual Economic Assistance (CMEA)).
In this format, the creation of the BRICS initiated in 2006 by the Russian President, is one of the most significant geopolitical events of the beginning of the new century. The BRICS within a short time have become a significant factor in the world politics.
Its development reflects an objective trend of the world development towards a multi-polar system of international relations and increasing economic interdependence. In such a system non-institutional structures of global governance and network diplomacy are used increasingly.
BRICS, being, according to some researchers, a quasi- organization and being in the same row with such an international associations as: the Arctic Council, the Big Eight, etc., does not fruit international legal personality and is not a subject of international law. The lack of distinctive signs of international intergovernmental organizations such as lack of: founding document, of the Secretariat, headquarters, etc., however, does not prevent BRICS to hold its summits, where further directions of cooperation within the BRICS are defined.
In fact, since the creation – the BRIC as of informal international association – it was perceived as an alternative to the existing world order, the answer to the imbalance of world economics and politics of the beginning of the new century.
From this point of view, BRIC, and later on BRICS, objectively have to date, opportunities for cooperation in order to form common positions on both key aspects of the international financial system and policy.
Currently in Russia there are a number of studies of the BRICS from the point of view of economy, it is, for example,
1) the research of the Institute of economy of Russian Academy of Sciences: “The new direction of Russian foreign policy and foreign economic cooperation in the BRICS (Edited by S. P. Glinkina, et al. – Moscow, 2014. – 220 p.),
2) the study conducted within the framework of the Program of the Presidium of the Russian Academy of Sciences “Economics and sociology of science and education”: “Integrated modeling and forecasting of development of the BRICS countries in the context of the world dynamics” (Moscow, Publishing house “Nauka”, 2014. – 382 p.) and law, e.g.: “Legal aspects of the BRICS” (a collection of papers, Faculty of law, Higher School of Economy. – St. Petersburg, 2011. – 240 p.).
These studies have by now enriched by the results of my research:
1) «Unification of private law within the “civil law” and “common law” orders (the example of BRICS)» conducted in 2012-2013 within the grant project of the President of the Russian Federation (Final statement comprising the results of the work during 2012 and 2013 can be found at http://civil-law-rudn.ru/nauka/granti/grant-prezidenta ), which resulted in the publication of the manual “Salient features and prospects of the unification of private law within the BRICS countries” in 2 volumes (ed. by dr. habil., prof. Ksenia M. Belikova. – Moscow : Peoples’ Friendship University of Russia, 2015) and
2) «Legal regulation of labor relations with a foreign element within the BRICS countries» conducted in 2015 also within the grant project of the President of the Russian Federation (results of the work can be found at http://civil-law-rudn.ru/nauka/granti/grant-prezidenta-md-7392-2015-6 ).
I`ll tell you about their main results.
So, at the beginning of our first research we decided to focus on the functioning of the key, in our opinion, institutes of the private law, inherent in the trade turnover, which appear to us most relevant in the light of the regulation of trade and economic relations, developed by the Russian Federation.
They are: 1) a comprehensive coverage of collective forms of doing business (legal entities, contractual associations, transnational corporations) and 2) contractual obligations (in international trade, with consumers, etc.).
«Legal person» and «contract» are investigated in the light of maintenance of the competitive market environment with regard to the permitted market dominance, «economic concentrations» and freedom of business activity and methods of investing of the capital in the BRICS countries.
«Contract» is investigated with an emphasis on its conclusion, execution and termination within the BRICS countries; the possibility of creation of a uniform system of contract law is also under study.
3) Law of property and law of intellectual property (copyright & rights related to copyright, patent rights) is under study in the context of both competences of the subjects of IPRs & its protection and support and development of innovations.
4) We also touched upon the settlement of disputes (civil, commercial and arising from public legal relationships) by way of conciliation and other ADR procedures.
The present (2015) study focuses on the issues of legal regulation of labour relations with a foreign element within the BRICS countries. The point is that at the current stage of development of the world economy the impact of globalization leads to the increase of the flows of cross-border movement of labor, its inclusion in the turnover of goods and services, that causes in its turn the need for legal regulation of these relations in the format of involvement in the labor process of 4 categories of employees that can be employed in each of the BRICS countries: they are – the situation when 1) the employee is a citizen of the Russian Federation, when 2) the employee is a citizen of the host country (one of the BRICS countries), 3) the employee is a citizen of other countries (e.g., Japanese working in China or Brazil), 4) person with dual citizenship.
In this format our attention is concentrated on such issues as: problems of application of national, regional and international conflict-of-laws provisions in the sphere of labor relations within the BRICS countries; the question of the choice of law applicable to labor relations with the participation of employees from the BRICS countries; issues of labour dispute-settlement with participation of a foreign element within the BRICS countries, etc.
So, step by step.
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With regard to forms of doing business under the legislation of BRICS countries we investigated the prospects of unification of approaches of “common law” (India and South Africa), “civil law” (Russia & Brazil) and “mixed” (China) legal orders to the system of legal entities and contractual associations of entrepreneurs within the BRICS, including the problem of participation of state-owned enterprises in the trade turnover.
In the context of functioning of legal entities we reached the following conclusions:
1. It is established that the system of legal entities engaged in entrepreneurial activity according to the law of the countries under consideration consists of a limited number of legal entities having one-type – unified – character, and that regardless of the term “company” or “society” – the laws of the BRICS countries divide them according to the degree of responsibility of the participants to those with:
a) limited liability: a limited liability company (Russia), sociedade limitada (Brazil), limited liability company (LLC in China & India),
b) liability limited by shares – public and non-public joint-stock company; business partnership (Russia), sociedade anónima in the form of companhia aberta и companhia (Brazil), company limited by shares (Ltd. by shares in the PRC, India), public and private company (“Limited” or “Ltd.” and “Proprietary limited” or “(Pty) Ltd.” in South Africa respectively),
c) liability limited by guarantee: company limited by guarantee (Ltd. by guarantee in China and India).
Laws of all BRICS countries also require indicate a measure of responsibility of the participants in the name (title) of the company.
2. It is revealed that despite of the different terminology used, the authorized capital of the companies / societies with liability limited by shares (b) is formed by public subscription, whereas the capital of companies with limited liability (a) and with liability limited by guarantee (c) is formed by private subscription, when the capital is simply divided into shares.
According to the law of the countries under consideration the issue of shares must be registered (by Brazilian Commission for the securities market; by the Federal service of the Russian Federation for financial markets; by the Bureau for registration of joint stock companies of the state of India; by the China Securities Regulatory Commission under the State Council (of the PRC); by the Stock Exchange of Johannesburg, South Africa).
3. Determined that a two-element system of corporate governance of business entities (General meeting and Board of Directors) is common for all types of companies (a, b, c) in India and South Africa and for companies of type (a) and (b) in Russia, China and Brazil. For some of companies of type (b) – public, open, etc. – of Russia, China and Brazil a tree-element system of corporate governance (General meeting, Board of Directors and Supervisory Board) is typical.
It is noticed that the national peculiarities include established by the laws the BRICS countries required quorum at General meetings and number of votes requires for decision-making; likewise the composition, competence and responsibility of the Board of Directors, the composition of the Supervisory Board.
4. National peculiarities of legal regulation of business activities of companies (societies) are manifested in different conditions of formation of the authorized capital (as for terms, volumes and types of payment, including at the time of the registration), in the number of permitted by law participants.
5. It is revealed that at present “legal entity” as a civil law institution of the countries under study is subject to constant development and modernization from the point of view of its legislative regulation.
For example, in Russia during the civil legislation reform a new form of legal entity – business partnership – came to life; in China the legislators raise standards for the establishment of enterprises increasing the required amount of the authorized capital; in South Africa a new legislation adopted in 2008 due to the changes of socio-economic relations in the country and the need for more detailed regulation of relations with the participation of subjects capable of conducting business activity, etc.
As for public enterprises:
1. It is shown that depending on current tasks of the State legal status of public enterprises varies from legal entities of private law to legal persons of public law.
Usually the status of private enterprises is used by those engaged into commercial activity, and the status of public is used by those realizing certain state administrative powers. For example, in Brazil under the Constitution the first ones are those state enterprises that are engaged in economic and financial activities, and the second are those that provide public services – directly, on the basis of concession or an authorization).
2. It is revealed that in different countries public enterprises have different attitude towards property. In Brazil and South Africa all state enterprises when established are endowed with their own property and their capital is held by their founder. In Russia the State transfers property ownership only to non-profit organizations: state corporations, companies and funds whereas commercial unitary entities of the Russian Federation get state property in their economic management (Unitary enterprises) or operative management (State enterprises). In China as it was established the Government provides industrial enterprises of public ownership with the property that is in its economic management and gives these companies the right of independent disposal of working capital and commodities obtained from non-planned activities.
3. It`s established that there is a tendency (e.g., Brazil, Russia): to the reduction of the of state participation in the assets and equity of enterprises of the private sector (from the majority to the minority of such a participation); to the extension of concessions granted to the private sector in various fields of infrastructure, etc.
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As BRICS countries economies are characterized by high level of centralization of capital but low degree of its concentration it makes relevant for them to use strategies of vertical and horizontal integration (in order to: increase economic growth through the purchase of the missing links of the production chain; purchase deposits of natural resources in countries outside of the BRICS; commercialize natural resources within BRICS countries, etc.). For the purpose of such an integration transnational corporations (TNCs) are often used.
1. The study of the legal nature of TNCs in BRICS gave us the idea that concept of “TNC” is usually not enshrined in the laws being doctrinal. The analysis of existing doctrines and practice of use of these terms allows to define transnational corporation as an enterprise that represents a set of legal entities and non-personalized associations of different nationalities and achieves economic unity through centralized management of its activities.
2. The conducted study allowed us to conclude that ways of attracting TNCs to national economies and methods of legal regulation are harmonized in general terms within the BRICS and consist in,
– first, liberalization of legal provisions of commercial, contractual, tax, corporate – in part of regulation of activities of enterprises and other laws, and in,
– second, creation and use of subsidiaries, joint ventures, opening (establishment) of branches, representative offices, trading trusts, conclusion of various license agreements, including franchise agreement, foreign direct investment, etc.
3. It is revealed that the essence of liberalization is almost complete equalization of the residents and non-residents in their rights of doing business, taxation, use of property, etc.
4. It is shown that existing in the countries under study forms and ways of doing business used by transnational corporations have peculiarities. For example, in China (from 2010) creation of a partnership with foreign investments became possible; the Republic of South Africa provides a recognition of a foreign companies as a domesticated companies, – being registered such a company is transferred in South African one and begins to act in accordance with the provisions of the South African Companies Act, as if it was originally incorporated and registered as such, as well as the creation of such a contractual mechanism as a trading trust; in Brazil a specific form of functioning of TNCs is the ability of the construction of a consortium or a temporary union of enterprises (consorcio / unión de empresas) arising on the basis of the agreement on economic cooperation; in India a foreign company that concludes a contract to fulfil a project with Indian company may set up a representative office for this specific project; in Russia it`s possible to create an investment partnership.
5. It is established that the uniform legal construction for the existence of transnational corporations reflected in the legislation of all BRICS countries is the establishment by a foreign parent company of a national subsidiary (-ies). Extensive use of this legal mechanism is promoted by the fact that any subsidiary is a legally independent entity with only economic dependence on the parent company.
As a form of overseas capital within the domestic market of BRICS countries structural sub-divisions of foreign companies in the form of representative offices and branches are also widespread.
It`s found that representative offices are often used to fulfil business communication and research the domestic (national) market of the country as for the relevance of the products of its parent company whereas branches (affiliates) are often used for industrial and economic activities.
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Next. Historically developed differences in the concepts of a contract prevailing in common law and civil law countries are now subject to the dynamic effect of unification. Exactly from this point of view we`ve analyzed the provisions of the national legislation of BRICS countries with regard to the “treaty” and came to the following conclusions.
1. During the study the following general principles of contract law practiced within the BRICS countries are revealed: freedom of contract with regard to legal equality, mutual consent, good faith of the parties and their compliance with the applicable legislation and the public interests.
2. The peculiarities of the modern national doctrines of contract law are investigated and can be summarized as follows.
In Brazil the concept of “contract” is not specifically formulated whereas transactions (contracts) are governed by the provisions of the Civil code on obligations. The latter is distinct and divided into the obligations to provide things (certain and uncertain); to do or not to do something; divisible and indivisible; joint and several and alternative. In relation to the contracts acting Civil code gives force to their social function and extends the principle of solidarism to them.
In Russia main provisions regulating contracts are concentrated (as in Brazil) in the General part of the Law of obligation within the Civil code, where a “contract” is defined as an agreement of persons aimed at establishment, modification or termination of civil rights and obligations.
In India various doctrinal interpretations of the concept of a “contract” have been by now reflected in the Contract act in force in a common definition according to which a “contract” is an agreement enforceable by law.
According to the doctrine of China under “contract” means an agreement between equal subjects aimed at the establishment, change and termination of civil rights and duties.
The SAR does not have any specific law of contracts. The order that governs the entrance, completion and termination of contracts is determined by the precedents, laws and provisions of contractual relationships. The laws of SAR have many different meanings of contract that have been given concrete definitions through the concept of “agreement”. For example, contract is an agreement of mutual rights and obligations. At the same time there exist three concepts that explain the substance of a contract: Will Theory – which explains the concept of a contract being governed by the will of its parties, entered under mutual agreement. The Application Theory is based on the concept of contracts being not the presence of coincident wills of parties, but their external expressions manifested in their actions. The Assumption Theory considers that the contract is based on the intentions of the parties reasonably assumed as mutual intentions. However, it is generally accepted that the contract can not be one-sided, it is a legal action with the legal consequences of the intentions of the parties and with the promise of the parties with regard to the implementation of a number of obligations.
3. Understandably the study of legal orders of the BRICS countries led us to the discussion of the harmonization of the conditions of declaration of contracts & agreements valid, since all systems under study adhere to the following 4 conditions of validity of the contract: 1) presence of active and passive capacity (state of sound mind, etc.) of the party to the contract; 2) the need to define the subject of the agreement, including from the standpoint of compliance of the concluded (signed) contract with the provisions of the current legislation; 3) the existence of free will (consent), expressed in response to the offer in the form of its acceptance; 4 ) presence of the legal basis of the contract – causa (eg., Brazil) or the consideration (eg., India).
Non-compliance with any of these conditions at least in part invalidates the contract and leads to a restitution.
Each of the abovementioned conditions has national features reflected in the laws of the countries under study.
Regarding condition 1 – legislation of all BRICS countries presume person in the age of majority legally capable but the very age of majority varies from country to country (for example, in Brazil persons in the age from 16 to 21 years old considered relatively capable, and from 21 y.o. – capable, in Russia and China the age of majority is attained at 18 years of age). On the other hand legal capacity is sequent to the presence of rational activity (in India) or absence of mental illness (in Brazil). Legislation confers legal capacity to all individuals from their birth, whereas legal entities are capable depending on their competence with respect to various types of contracts (general / special).
Regarding condition 2 – specification of the subject of the contract is its main feature, that determines the type of a contract and applicable law which provides for the inclusion of a mandatory conditions.
For example, in Russia it means the need to comply with so called “essential” and “general” (in the terminology of its Civil Code) conditions of the contract; in South Africa – they are “basic”, “conferred by statutory law” and “expressed” conditions; in Brazil the specification of the subject of the contract in relation to things (in rem) should reflect their individualizing characteristics (as in other countries as so far as these characteristics determine the subject of the contract – sort, quality, quantity, etc.).
As for the property or goods being the subject of the contract – they must actually exist and be determined or determinable.
With regard to the actions that are subject to the contract the requirement for their real or legal enforceability exists.
As for compliance of the contract with legal provisions it`s treated widely, including, in addition to the compliance with the Constitution: compliance with the Civil Code and special laws (Brazil, Russia); Contract Act and other special laws (India, China); special laws and precedents (South Africa) – consumer protection acts also should be considered.
Regarding conditions 3 – in all BRICS countries, on the one hand, an inadmissibility of forcing the party to conclude the contract by fraud, misrepresentation, etc. is legally established; on the other hand, there is a possibility of concluding of a contract with “standard” (India, China, South Africa) or “general” (Brazil, Russia) terms worked out by one of the parties for repeated application and without discussion with the counterpart.
Regarding condition 4 – in addition to the acceptance of the offer in civil law countries a contract needs its legal purpose (Russia, China) or causa (Brazil) to be valid and as for common law countries (India, South Africa) consideration is a compulsory element for the majority of the contracts (except for the agency and donation). Consideration in India may be future (subject to performance) and present (active).
4. The unification of approaches to legal regulation of the requirements concerning the mechanisms of the conclusion of the contract was shown and resulted in the following: 1) the content of the offer shall fully describe the object and conditions of the proposed agreement and an acceptance must contain an unconditional consent with the terms of the offer; 2) the date of the conclusion of the contract is the date when the acceptance is sent to the offeror; and acceptance made with any reservation to the offer, turns into a new offer; 3) the offer is irrevocable for the period specified by the offeror for its acceptance.
It was revealed that in Brazil and China according to the special law trade advertising is recognized as a public offer addressed to an indefinite number of persons.
5. It`s established that the concept of “proper performance” of the contract is recognized by all BRICS countries and assumes the execution of the contract with regard to appropriate subject or action (1) to proper parties (2) at the appropriate time (3) and in the appropriate place (4). Being reflected by the national legislation giving the meaning of the word “proper” in particular application this concept invokes the need to specify all the conditions in the contract between the parties. In addition to the abovementioned requirements Chinese law also stipulates the procedure for determining (if necessary) quality, price or methods of payment, the allocation of costs.
The laws of all countries studied (except for South Africa that adheres to the idea of “privity of contract”) allow performance of the contract to a third party designated or authorized by creditor or debtor, and the responsibility for the proper execution that of the parties to the contract.
6. Agreement can be terminated in all BRICS countries in the following situations: 1) on reaching a legal purpose for which the parties entered into an agreement when it is properly done; 2) by the will of the parties to the agreement – if there is a novation, forgiveness of debt, etc.; 3) due to the objective reasons – when impossibility of performance, death of a citizen or liquidation of a legal entity – party to a contract takes place, etc.; 4) if an improper performance of contracts (for instance, significant violation of the terms of the contract) takes place.
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As for such an important element in any legal system as legislation aimed at the protection of the results of human intellectual activity, it has also become the subject of the author’s attention. We selected three countries of the BRICS for the analysis – Russia, India and China. The analysis revealed the following.
1. The objects of the patent rights in RIC countries are results of intellectual activity in the form of inventions, utility models and industrial designs.
It is established that a list of objects of patenting that is set out in the legislation can be recognized as having a similar character, whereas lists of non-patentability vary. Thus, Indian law contains detailed list of such objects which is wider than the laws of China and Russia provide. At the same time, common ground for the patenting prohibition in RIC countries is contradiction to morality and public interest.
2. It is shown that under the laws of those countries the main features of patentability is the novelty of the patented object (no common knowledge), inventive level (step) and industrial applicability. Herewith legal norms, being broadly similar on this issue at the level of ideas cannot be distinguished both in terminology. For example, the “industrial applicability” in Russia is termed as “industrial application” in India and the «practical applicability” – in China.
3. It was revealed that the subjects of the Russian Federation and China patent law to inventions, utility models and industrial designs are their authors or statutory (heirs) or contract (employers) authors successors. In RIC countries legal mechanism provides that the owner of patent rights for inventions and industrial design is the true inventor (author) or the legal successor (including a person who will pay for this sample at any stage of its creation, for example, in India).
4. With regard to patent rights, general provisions of patent laws within RIC countries fix, in particular, the rights of authorship, right for author’s name, right for a patent application, right for a patent. The first two competences are inalienable powers of the author, the second two may be assigned to any person on the basis of the contract.
The legislation of RIC countries relates the issue of accessory of patent rights to the employee (the author, the creator of the design) or employer to the field of labor contracts on the basis of the separation of the actual and potential authority over inherently belong to the author (e.g., as in the case of copyright law – the right of authorship the right to the author’s name, etc.) and exclusive (e.g., the right to obtain a patent and use of patents) – belonging to the employer. At the same time importing or manufacturing of patented products by the Government or on its behalf is not an infringement of patent rights (for example, the right to use patented entities) (but solely for the purpose of its use – eg., India), which can probably be regarded as correct in the context of state struggle for improving the country’s competitiveness.
5. It is shown that the patent legislation of RIC countries contain detailed procedure for filing patent applications and requirements for their content part. However, while the latter have quite similar general character, in contrast to Russia and China filing an application under the law of India is the procedure, which lasts for one year from the submission of preliminary application to the filing of the final applications with constant providing of information provided by the by the applicant to the Patent Office on the patents available in in this period in the US, EU and Japan, which, in our opinion, of course, creates great difficulties for the subjects seeking patent protection for their developments.
Regarding to the rights of the inventor (the author, the creator of a development) for reward, legal regulations of RIC countries include the employer’s obligation to pay such a remuneration, fixing the size and terms of payment (e.g., depending on the resulting economic effect of its used in China, etc.). These regulations are complemented by the possibility to harmonize this issue in the contract between the employer and the employee and in court during the court-based dispute settlement (e.g., India, Russia).
6. The protection of patent rights, implemented in the countries RICK, includes both judicial and extra-judicial proceedings. In case of violation of any patent right the courts of the RIC countries use a variety of remedies: injunction, compensation of damages and lost profits, fines, confiscation or destruction of infringing objects (goods).
Period of validity of exclusively rights to objects of industrial property in various RIC countries differ: in Russia from 2 (invention) to 15 (industrial design) years; in China from 15 (industrial designs) to 20 (invention) years; in India – 20 years for all types of industrial property.
7. Having investigated a number of authors` rights it was confirmed that the RIC countries divide these rights into moral rights that cannot be inherited and alienated in any way, and exclusive rights, that can be succeeded. In India the list of powers of the authors vary dependently on the protected object, in Russia and China such a difference is not upheld.
In other words, on the one hand, author, creator of the creative result possesses the right to use it, which is exceptional and can be freely transferred to others (the creator may grant the permission to use the result). This power belongs to the property rights and in many ways really similar to ownership. On the other hand, the author has a combination of moral non-property rights (powers) such as the right of authorship, right to author’s name, etc., which may not be alienated from their owner by their very nature.
At the same time there is no insuperable boundary between exclusive and moral rights; on the contrary, they are closely interrelated, forming an indivisible unity aimed at the protection of authors from all sorts of abuse and violation.
8. Infringements of copyright or related rights in India, Russia and China result in civil, criminal and administrative responsibility. Judicial and extra-judicial (including self-defense) methods of protection are used in the form of confiscation of counterfeit goods; imposition on it or on the proofs of the illegal conduct of seazure; destruction of illegally produced, distributed or intended for unlawful distribution copies of works, which belong to the offender, etc.
There are also other protective measures, including technical means and activities of specially created for these purposes societies for the collective management of such rights.
This allows us to conclude that the protection of copyright and related rights of the countries studied is presented in a similar ways.
It should be noted that this study was conducted through the prism of the idea that commercialization of innovation is the basis of development of market of intellectual property.
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Speaking about the BRICS countries and the legal framework of the labor relations with a foreign element we should note that it’s a very interesting question. According to a research, which is not completed yet, we’ve found out that:
1. The states approach on the issue of usage or non-usage of international law within the BRICS countries drastically affects the purview of private international law in such a way that the recognition of the priority of the norms of duly ratified international treaties and agreements expands the possibilities for the application of international legal acts in the sphere of private law, whereas the idea of the necessity of their primary “transformation” (as, for example, in China) makes their application to the discretion of the state authorities of a country.
This situation confirms the idea that the main and most important source of private international law is national law: each state, including the BRICS countries, has its own laws and through the system of conflict-of-laws rules determines the regulation of private law relations of cross-border nature, and only the rule of law provides restrictions on the use of foreign law. We believe this to be true to life also with respect to labor relations, although the labour relationship are based on the unity of private and public principles.
2. In case of solving conflict-of-laws problems in labour law relations with regard to conflict of labour laws rules of BRICS countries connecting factor – the principle of the place of work – the country where an employee normally performs his or her employment duties (lex locus contractus, e.g., South Africa, China) – is most commonly used being supplementуd by the law of the place of conclusion of the contract (lex locus contractus, e.g., SAR). Such an approaches, however, inevitably face with some opposing ideas on territoriality (e.g., South Africa) or extra-territoriality (e.g., Brazil) of national laws. And the admissibility of application of national treatment (national regime) for foreigners (eg., Brazil, Russia, South Africa) legitimately justified based on the idea of equality of rights of citizens of a certain state and foreign citizens on its territory.
3. As for the tendency to establish multilateral conflict-of-laws provisions at the regional level, this idea in practical terms is leveled. In this regard the solution of application of conflict-of-law regulation in labor relations involving foreigners is the most acceptable on the way of use of in favorem principle, corresponding to the legal nature of labour rights, which should be practically applicable in such a way that the parties` choose of law applicable to the employment contract, shall not lead to deterioration of working conditions of the employee compared with the mandatory provisions of the law, which would have been applicable in the absence of such a choice, and this choice should be made by the employee deliberately in writing and at least at the conclusion of their labour contract.
4. With respect to the settlement of labor disputes with participation of foreign element witin the BRICS countries taking into account the example of Brazil and China it`s revealed that, in line with different views on the desirability and importance of the litigation or conciliation-arbitration proceedings, Brazil and China now recognize the reasonableness and effectiveness of both mentioned procedures for settling labour disputes as a means of social management and control.
In Brazil the system of labour justice is seen as a method of separation of labor law (including through regulatory means in the form of a special act) in the context of the deepening of its further autonomy. However, the basis of this isolation is shaken by the trend to the actual admissibility of alternative ways of settlement of labour disputes (conflicts). Whereas in China along with the tradition-based ideas of Confucianism that rely on the power of persuasion in opposition to the force of law, first, there is an increased confidence to the role of law in the area under study, and second, to the role of the court in dispute settlement.
5. The analysis of the Russian labour legislation allowed to establish, that that the scope of application of Russian labour law is governed by the general principle national regime given to foreign citizens, stateless persons, organizations established or founded by them or with their participation, and its application is clearly insufficient because of the diversity of the employment relationship in modern conditions. Thus, in multinational companies employees formally conclude labour contracts and enter into labor relations with a Russian legal entity, which is part of a TNC, whereas in fact the level of wages, other working conditions, personnel policies, etc. are determined by the parent company. It is not clear then, for instance, how can be guaranteed the right of a Russian worker to participate in collective negotiations conducted by the company in general.
Filling of the mentioned and other gaps is crucial for normal economic cooperation with foreign partners. One of the possible prospects of solving problems with regard to the existing mechanism of legal regulation of labour relations with a foreign element, is the interaction of States in associations and forums like the BRICS, which with time, may develop acts (documents) similar to the CIS Agreement on mutual recognition of rights to compensation of harm, caused to the employee (1994), and other similar acts.
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Surely, one or more studies would not be able to outline legal framework of different relations within the BRICS countries with necessary breadth. Some components of such a relationship require special consideration, meanwhile the other ones need the generalization of the results of the discussions caused by them.
However, these studies show that BRICS countries have much in common in approaches to the legal regulation of private law and labor relations. These similarities should be used for the expansion of relations between our countries, deepening cooperation and filling it with new content.
In the consideration and study of these issues, the authors see prospects of their further work.