The Pension Fund of Russia, FIU, aims to use blockchain to store and track employment contracts.
By the end of this year, the FUI will submit plans to integrate all FIU systems onto one blockchain.
Cost saving
The FIU has considerable amounts of information on tax deductions, insurance premiums of employees and other employee financial information. Hence it hopes that placing the information on a distributed ledger will drastically lower the cost of storing and servicing large amounts of employee data.
Moreover, this will also improve data storage practices and protect employees from fraud.
Reduce employment disputes
According to Rostrund, there have been 465 000 appeals from Russian citizens for violations of labor rights in the past year.
“Today, the level of violation of labor agreements between employees and employers is very high. This mainly applies to small and medium-sized enterprises. The employee’s rights are often violated from the very beginning …but also when they are laid off,” said Alexander Shcherbakov, Professor at the Russian Academy of Science and Technology.
Using distributed ledger technology will increase the transparency of employment contracts, allowing law enforcement agencies to police them and decrease the number of labor agreement violations.
Nevertheless, the FIU adoption of blockchain is not imminent. In June, Prime Minister Dimitry Medvedev stated that blockchain would start to be used in 2020. After the blockchain goes live, paper contracts will continue for some time.
Other legal contract blockchain initiatives
While the FIU project is limited to employment contracts, there are several more general smart legal contract initiatives.
Yesterday Data61 unveiled plans for an Australian National Blockchain for business contracts.
A month ago the Agreements Network announced it’s working with three law firms and several technology providers on a similar initiative. Plus there’s the OpenLaw project which uses Ethereum. Both of these are focused on standardized contracts.
Accord is a very broad legal consortium that’s developing standards for smart legal contracts. Members include many of the largest law firms in the world.
Finally, Deutsche Bahn is working on a system to manage contracts with other group companies and potentially suppliers.
