It’s <i> Babushkas </i> vs. Capitalist Giant and the Western Way : Russia: Fired housekeepers sue Radisson-run hotel for millions. Test of old labor laws gets headlines.

Ludmilla V. Gubareva once belonged to the ranks of Russia’s invisible women: the army of long-suffering middle-aged babushkas who scrub, sweep, mop and even shovel snow but get neither good wages nor respect.

Now the pleasant, plump, 54-year-old charwoman and her 59-year-old sister are suing the American-managed Radisson Slavayanskaya Hotel for wrongful dismissal. They have astounded their downtrodden countrywomen by demanding $10 million each in damages.

“That’s what I thought I was worth,” Gubareva said as she waited Tuesday in a dingy courtroom still emblazoned with the Soviet slogan, “Proletarians of the world, unite!”

The case of the two sacked sisters versus the capitalist hotel giant has grabbed headlines here. Some see it as a precedent-setting test of Russia’s Soviet-era labor law, which made it nearly impossible to fire incompetent workers and is now under pressure from Western-style management that wants to reward good employees and punish loafers.

But as unemployment rises, older people and unskilled workers in particular worry that they may end up as wage slaves to Western imperialists, with no benefits or job security.

So far, the court battle looks like a draw.

Gubareva’s sister, Tamara Yashchina, won a victory early this month when the Kievsky District People’s Court ordered her reinstated in her old job cleaning the kitchen of the four-star hotel where President Clinton stayed during his trip to Moscow last month.

The court also ordered the Radisson to pay $94 in back wages that Yashchina claimed she was owed after the hotel did not renew her one-year employment contract. The split decision displeased both sides and is being appealed.

The women claim they were never told that their job performance was unsatisfactory or given a chance to improve before they were canned. The hotel says the women had a history of bad job appraisals and that, as a result, they were not paid a hard-currency bonus.

Russian labor law allows employers to dismiss workers only for such offenses as tardiness, truancy or coming to work drunk. It does not make allowances for such subjective criteria as whether an employee is nice to the customers, said Vladimir Draitser, general director of the Russian-American joint venture that runs the hotel and an adjoining business center.

“Smiles, friendliness--these are concepts that are just unknown in Soviet labor standards,” Draitser said.

“Reforms will never go anywhere” unless Russian labor law embraces a merit-based system, he said.

Gubareva said her problems started after she and her sister defended another cleaning woman who they believed had been fired without cause. Gubareva, a former building engineer who once supervised 134 people, believes she would still have her job if she were younger.

“Of course they would rather hire a young person than me,” she said. But “I was not afraid of hard work. When you realize it is necessary, you do it.”

Still a year away from receiving a pension, Gubareva says she cannot find another job and has been selling her jewelry to scrape by.

She has already waited more than a year for her day in court, but a long-delayed hearing scheduled for Tuesday was postponed again indefinitely, because the judge was ill. Draitser said the women are trying to take advantage of deep American pockets. Their attitude is, “If these are rich imperialists, let’s go after them,” he said.

The hotel settled out of court with two other fired cleaners, Draitser said, but the two sisters refused to settle, instead upping their demands from $50,000 to $10 million as the case proceeded.

Russian labor experts are divided as to whether the existing law inhibits free-market business development.

Economist Gennady S. Lisichkin, head of the Assistance to Entrepreneurs Assn., noted that the legal system is in such turmoil that some pre- perestroika entrepreneurs are still in prison for “economic crimes.” He said the sisters’ case shows the “colossal discrepancy” between the market ideology espoused by the new Russia and the Communist values on which current labor laws are based.

Western businesses are unlikely to invest in Russia if they are forced to keep unacceptable workers, Lisichkin said.

Employers may fire a worker for incompetence if the trade union consents and can appeal to a court if the trade union refuses, said Semyon A. Ivanov, who argues against dismantling hard-won worker protections.

“Some labor experts now think that to really boost free enterprise in Russia, trade union control must be totally abolished,” Ivanov said. “I cannot agree.”

In Soviet days, the discrepancy between what the state promised and how workers lived was sharp enough to prompt the popular saying “We pretend to work, and they pretend to pay us.”

Now some workers can earn substantial free-market salaries, but labor activists say they are also more vulnerable.

“Using the fear of unemployment, managers--whether at private or state enterprises--are tyrannizing their workers,” said Sergei N. Ryzhov, chief workers’ rights defender at the trade union that has taken up Gubareva’s case.

Worker safety has deteriorated as cash-strapped factories cut corners, Ryzhov said, and traditional unions are being dissolved in favor of alternative organizations that are often slavishly pro-management.