Under Russian employment legislation there is no distinction between blue-collar and white-collar workers.
However, senior managers enjoy less protection than "regular" employees; fixed-term employment contracts are permitted and directors may not hold a second job without the company’s authorisation.
Employment agreements concluded with remote employees may include additional grounds for termination of employment. Remote employees are required to use telecommunication networks, such as the internet or phone, to perform their duties.
In addition, certain categories of employees enjoy additional protection from termination because of their family status. In particular, pregnant women cannot be dismissed by an employer except in the case of the employer's liquidation. There are also other restrictions that employers must take into consideration when terminating the employment of employees who raise children and employees under the age of 18.
Employees working in Far North regions of Russia and other regions with abnormal climatic conditions enjoy additional statutory benefits and guarantees over and above those received by employees working in other regions.
The terms of employment must be included in a written agreement, to be concluded with each employee no later than three days from the date on which the employee started work. An employment agreement may provide for a delayed date of commencement of work.
The agreement must reflect the employee's position, conditions of work, compensation and benefits, the working regime (if it differs from the normal working regime at the employing entity), conditions of remuneration, leave and social insurance terms. The employers must also include all mandatory provisions of the Russian Labour Code ("Labour Code"). An employer and an employee may agree to other specific terms of employment but these should not diminish the statutory level of guarantees and benefits encompassed by the Labour Code and other laws in the sphere of employment.
The employee's probationary period should be indicated in the employment agreement. If the employee started work without an employment agreement, a provision on a probation period may be included in the employment agreement only if the parties had a written agreement to that effect and such agreement was concluded prior to the employee starting work. A typical probation period for regular employees is three months. The probation period for the head of a Russian company, the deputy head, chief accountant and deputy chief accountant and the heads of branches, representative offices and other business subdivisions may be up to six months. For an employment agreement concluded for a term between two and six months, the probation period may not exceed two weeks.
An individual can have only one primary job, which is generally full time. At the same time, a regular employee cannot be prohibited from holding a secondary job with the same or another employer in addition to that full-time employment.
Generally, an employment agreement must be concluded for an indefinite period of time. If there are no provisions on the term of employment in the agreement, it is considered to have been concluded for an indefinite term. A fixed-term employment agreement may only be concluded in the specific instances listed in the Labour Code. The reasons for entering into a fixed-term employment agreement, as well as the term of the agreement, must be indicated in the employment agreement.
The regular working hours should not exceed 40 hours per week. As a general rule, any hours worked by an employee at the employer's formal request over this amount are considered to be overtime for which additional compensation is due. Employers are required to keep a record of each employee's working time.
Overtime work requires an employee's prior consent and may be required only in extraordinary circumstances, eg the failure of another employee to show up at the designated time, etc. Only in case of a disaster or in emergency situations may employees be requested to work overtime without their consent being required.
An employee cannot be required to work more than four hours of overtime over two successive days and the total duration of overtime work is limited to 120 hours per year.
Certain categories of employees, including employees under the age of 18, pregnant women and some others are prohibited from working any overtime. In the case of assigning overtime work to other categories of employees, eg disabled employees and women with children under the age of three, the employer must obtain their prior written consent and confirmation that the overtime work is not prohibited by reason of medical conditions. In addition, the employer must notify them in writing that they may refuse to work overtime.
Employers may establish an open-ended working day regime for their managerial employees. Employees working under an open-ended working day regime may occasionally be requested to work outside their regular working time (ie 40 hours per week) without any additional payment. However, as compensation for an open-ended working day, these employees are entitled to additional annual paid vacation of not less than three calendar days.
Employers and employees may agree on a flexible hours arrangement.
A part-time working day or a part-time working week may be established by agreement between the employer and the employee, except in cases where such part-time work has been introduced by the employer to prevent mass redundancies. The employer is obliged to set a part-time working day or working week at the request of a pregnant woman, a parent (trustee) of a child of up to 14 years of age (or disabled child of up to 18 years of age) or a person taking care of a sick family member. Employees working part time are entitled to compensation pro rata to the time actually worked and must receive all other statutory guarantees and benefits the same as full-time workers.
Wages must not be lower than the minimum monthly wage established by the applicable legislation at federal and regional levels (the latter may be set at a higher rate than the federal minimum wage). The minimum monthly wage is subject to frequent indexation.
Salary payments must be made to employees every fortnight on a date set by the company's internal labour regulations or by the individual employment agreement. For delaying the payment of salary and other employment-related payments, an employer must pay an employee interest of at least 1/150th of the Russian Central Bank’s key interest rate on the unpaid amount for each day of the delay. Moreover, employees have the right to stop working, with prior written notice given to their employer, if their employer has delayed payment of their salary for more than 15 days.
As stated, employees are generally entitled to the base salary set in their employment agreements; some statutory increments are applicable to employees working in Far North regions and in other regions with abnormal climatic conditions.
Employers are not required by law to pay any bonuses and incentives to their employees unless such obligations are provided for by their individual employment agreements or by the employer's local policies. The criteria for bonus eligibility and the terms of bonus payments are to be set forth in the employer's local bonus or remuneration policy or stipulated in the employment agreement.
As a general rule, salaries must be paid in the currency of the Russian Federation (Russian rubles). Employment-related payments made in foreign currency are generally considered by the Russian labour regulatory authorities as a violation of the law.
The minimum annual paid vacation is 28 calendar days. An employee accrues the right to annual paid vacation upon starting work with a particular employer and can use it once he or she has worked for six consecutive months, unless otherwise agreed. However, some categories of employees are entitled to additional paid vacations (eg employees working under an open-ended working day regime, employees working in Far North regions and some others). Upon termination of employment, an employee is entitled to receive compensation for all accrued but unused vacation days.
In case of illness, employees are entitled to paid sick leave subject to providing their employers with a medical certificate. Currently, the statutory sick leave allowance is rather low. Sick leave allowance is paid by the employer and is covered by the Russian State Social Insurance Fund (except for the first three days of each temporary sickness period, which should be compensated by the employer).
Female employees are entitled to maternity leave of 70 days (84 days in the case of a multiple pregnancy) prior to delivery and 70 days after the birth (86 days in the case of complications and 110 days in case of a multiple pregnancy). Maternity leave is provided to a female upon request, supported by a medical certificate confirming her pregnancy and setting the duration of the leave. The maximum daily maternity leave allowance is set for a particular year, currently at RUB2,150 (approximately USD34). This allowance is paid by the employer upon granting maternity leave, which is offset against contributions to the Social Insurance Fund.
Following the maternity leave period, the employee is entitled to take paid childcare leave until the child reaches the age of three. This leave can also be taken by the child’s father, grandmother, grandfather or another relative who takes care of the child, provided that the mother of the child has returned to work.
The maximum monthly amount of statutory childcare leave allowance is set for a particular year; in 2019 it is limited to RUB26,152.27 (approximately USD412) and will be paid until the child reaches the age of eighteen months. The childcare allowance for the period until the child reaches the age of three is RUB50 (approximately USD0.8) per month. The government has prepared a draft bill aimed at increasing childcare allowance for this period. If this bill is adopted, the amount of childcare leave allowance will be increased up to two times the regional minimum monthly wage if the size of the average per capita income of the family is less than two times the regional minimum monthly wage.
During the period of childcare leave, an employee may choose to work part-time, preserving their entitlement to statutory childcare leave allowance. During the entire period of childcare leave, the employee retains the right to return to their job and the full leave period is included when calculating the employee’s length of service.
An employee who has adopted a child is entitled to take adoption leave. This lasts until the child is 70 days old or, in the case of adoption of two or more children, 110 days. The maximum amount of adoption leave compensation is the same as sick leave compensation. If the child is adopted by both spouses, adoption leave is provided to one of them at their choice. If a child is adopted by a woman, she may take maternity leave instead of adoption leave. An employee who has adopted a child must be provided with childcare leave at his or her request.
Russian civil law recognises and protects trade secrets. Employers may include confidentiality obligations in employment agreements with employees if the employer has established a trade secrets regime and if the employee needs to access trade secrets in order to perform his or her duties.
In the absence of a trade secrets regime, confidentiality provisions may either be included in the employment agreement or concluded as a separate civil law agreement. Confidentiality covenants must include a description of the confidential information as well as specific employee obligations with regard to handling such information and liability for its disclosure or misappropriation.
Confidentiality obligations may remain in force even after the termination of employment, provided that this was agreed upon in writing by the parties.
Financial Liability of Employees
An employee must compensate his or her employer for actual damage caused; lost profits are not recoverable from an employee. Generally, an employee's financial liability is limited to the amount of their average monthly earnings. Full financial liability may be imposed on the company's head, his or her deputies and the chief accountant, or if the employee deliberately caused the damage or disclosed legally protected secrets.
Financial liability may only be imposed on an employee following compliance with a special procedure provided for by the Labour Code.
The only category of employees for whom employers can set non-competition clauses are CEOs (general directors). However, such limitations if set post-employment cannot be enforced. Non-competition clauses are not enforceable for other categories of employees.
Russian law establishes the basic principle of freedom of labour, which is understood as an individual’s right to work and to freely choose the type and place of work.
Under Russian law, no agreement may set out any terms that limit the rights of employees. Where any such terms are included in any agreement, those terms cannot be applied.
Under the Russian Civil Code, any waiver of a right to which an individual is entitled by law will be deemed null and void. Thus, even if an employee and an employer agree to limit an employee's right to work for any company, such a condition cannot be effectively enforced against the employee. Further, if an employee violates any such contractual limitation, the employer will not be able to impose any liability as against the employee.
The above conclusions are supported by the current practice of the courts of the Russian Federation, according to which non-competition clauses are generally deemed to be unenforceable. In addition, if the state authorities find the presence of non-competition clauses, the employing entity and its CEO may be subject to administrative liability.
Nevertheless, employers sometimes include non-competition clauses in their agreements with employees and, as a way to motivate employees to comply with the relevant limitations, employers pay compensation. In such cases, if an employee complies with a non-competition clause and a company does not pay him or her the compensation, the courts may grant compensation if the employee can prove compliance with the relevant limitations. However, a court may also declare such agreement to be invalid and not grant anything.
As with non-competition clauses, non-solicitation limitations are not enforceable against employees (including CEOs) in Russia. This applies to both employees and clients.
Every person in Russia is free to use his or her abilities and assets for entrepreneurial or other economic activity not forbidden by law. No agreement may set out any terms that limit the rights of employees. Where any such terms are included in any agreement those terms cannot be enforced.
Even if an employee and an employer agree to limit an employee's right to solicit particular employees or clients, such conditions cannot be enforced and the employer will not be able to establish any form of liability as against the employee. Again, if the authorities reveal the presence of non-solicitation clauses, the relevant employing entity and its CEO may be subject to administrative liability.
However, if an employee signed a non-solicitation clause and he or she complies with it and if there is a contractual compensation for compliance, an employer will most likely have to pay it. As stated above, a court can also declare such an agreement invalid and not grant anything.
Data privacy provisions that apply in the employment sphere are contained in a number of laws, including the Russian Labour Code, the Federal Law of 27 July 2006 No 152-FZ on Personal Data etc.
In general, an employer may process an employees' personal data without his or her consent. However, for certain data processing activities, employers must first obtain their employees' written consent.
For instance, an employer must obtain written consent in order to transfer an employee's personal data to third parties (including other entities within a group of companies, banks, insurance companies, benefit providers, HR and accounting providers etc). Consent is not required when the employer is required to transfer data required by law (eg when the data is transferred to the Pension Fund or tax authorities or in other cases prescribed by law).
In addition, according to the Russian Labour Code, when processing the employees' personal data, an employer must comply with the following duties:
Importantly, according to Russian law, companies that collect the personal data of Russian nationals must ensure that the databases used to record, systemise, accumulate, store, amend, update and retrieve the data are located in Russia.
Only once personal data is collected in a primary Russian database may it be transferred outside Russia. This requirement cannot be circumvented, even if an employee gives his or her consent (without first storing it on a Russian server).
In practice, data localisation requirements may cause problems for multinational companies operating in Russia, since various global HR and CRM systems do not have Russian databases and companies have to use local intermediary IT solutions or find other workarounds.
Russian immigration legislation generally does not limit the number of foreign employees that can be hired by a Russian legal entity. However, a branch or representative office of a foreign legal entity may employ only a limited number of foreign employees as initially approved by the accreditation body (the standard quota is five persons). Nevertheless, it is possible to file an application to increase the number of foreign employees that a branch or representative office may engage.
Every year, the Russian government approves an allowable ratio of foreign to local employees for companies operating in certain industries/areas of business. For instance, in 2019 there were restrictions on the number of foreign employees for companies whose principal business included the cultivation of vegetables, construction etc.
An employer planning to employ a foreign national needs to check whether that person needs a visa to enter Russia or whether he or she is a national of a country that enjoys a visa-free regime with Russia; eg Ukraine, Moldova and several other CIS countries.
If a foreign national needs a visa to enter Russia, the employer needs to obtain the necessary work permit. Foreign nationals from countries enjoying a visa-free regime with Russia must obtain a patent for work. Work permits are obtained by the employer; patents are obtained by the foreign nationals themselves.
A work permit/patent and a Russian visa are different immigration documents; all of which are equally necessary. Foreign nationals working at accredited Russian branches or representative offices of foreign companies may also need to obtain a personal accreditation card from the Chamber of Commerce and Industry.
The term for processing the relevant migration documents, as well as their maximum validity period, depends on the procedure used by the employing entity and the type of presence the employer has in Russia. Therefore, employing a foreign national in Russia requires advance planning to allow sufficient time to complete all relevant procedures.
Employers who employ foreigners must complete a number of immigration formalities. In particular, the employer must notify the immigration authorities upon receipt of a work permit or the conclusion/termination of an employment agreement with a foreign citizen within three business days from the day the work permit was received or from the day the employment agreement was concluded/terminated.
Moreover, the Russian immigration authorities should be notified of the arrival of every foreign national entering Russia under any type of visa and persons enjoying a visa-free regime (ie the immigration notification requirement should be observed), although there are some exceptions to the notification requirements depending on the duration of the foreigner's visit and his or her employment status.
Three individuals may together, at any time, establish a trade union. No formal registration or notice to the employer is required. If a trade union is established, the following applies:
In Russia, trade union activity is not widespread. However, employees often create a union in case of conflict situations with the employer, including the imposition of disciplinary sanctions or dismissal, so as to provide additional protection.
In Russia, the main representative body is the primary trade union organisation.
In cases where the employees are not members of a primary trade union organisation or none of the existing primary trade union organisations consists of more than half of the employees, such unions are not authorised to represent the interests of the employees in a social partnership. The employees may, however, elect an alternative representative body at a general meeting.
Collective bargaining agreements may be signed at any time by the employer's and employees' representatives. Usually, collective agreements regulate issues relating to employee remuneration, additional guarantees and obligations for employees, labour safety, pension insurance, development of social partnerships and any other issues agreed by the parties.
Representatives of employers, trade union associations and representatives of the government can also sign collective agreements, eg on a federal industrial level. These agreements may impose additional duties on employers and grant additional guarantees to the employees and trade unions. Companies can decline to sign up to a new agreement by submitting a written refusal to the Ministry of Labour.
The termination of employment is strictly regulated by the Labour Code and can only be carried out on specific grounds. In most cases, specific procedural requirements must be complied with for the termination to be valid. Grounds for termination of employment can be divided into the following categories:
Usually, termination by the employer should be carefully structured and supported by the relevant documents.
Dismissal due to redundancy is one such basis for employment termination at the employer's initiative. When initiating a staff redundancy procedure, employers are not obliged to justify the economic reasons for redundancy; however, they must comply with the statutory procedure (ie notify the employee, trade union and employment centre on the forthcoming dismissals due to staff redundancy and offer to the employees all existing vacancies, including less qualified and lower paid jobs, that the employer has to offer in that area etc).
In the event that redundancy results in mass dismissal, the employer will be obliged to comply with additional requirements, including an extended notice period (of at least three months) applicable to notifications to the employment centre and trade unions (if any), consultations with local authorities and trade unions (if requested) and, as a result of such consultations, develop measures in co-operation with the employment centre to reduce the number of employees being dismissed (eg suspension of recruitment, creation of part-time employment schemes etc) or procure anticipatory professional training for the employees being made redundant.
The definition of collective mass redundancy that applies to employers in Moscow is: (i) the dismissal of more than 25% of the total staff in the organisation over 30 calendar days; (ii) 50 or more employees over 30 calendar days; (iii) 200 or more employees over 60 calendar days; or (iv) 500 or more employees over 90 calendar days. For other regions, separate criteria may be established.
For termination on some grounds, a notice period is required and notice should be delivered to the employee for signing, eg:
Severance pay is required in case of termination on some grounds, eg:
An employee can be dismissed for serious cause in the following cases:
In such cases, the employer is allowed to impose disciplinary sanctions, including dismissal.
To formalise dismissal on these grounds, the employer must request the employee to provide a written explanation regarding the alleged misconduct. Such a request must be issued in written form and submitted to the employee against his or her signature. The employee then has two working days to provide an explanation, otherwise the employer will be able to formalise the dismissal. It is only after the expiry of this period that the employer may then be legally allowed to impose disciplinary sanctions by way of issuing a relevant internal order, which must be submitted to the employee against his or her signature.
A disciplinary sanction may be imposed within one month from the date the employer learned of the offence committed or should have learned of it. The one-month period mentioned does not include those days when the employee is away from work due to sickness or vacation. In any case, a disciplinary sanction cannot be imposed if six months have expired since the offence was committed (two years if the offence was revealed because of an audit).
A disciplinary sanction for non-compliance with anti-corruption laws cannot be applied after three years from the date the offence was committed.
Termination by signing a mutual agreement on termination of employment is the most risk-free option to sever relations with an employee. The parties can agree on any terms and conditions that do not breach the general principles of the Russian Labour Code. The law does not require a notice period or severance payment.
Pregnant women are protected against termination at the employer's initiative (excepting termination due to the company’s liquidation). The following employees, among others, also enjoy additional protection and cannot be dismissed due to staff redundancy:
If an employee falls under one of the protected categories of employees, he or she cannot be subject to redundancy, but may be terminated by way of mutually agreed termination on other grounds, if applicable.
Moreover, staff redundancy cannot be applied to an employee while he or she is on a justified absence from work (eg while on sick leave or vacation).
Members of trade unions enjoy additional guarantees in the case of termination of employment. The Russian Labour Code requires the obtaining of the opinion of the primary trade union in cases of displacement of job positions occupied by regular members of a trade union or the dismissal of a trade union member for his or her repeated failure to perform job duties. In the case of termination of employment of the leaders of a collective elected body, the prior consent of a superior trade union body is required.
An employee can file a wrongful dismissal claim if he or she believes that his or her dismissal was in violation of Russian labour law, ie when an employee believes that the employer violated the dismissal procedures. However, not every violation of a procedure can result in the recognition of wrongful dismissal.
For instance, a dismissal will be recognised as illegal if the employer failed to offer an employee a suitable vacancy within the redundancy procedure or if the employer failed to duly notify the employee of the forthcoming termination within the established statutory period.
A dismissal would be illegal if the employer dismissed an employee at the employer's initiative when an employee was on sick leave or if an employee belonged to a protected category of employees who cannot be dismissed at the employer's initiative.
Sometimes a court may find that minor violations in the termination procedure do not constitute grounds for recognition of the dismissal as illegal. Such minor violations could include the employer's failure to duly notify the state employment centre of the forthcoming redundancy of employees.
If a court finds that the employer has dismissed the employee in violation of Russian law, the dismissal will be held illegal and the employee will be reinstated at work (if he or she requests reinstatement).
In addition, if the court finds that the dismissal was illegal, the employer will be ordered to pay the employee compensation for the forced absenteeism in the amount of his or her average earnings for the period from the date of dismissal until the date of reinstatement or the date of the court’s decision. The average earnings of an employee are calculated on his or her base salary, bonuses and commissions paid to him or her in the 12 months preceding dismissal.
If the court finds the dismissal illegal, the employee will be entitled to "moral" damages (in disputes over dismissal, moral damages are normally an insignificant sum of no more than USD300), as well as reasonable compensation for expenses incurred by the employee’s attorney, which in practice is a low amount.
An employee can file a claim of anti-discrimination on grounds that he or she believes that the employer has treated him or her unequally. Russian law guarantees that each individual has an equal opportunity to exercise their employment rights.
Pursuant to the Russian Labour Code, no person may be restricted in their employment rights, freedoms and privileges as a result of their sex, race, skin colour, ethnic status, language, origin, property status, family situation, social standing, official capacity, age, place of residence, attitude to religion, political convictions, affiliation or non-affiliation with public associations or any other circumstances unrelated to their professional "qualities".
According to the Russian Supreme Court, professional qualities refer to the ability of an individual to perform certain work functions because of their professional/specialty qualifications and his or her personal qualities (eg health status, level of education and work experience in a certain profession or industry).
If a court finds that the employer has violated the employee's rights for discriminatory reasons, the court can restore the violated rights of the employee (eg reinstate him or her at work). The employee will also be entitled to compensation for moral damages as well as reasonable compensation for expenses incurred by the employee’s attorneys. When filing a claim on anti-discrimination grounds, an employee has to prove that the employer took the relevant employment-related decision based on discriminatory grounds. There have been few cases where an employee has been able to prove discrimination.
There are no specialised employment forums in Russia. Employment disputes are resolved by the courts of general jurisdiction. In addition, employment disputes may be heard by commissions on employment disputes. The commissions on employment disputes are formed by representatives of the employees and the employer.
Resolving individual employment disputes by commissions on employment disputes is not popular in practice; employees prefer to address their claim directly to a court. In addition, commissions can only resolve a limited number of employment disputes. Certain types of disputes (eg claims on reinstatement at work, the employer’s claims on compensation of damage caused by the employee, compensation of moral damage etc) can only be heard by a court.
The decision of a commission is obligatory as regards the employer. However, both the employee and the employer may challenge the decision in a court of general jurisdiction within ten days of the date it was received.
The procedure for consideration of employment disputes by the courts is regulated by the Russian Civil Procedural Code. The decision of the trial court may be challenged in the Court of Appeal within one month of the date when the court issued the final version of its decision. In some types of labour disputes, court decisions are subject to immediate execution even before they come into force (this relates to decisions on reinstatement etc).
In employment disputes, employees can represent themselves or hire attorneys. Employers can be represented by a duly authorised attorney or an employee of the company.
As of 1 October 2019, the possibility of class actions will be introduced into the Russian Civil Procedural Code. According to the new legislation, a person or organisation will be able to apply to the court in defence of the rights and legitimate interests of a group of persons if the following conditions are met:
A claim would qualify as a class action if at least 20 persons have joined the group of claimants.
As a method of alternative dispute resolution, the parties can choose mediation. The Russian Labour Code does not directly provide for the possibility to address an employment dispute to a mediator, although it is not prohibited.
Nevertheless, if the employee and the employer choose to use mediation, this will not suspend the statute of limitations established for filing a lawsuit with a court.
In addition, even if the employee and the employer conclude a pre-dispute mediation agreement, it will not be enforceable and each of the parties would still be able to address their claim directly to the courts.
For the above reason, mediation is rarely used, most employment disputes are considered by courts.
A prevailing employee can be awarded attorney's fees. Conversely, an employer cannot recover attorney's fees even if the employer prevails in an employment dispute initiated by an employee.