Employment 2020

Last Updated September 08, 2020

Russia

Law and Practice

Authors



Baker McKenzie has a labour and migration practice group that advises clients on all matters of labour and migration law, from preparing employment agreements to obtaining permissions to hire foreign employees and individual work permits to successfully representing clients in individual labour disputes. The firm has also been involved in collective labour disputes and negotiations with trade unions, which have become more common recently on the Russian labour market. The firm's Russian practice is comprised of 12 lawyers in Moscow and St Petersburg, all highly adept at understanding the challenges of personnel planning and labour negotiations.

As of 5 May 2020, employers may take part in the experiment on the use of electronic HR documents, subject to approval by the Ministry of Labour. Employees take part in the experiment on a voluntary basis. 

As of 1 January 2021, employers may maintain employees' work books in hard copies only for those employees who have submitted a relevant written application before the end of 2020. For employees taking up employment for the first time, all information will be kept electronically. Employers’ officials will be held liable for repeated delay in submission of complete and accurate information on employees’ job histories to the informational system of the Russian Pension Fund.

Employers will no longer have to conduct preliminary and periodic medical checks of employees who spend at least half their working time at the computer.

Employees aged 40 and older are entitled to one paid day off per year to undergo health checks. The date of passing the health check is to be approved by the employer in advance. 

Temporary Measures

As of 18 March 2020, foreign nationals and stateless persons are temporarily restricted from entering the Russian Federation. This restriction does not apply to certain categories of persons, including:

  • holders of diplomatic visas, official visas or ordinary private visas issued in connection with the death of a close relative;
  • ship and railroad crews;
  • individuals permanently residing in the Russian Federation (Russian nationals with internal IDs and foreigners holding permanent residency permits);
  • citizens of Azerbaijan, Armenia, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Tajikistan, Uzbekistan and Ukraine arriving in Russia through air checkpoints and departing to their state of citizenship through air checkpoints and other checkpoints when travelling by other means of transport;
  • family members, guardians and trustees of Russian citizens;
  • transit passengers in air border crossing-points (if they do not go outside the border's points);
  • citizens of countries that concluded international treaties with Russia on visa-free travels and who enter Russia as diplomatic couriers or in connection with the death of a close relative;
  • foreign athletes and coaches;
  • foreign nationals arriving in Russia for the purpose of receiving medical assistance;
  • citizens of the UK, Switzerland, Turkey and Tanzania.

Recently, the restrictions to enter Russia were lifted for foreign nationals having the status of "highly qualified foreign specialists" if their entrance is approved by the Russian authorities. However, the ban on the entry of foreign citizens into Russia is extended until the epidemiological situation in Russia improves.

Foreign nationals from countries enjoying a visa-free regime with Russia who must obtain a patent for work are able to renew it an unlimited number of times. Previously, foreign nationals could renew a permit (the total validity of which cannot exceed 12 months) only once.

Currently, foreign nationals who entered Russia before 15 March can apply for a work permit with any type of visa as well as apply for patents for work irrespective of the purpose of entry to Russia, and the term of already-issued work permits and patents for work that expire during the period from 15 March to 15 September is suspended, and is expected to be further suspended. This is possible provided that employers comply with the restrictions and other measures introduced in Russia to ensure the sanitary and epidemiological well-being of the population. The same rule applies to many other documents (visas, temporary residence permits, residence permits, migration cards, refugee certificates, temporary asylum certificates, permits to attract and use foreign workers, etc), as well as many terms set within the framework of the regulation of the legal status of foreign citizens.

In addition, state authorities do not take decisions on the administrative expulsion of foreign nationals from Russia, on deportation or transfer to a foreign state as part of readmission, or the cancellation of previously issued visas, temporary residence permits and residence permits.

Employers in Russia are required to comply with sanitary measures developed by the Federal Service for Surveillance on Consumer Rights Protection and Human Wellbeing (Rospotrebnadzor). In particular, employers are required to:

  • minimise the number of employees working on its premises to the extent possible, with other employees being able to work remotely (see below);
  • ensure that employees use
    1. face masks/respirators – at their workplaces and in the employer's premises, except in cases when an employee is alone in a room,
    2. gloves – at workplaces and employer's premises when visiting common areas, including elevators, sanitary facilities, eating areas, as well as when touching door handles, handrails and other similar items;
  • ensure social distancing (1.5 metres) and if that is not possible, establish partitions between stationary workstations;
  • check the body temperature of all employees at the beginning of the working day and then at least once every four hours;
  • test at least 10% of employees for COVID-19 every 15 days, where 10% is calculated based on the number of employees actually reporting to the office.

In regard to remote working, at the current stage the tough restrictions on individuals' travels within the city and within the country have been lifted – however, a number of employers are still continuing their operations (where possible) on a remote basis. To arrange for employees' remote work, employers need to issue the relevant internal order (directive) requiring the employees to work remotely and providing for means of communication, reporting requirements, etc, and also, if possible, to conclude addenda to effective employment agreements on the specifics of remote work.

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 telephone, 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 the 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 may be up to six months for certain positions, such 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. 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. 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 Russia's Far North 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.

Employers are required by law to conduct salary indexation and must adopt relevant policies establishing terms for indexation. However, courts currently believe that it is possible to set in a policy that all benefits and additional payments provided to the employees (eg, bonuses, supplementary medical insurance, etc) are considered a part of salary indexation and that would allow not to increase the amount of base salary.

As a general rule, salaries must be paid in the currency of the Russian Federation, Russian rubles (RUB). Employment-related payments made in foreign currency are generally considered by the Russian labour regulatory authorities as a violation of the law.

Vacation

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 the Far North and some other regions). 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).

In some regions of Russia, the government has launched a pilot project, under which employees should claim the sick leave allowance not from the employer, but directly from the authorities. In Moscow, this project is to be launched from 2021.

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 RUB2,301.37. This allowance is paid by the employer upon granting maternity leave, which is offset against contributions to the Social Insurance Fund.

As above, in some regions employees receive the payment directly from the authorities.

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 RUB27,984.66 and will be paid until the child reaches the age of 18 months. There is no statutory childcare allowance for the period until the child reaches the age of three, but employers may (although are not required to) establish it at its own discretion.

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.

Confidentiality

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, if such limitations are set then 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 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 then 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.

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). Consent is not required when the law requires employer to transfer data (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:

  • employee personal data may be processed exclusively for the purposes of ensuring compliance with laws and other regulatory legal acts, job placement, training, assisting professional development and advancement, personal security, monitoring the amount and quality of their work and ensuring the safety of the operator's property;
  • the personal data should be received from the employee – if the employee's personal data can only be obtained from a third party, the employee concerned shall be notified beforehand and must give the operator his or her written consent thereto;
  • the operator has the right to receive and process data about the employee's membership of public associations and their trade union activity to the extent permitted by the legislation of the Russian Federation;
  • whenever decisions are made that affect the employee's interests, the operator shall not rely on personal data received exclusively as a result of automated processing or exclusively by electronic means of data transmission; and
  • an employer shall protect the employees' personal data from improper and unauthorised use or loss and implement other organisational and technical measures to protect the employees' personal data.

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; this may vary from 20% to 80%. For instance, in 2020 there were restrictions on the number of foreign employees for companies whose principal business included the cultivation of vegetables, construction etc. In practice, engagement of foreign employees was significantly affected by measures aimed to prevent COVID-19, but these measures are temporary. Currently foreign nationals are allowed to enter Russia to work subject to obtaining additional confirmation from Russian authorities, but are required to undergo a 14-day quarantine. 

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, Moldova and several other countries in the Commonwealth of Independent States (CIS), as well as Ukraine.

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 for work 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. Currently, due to measures aimed at prevention of COVID-19, engagement of foreign nationals is more complicated although still possible. 

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:

  • the trade union has the right to check the compliance of the employer in respect of labour and health and safety legislation;
  • the employer must provide the trade union with the premises and equipment required for the trade union’s operation;
  • if more than half of the employees join the trade union, it may initiate collective bargaining procedures;
  • a collective agreement may only be changed subject to obtaining the prior consent of the trade union to implement the proposed changes;
  • the majority of internal policies, including the remuneration and bonus policy, may only be changed upon consideration of the trade union's reasoned opinion;
  • the trade union should be notified in advance of any staff redundancies;
  • a member of the trade union may be dismissed at the employer’s initiative only upon consideration of the trade union's reasoned opinion on dismissal; and
  • an elected leader, his or her deputy and members of the elected local union body (committee) may be dismissed at the employer’s initiative only with the prior written consent of the superior trade union body.

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 consist 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:

  • termination by the employer;
  • termination due to circumstances beyond the parties' control;
  • termination by mutual agreement between the employee and the employer;
  • termination by the employee;
  • termination as a result of a breach of the mandatory rules established by the Labour Code or other laws; and
  • termination on other specific grounds applying to certain categories of employees.

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).

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) or procure anticipatory professional training for the employees being made redundant.

The definition of collective mass redundancy that applies to employers in Moscow is:

  • the dismissal of more than 25% of the total staff in the organisation over 30 calendar days;
  • 50 or more employees over 30 calendar days;
  • 200 or more employees over 60 calendar days; or
  • 500 or more employees over 90 calendar days.

For other regions, separate criteria may be established.

Currently, and until 31 December 2020, employers should also submit information on the redundancies and some other types of termination via a special governmental online portal https://trudvsem.ru/.

For termination on some grounds, a notice period is required and notice should be delivered to the employee for signing – for example:

  • in the case of staff redundancies or liquidation of the employer, the employee must be notified at least two months in advance;
  • in the case of termination due to unsatisfactory results from the probation period – at least three calendar days before the expiry of the probation term;
  • in case of termination due to the expiry of a fixed-term employment agreement – at least three calendar days before the expiry of the agreement term.

Severance pay is required in case of termination on some grounds – for example:

  • in case of staff redundancy or liquidation of the employer – up to three months' average earnings;
  • termination due to the employee's refusal to be transferred to a new job as required according to a medical certificate – two weeks' average earnings;
  • an employee's refusal to accept new working conditions introduced by the employer – two weeks' average earnings;
  • recognition of the employee as being incapable of work as provided by a medical certificate – two weeks' average earnings; and
  • refusal of the employee to transfer to work in another locality together with the employer – two weeks' average earnings.

An employee can be dismissed for serious cause in the following cases:

  • repeated failure by the employee to perform employment duties without justifiable reason (ie, for an employee subject to a current disciplinary measure);
  • absenteeism (ie, absence from the workplace without a justifiable reason for four consecutive hours);
  • appearance at work under the influence of alcohol, narcotics or other intoxication;
  • disclosure by the employee of legally protected information;
  • the theft by an employee of property belonging to others, embezzlement or the wilful destruction or damage of property, duly established in a court judgment or a decree of the body duly authorised to impose administrative sanctions;
  • violation of labour safety requirements where such violation results in grave consequences (eg, an industrial accident, serious damage); and
  • groundless decision-taking by the head of an enterprise (branch office or representation), his or her deputies or chief accountant resulting in breach of the safe custody of property, misuse thereof or any other damage caused to property belonging to the enterprise, etc.

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:

  • pregnant women;
  • women with children under three years of age;
  • single mothers raising children under 14 years of age;
  • single mothers raising disabled children under 18 years of age;
  • parents (or other legal representatives) with three or more minor children (ie, under the age of 14), one of whom is under the age of three, when the other parent (or another legal representative) is not employed;
  • other employees raising motherless children under 14 years of age;
  • other employees raising motherless, disabled children under 18 years of age; and
  • parents (or other legal representatives) who are single breadwinners in a family with a disabled child under 18 years of age.

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 RUB15,000, 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. However, 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) can only be heard by a court.

The decision of a commission is obligatory as regard to 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.

Russian law also provides for a possibility of class actions. According to law, a person or organisation are 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:

  • there is a common respondent;
  • the subject in dispute is of general interest for all the members of the group;
  • there are similar factual circumstances which form the basis of the rights of the members of the group of persons and the obligations of the respondent; and
  • the group of persons wishes to use the same method to protect their rights.

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, and 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.

Baker & McKenzie – CIS, Limited

White Gardens, 10th Floor
9 Lesnaya Street
Moscow
Russia

+7 495 787 2700

+7 495 787 2701

moscow@bakermckenzie.com www.bakermckenzie.com
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Law and Practice

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Baker McKenzie has a labour and migration practice group that advises clients on all matters of labour and migration law, from preparing employment agreements to obtaining permissions to hire foreign employees and individual work permits to successfully representing clients in individual labour disputes. The firm has also been involved in collective labour disputes and negotiations with trade unions, which have become more common recently on the Russian labour market. The firm's Russian practice is comprised of 12 lawyers in Moscow and St Petersburg, all highly adept at understanding the challenges of personnel planning and labour negotiations.

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