Employment 2021

Last Updated September 07, 2021

Russia

Law and Practice

Authors



Baker McKenzie has a labour and migration practice group that advises clients on all matters having to do with labour and migration law, from preparing employment agreements to obtaining permissions to hire foreign employees and individual work permits, as well as 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.

Remote Work

As of 1 January 2021, new rules on remote work have come into force in Russia. The new rules define the types of remote work, including permanent, temporary and periodic remote work. The new rules introduce the possibility of fully electronic document flow in relations with remote employees. The law has also specified new additional statutory grounds for the employment termination of remote employees (ie, when a remote employee does not communicate with the employer for more than two consecutive days or when a permanent remote employee changes the place of their residence and such change makes it impossible to continue employment relations). It is no longer possible to terminate remote employees based on any additional contractual grounds for termination included in their employment agreements.

Parental Leave

As of 20 March 2021, employees with three or more children under the age of 18 should be granted annual paid leave at their request at a time convenient for them (until the youngest child reaches the age of 14).

State Control

As of 1 July 2021, the rules on state control (supervisory) measures have changed. The law changes the concept of state control: it aims to increase the level of protection of the rights of companies, as well as reduce the intensity of control and supervisory measures. The law has also changed the terms and content of control measures. Moreover, there are new rules on appealing the prescriptions/decisions of a state authority body: employers must first submit a complaint against the prescription/decision of the state labour inspectorate to the head of the territorial body of the state labour inspectorate, and only after that is it possible to appeal it in court. 

Visas and Entry Requirements

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 and ordinary private visas issued by the decision of the Ministry of Foreign Affairs;
  • ship and railroad crews;
  • individuals permanently residing in the Russian Federation (Russian nationals with internal IDs and foreigners holding permanent residency permits);
  • 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);
  • individuals entering the Russian Federation in connection with the death of a close relative, subject to the presentation of a copy of the death certificate and a document confirming the relation degree;
  • foreign athletes and coaches;
  • foreign nationals arriving in Russia for the purpose of receiving medical assistance;
  • foreign nationals arriving in Russia for the purposes of education; and
  • citizens of countries to whom Russia has specifically granted entry permission, these include the UK, Switzerland, Turkey, Tanzania, the USA, Italy, Belgium, China, Japan and some others.

The restrictions on entering Russia have been lifted for foreign nationals having the status of "highly qualified foreign specialists" if their entrance is approved by the Russian authorities.

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 2020 can apply for a work permit with any type of visa as well as apply for patents for work irrespective of the purpose of their entry to Russia, and the term of already-issued work permits and patents for work that expired during the period from 15 March 2020 to 15 June 2021 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.

As of 16 June 2021, until the expiration of 90 days from the date of the removal of the temporary restrictions imposed by Russia on transport links with a foreign country, the validity period of a visa, a migration card with marks, etc, issued to foreign nationals, is suspended.

In addition, state authorities are not taking 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 until 30 September 2021 inclusive.

Obligations on Employers

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 do the following.

  • 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; and
    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 (this requirement has already been lifted in Moscow).
  • 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.

Currently, employers operating in Moscow are recommended to transfer at least 30% of employees to remote working, including citizens over 65 years old and citizens with established diseases. 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 working arrangements.

Certain employers in Moscow and in the Moscow region are required to ensure that at least 60% of their workforce (employees and contractors) is vaccinated. The requirement applies to companies operating in the areas of trade, catering, education, health care services, leisure and entertainment activities, etc.

Employers must ensure that 60% of their employees are vaccinated by 15 July 2021 (with a single-component vaccine or with the first component of a two-component vaccine) and by 15 August 2021 (with the second component of a two-component vaccine).

Similar measures have been introduced in many other regions of Russia, although deadlines and terms may vary.

In addition, employers have to strengthen communication with employees about the prevention of new infections and the need for vaccinations.

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 be terminated under two additional statutory grounds: (i) if during the period of performing the employment function remotely, the remote employee does not interact with the employer for more than two consecutive working days; or (ii) if the remote employee changes the location of the job, if this entails the inability to fulfill their job duties on the agreed terms 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 a 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 accorded to 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 an employer to not increase the amount of base salary where these additional payments have been made.

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

Time Off Work

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 they have 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 for the first three days of each temporary sickness period is paid by the employer, while the remaining days are paid directly by the Russian State Social Insurance Fund.

Parental leave

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 RUB2,434.25. 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 2021 it is limited to RUB29,600.48 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 they are not required to) establish it at their 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 their 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 their 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 their 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, their 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 need to be set before the employment commences or they 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. Furthermore, 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 them the compensation, the courts may grant compensation if the employee can prove compliance with the relevant limitations. However, a court may also declare such an 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 their 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 they comply with it and if there is contractual compensation provided for compliance, an employer will most likely have to pay it. As stated in 3.1 Non-competition Clauses, 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 their 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 an employer to transfer data (eg, when the data is transferred to the Pension Fund of the Russian Federation or the tax authorities, or in other cases prescribed by law).

In addition, according to the Russian Labour Code, when processing 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 their 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.

Data Localisation Requirements

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 that 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 their 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 customer relationship management (CRM) systems do not have Russian databases and companies have to use local intermediary IT solutions or find other workarounds.

Russian immigration legislation does not generally 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 2021 there were restrictions on the number of foreign employees for companies whose principal business included the cultivation of vegetables, forestry and logging, 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 they are 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 their employment status.

Currently, foreign workers are required to undergo mandatory fingerprinting registration, photographing and subsequent biometric identification, as well as a medical examination. This rule applies for foreign nationals who have arrived from countries enjoying a visa-free regime with Russia and who are on the territory of Russia for a period exceeding 90 days in total during a calendar year.

Certain categories of foreign nationals are exempted from undergoing these procedures, including those who are incapacitated or disabled, under the age of 18, men who have reached the age of 65, and women who have reached the age of 60.

The duration of the temporary stay of a foreign worker is determined by the length of the employment agreement or civil contract concluded with the employer or consumer of work (services), and it may be extended for the duration of its validity.

However, if such agreements/contracts are concluded for an indefinite period, the duration of temporary stay in Russia may be extended for up to one year from the date of entry. It can be repeatedly extended but not by more than one year for each such extension.

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, their 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 response to situations of conflict with their 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.

Redundancies

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.

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 the case of staff redundancy or liquidation of the employer – up to three months' average earnings;
  • in the case of 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;
  • in the case of an employee's refusal to accept new working conditions introduced by the employer – two weeks' average earnings;
  • in the case of recognition of the employee as being incapable of work as provided by a medical certificate – two weeks' average earnings; and
  • in the case of the 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), their 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 their 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 their 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, they 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 they are 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 their 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 they believe that their 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 they request 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 their 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 their base salary, bonuses and commissions paid to them 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 they believe that the employer has treated them 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 their 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 them 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

White Gardens, 10th Floor
9 Lesnaya Street
Moscow
Russia

+7 495 787 2700

+7 495 787 2701

moscow@bakermckenzie.com www.bakermckenzie.com
Author Business Card

Trends and Developments


Authors



Baker McKenzie has a labour and migration practice group that advises clients on all matters having to do with labour and migration law, from preparing employment agreements to obtaining permissions to hire foreign employees and individual work permits, as well as 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.

Measures to Prevent COVID-19 Dissemination

Although only certain categories of employers are currently required to ensure the vaccination of not less than 60% of their workers, other employers are strongly recommended by the authorities to organise vaccination campaigns among their workforces.

In particular, authorities recommend that employers:

  • disseminate information officially posted on the websites of state authorities on the current epidemiological situation in the region regarding COVID-19
  • publicise the effectiveness of vaccination against COVID-19 carried out in order to reduce the risk of infection and prevent the development of severe forms of the disease;
  • use the positive personal experience of vaccinated employees (with their consent);
  • bring information about the vaccines used in the Russian Federation, and about stationary and mobile vaccination points to the attention of employees; and
  • provide additional time (days off) to employees for vaccination (at the discretion of the employer).

In a recent clarification, the state authorities recommend that employers ensure a collective immunity level of 80% from the full list of their employees, taking into account those who have had COVID-19 and were vaccinated (no more than six months ago). In accordance with recent recommendations of the Ministry of Labour of Russia and Russian sanitary authorities, an employee who has been vaccinated should submit information about that vaccination to the HR department of the employer. Vaccination/non-vaccination data refers to personal data and cannot be shared with any third parties (except for the relevant authorities to which employers are required to report the number of vaccinated employees) without the employee's consent.

Moreover, Russian authorities have stated that those employers who are required by law to ensure that at least 60% of their workers are vaccinated, are allowed to suspend unvaccinated employees from work without any payment (this applies to those employees who refuse to vaccinate without valid reasons and do not have contraindications to vaccination). Alternatively, the employer may offer that employee a transfer to remote work (from home), if applicable.

Proposed Amendments to the Russian Labour Code and Other Employment Laws

Electronic HR documentation

The State Duma (Russian parliament) is reviewing a draft bill under which particular employment documents can be submitted to or acknowledged by regular (non-distant) employees electronically. Currently, the Russian Labour Code provides that employers can only use electronic documents for HR purposes where the employees involved are working remotely. According to the proposed amendments, employers and employees will be able to exchange HR documents in electronic form in all cases when a written document is required under labour legislation, including those cases where employees must be familiarised with documents against "wet signatures" (exceptions are provided for by the Russian Labour Code). In addition, it will be possible to fix the procedure for exchanging electronic HR documents in employment agreements and local policies.

Extension of fixed-term employment agreements

Currently, fixed-term employment agreements cannot be extended even if both parties agree on their extension for a new period. Exceptions to this rule provided by the Russian Labour Code include some specific cases, for example, if a fixed-term employment agreement expires when an employee is pregnant.

Therefore, in the majority of cases, upon the expiry of a fixed-term employment agreement, an employee should be formally terminated and an employer is required to ensure full settlement with them (ie, pay outstanding salary, compensation for unused vacation days, and any other sums due to the employee). If the parties wish to continue employment relations, a new employment agreement for a new term is to be concluded.

The Ministry of Labour of Russian recently proposed to allow employers to extend the term of employment agreements. To do this, the employer will need to comply with the following requirements:

  • the employment agreement can be renewed once based on an additional agreement (addendum to the employment agreement) concluded with the employee;
  • the change of the terms of the employment should be set before the expiration of the employment agreement;
  • the total term of a fixed-term employment agreement (including the initial one) must not exceed five years; and
  • the basis for entering into a fixed-term employment agreement should be the same as for the initial fixed-term employment agreement.

Termination of employment of an employee covering a childcare leave position

The Russian Ministry of Labour proposes to resolve a situation when an employee unexpectedly interrupts their allotted period of childcare leave and returns to work before the end of that period. In these situations, employers need to dismiss the employee covering the childcare leave under a fixed-term agreement.

According to the proposed amendments to the Russian Labour Code, the employee will be obliged to notify, in writing, their return from childcare leave no less than five working days in advance. The employer will need to notify the temporary, covering employee in writing of their forthcoming employment termination due to the expiry of the term of a fixed-term employment agreement at least three working days in advance. As a result, the employer will have at least two working days to make the necessary HR decisions, prepare required HR documents and ensure full settlement with the covering employee.

Presently, an employee taking maternity or paternity leave is not obliged to file a notification in advance of their return to work and the formal procedure of terminating the employment of the covering employee has to be carried out within one day.

Changing the terms of the imposition of a disciplinary sanction

There is a proposal regarding the period during which an employer may impose a disciplinary sanction on an employee. Currently, a disciplinary sanction may be imposed no later than one month from the day the employee's misconduct is discovered by their supervisor or peer employee, not counting any time taken up by the employee's sick leave, their vacation and the time required to take into account the opinion of the employee's representative body (ie, the primary trade union if one exists at the company).

According to the recent proposal, this provision of the Russian Labour Code should be supplemented with other time periods that are not currently included in the one-month period for imposing disciplinary sanctions. For example, those periods should include the periods when an employee is absent but a job (position) is reserved for them. Such periods can include, for example, business trips, days when employees are donating blood, days off provided to them because they have worked on weekends and holidays, and days when they are undergoing medical examination.

Mandatory placement by employers of vacant positions on the "Work in Russia" portal

According to proposed amendments to the Law of the Russian Federation "On Employment of the Population in the Russian Federation", employers are to be required to post information on all available vacant positions on the "Work in Russia" web portal. This obligation will apply to those employers who, on average, employed more than 25 people in the previous year. Through the portal, employers may be allowed to report the hiring of a job seeker from the state employment service or a refusal to do so.

Recent Trends in Court Practice

Nowadays, there is a trend in court practice favouring enhanced protection of the interests of employees. More and more cases are decided in favour of employees, not employers. There are an increasing number of cases in which employees are reinstated, particularly upon dismissal on disciplinary grounds and in connection with staff redundancy.

Dismissal on disciplinary grounds

When considering the legality of dismissal on disciplinary grounds, the courts most often pay attention to the following issues:

  • the severity of the misconduct committed;
  • the circumstances under which the misconduct was committed;
  • the employee's previous behaviour and attitude to work; and
  • whether the employee was subject to disciplinary sanctions before the employer's claims arose.

In addition, employers must justify why a less severe sanction (warning or reprimand) cannot be applied to the employee and why they deserve to be dismissed. When applying a sanction in the form of dismissal, the employer must prove that the sanction is in accordance with general principles of liability such as fairness, proportionality and humanism.

Courts also require dismissal orders to be detailed and well-founded. In particular, they should indicate:

  • the misconduct for which the employee was punished;
  • the circumstances of the misconduct;
  • the period for which the misconduct was committed; and
  • any documents that served as the basis for applying a sanction.

Moreover, more and more courts of all levels, including the Supreme Court of the Russian Federation, are establishing abuse of rights by employers. Situations when the employer did not issue the documents required by law, did not formalise leave in accordance with the law at the request of the employee, and approached the issues of labour relations too formally are recognised as abuses of rights by the employer and will lead to the rights of employees being restored by the courts. Previously, cases in which an abuse of a right by an employer was recognised were extremely rare.

Staff redundancy procedure

Through their decisions, the courts are also changing the staff redundancy procedure provided by the Russian Labour Code.

In particular, the following new rules related to staff redundancy are being introduced.

Employers are required to offer their employees all vacant positions available in the company within the notice period (while the Russian Labour Code requires that only vacant positions for which the employee has enough qualifications (education, work experience, etc) be offered).

If there are several employees notified of a staff redundancy, and only one vacant position, the employer must offer this position to all employees notified of the staff redundancy and then evaluate their right to occupy this position (based on their qualification, work experience, etc). Previously, employers were allowed to offer the position to any employee at the employer's discretion.

Compensation for moral harm to an employee

According to recent amendments to the Russian Labour Code, an employee or a former employee may file a claim with the courts for compensation for moral damage caused to them as a result of a violation of their labour rights; either simultaneously with the claim for the restoration of the violated labour rights, or within three months after the entry into force of the court decision by which those rights were restored in full or in part.

Baker McKenzie

White Gardens, 10th Floor
9 Lesnaya Street
Moscow
Russia

+7 495 787 2700

+7 495 787 2701

moscow@bakermckenzie.com www.bakermckenzie.com
Author Business Card

Law and Practice

Authors



Baker McKenzie has a labour and migration practice group that advises clients on all matters having to do with labour and migration law, from preparing employment agreements to obtaining permissions to hire foreign employees and individual work permits, as well as 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.

Trends and Development

Authors



Baker McKenzie has a labour and migration practice group that advises clients on all matters having to do with labour and migration law, from preparing employment agreements to obtaining permissions to hire foreign employees and individual work permits, as well as 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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