Azerbaijani labour law is very protective of the employee and applies to all employees. Thus, in Azerbaijan, there is no legal distinction between blue- and white-collar workers. However, one semi-distinction shall be mentioned regarding the minimum 21 days’ annual paid leave rule: white-collar workers, which are understood to refer to employees who are usually involved in managerial or professional (specialist) work, are granted minimum 30 days’ annual paid leave.

Employees can be classified based on the nature and duration of the work performed as follows:

• fixed-term employees – hired for a specific period, with employment ending on a predetermined date;
• indefinite-term employees – hired for an indefinite period;
• part-time employees – employed on partial working day or partial working week by mutual agreement between the employee and the employer;
• full-time employees – perform their labour functions with weekly and daily working hours provided by the legislation;
• piece-rate employees – paid based on the amount of work performed;
• time-based employees – paid for specified labour relations within a specified time frame;
• probationary employees – employed on a trial basis for the purpose of determining their qualification for regular employment; and
• seasonal employees – work or perform services which are seasonal in nature, and the employment is for the duration of the season.

Fixed-Term Employment Contract

A fixed-term employment contract is defined as a contract that is concluded for a specific period of time. If this type of contract continues uninterrupted for more than five years, it is automatically deemed an indefinite employment contract.

The Labour Code establishes circumstances where fixed-term contracts may be concluded, such as for seasonal work and short-term work assignments, with the inclusion of “by mutual consent of the parties” indicating that these circumstances are not exhaustively limited. The Code also mandates fixed-term contracts in certain situations, particularly for positions involving high occupational health risks where the employer must inform the employee of the probable duration of potential occupational illness exposure.

Fixed-term employment contracts terminate automatically upon expiration of their stated term; however, if neither party provides written notice (whether on paper or through an electronic information system) of contract termination at least one week prior to the expiration date, the contract shall be automatically extended for the period originally specified in that contract.

Indefinite Term Employment Contract

Regarding indefinite term employment contracts, while the legislation does not provide extensive special regulation, it clearly establishes that if an employment contract does not specify the period for which it is concluded, it shall be considered concluded for an indefinite period. Importantly, an employment contract concluded without a specified term cannot be unilaterally replaced with a fixed-term employment contract without the mutual consent of both parties.

Employment Contracts With a Probation Period

Both indefinite and fixed-term employment contracts may include a probation period to assess the employee’s professional level and ability to perform the required labour function. For employment contracts concluded for up to six months, a probationary period of no more than two weeks shall be established. For all other employment contracts, a probationary period of no more than three months may be applied. The probationary period consists only of actual working hours during which the employee performs their labour function. Periods when the employee temporarily loses work capability or is absent from work while maintaining average salary are excluded from the probationary period calculation. Certain categories of employees are exempt from probation periods, including persons under 18 years of age and those who obtained their position through competitive selection processes.

Formal Requirements

According to recent legislative amendments, employment contracts shall generally be concluded in electronic document format. However, there is a specific exception for certain state body positions. Employment contracts regarding employees recruited to designated positions in state bodies must be concluded in written form on paper.

The legislation provides a model form of employment contract that may be utilised by mutual agreement of the parties, which is signed via e-signature tools by both parties. For employment relationships requiring written paper contracts in state bodies, the contract must be prepared in at least two copies. These contracts must be certified by the signatures and seals of both parties. One copy is retained by the employee and the other by the employer.

Mandatory Terms

The Labour Code requires employment contracts to include the following information:

• employee’s surname, first name, patronymic name, address, and personal identification number (PIN);
• when the employer is a state body (institution), legal entity or branch/representative office of a foreign legal entity – the name, position, surname, first name and patronymic name of the official exercising employer functions, taxpayer identification number (TIN), actual business address; when the employer is a natural person – surname, first name and patronymic name, TIN, actual business address, and PIN;
• address of the employee’s workplace, position (profession), with notation indicating whether it is a primary or additional workplace;
• date of conclusion of the employment contract and the date the employee must commence work;
• duration of the employment contract;
• employee’s labour function;
• employee’s working conditions – working time and rest periods, wages and supplements, duration of annual leave, occupational safety, mandatory state social insurance and other compulsory insurance coverage;
• mutual obligations of the parties under the employment contract;
• creation of conditions for the employee to engage in physical education and sports, including rehabilitation and professional-applied training during work hours and after work, as well as sports and health tourism;
• social insurance number (SSN) of the employee, except for employees whose contracts are concluded electronically, those recruited to designated state body positions approved by the relevant executive authority when starting work for the first time, and persons whose information is subject to confidentiality under the Law “On State Secrets”; and
• information regarding additional terms determined by the parties.

Working Time Limits

The regular working week in Azerbaijan is up to 40 hours, typically spread across eight hours per day over five days. The duration of the working time cannot be extended beyond this limit, except in specific cases outlined in the Labour Code. Under a six-day schedule, daily hours are capped at seven hours (40-hour week), six hours (36-hour week), or four hours (24-hour week). For each hour of work performed at night, the employee is paid an additional fee of 20% of their hourly rate (position) salary.

Reduced Working Time

Certain employee categories are entitled to reduced working hours based on age, health status, working conditions and job requirements. Weekly limits are:

• 24 hours maximum for employees under the age of 16; and
• 36 hours maximum for employees aged 16–18, those with 61–100% impairment of bodily functions, pregnant women, mothers with children under 18 months, and single parents of children under three years of age.

Employees in harmful working conditions are limited to work 36 hours weekly. Specific arrangements are established through collective agreements, if not concluded, employer–trade union consultations based on approved hazardous occupation lists. Similar 36-hour limits apply to high-stress positions involving mental strain, physical demands or health risks. When at least half of the daily working hours of these two types of employees fall at night, the part of the working hours falling at night shall be shortened by one hour.

The wages of employees working under reduced working hours is paid in full amounts determined for normal working hours.

Part-Time Work

Part-time work can be agreed upon by employer and employee either when signing the contract or during employment. On a mandatory basis, employers must grant part-time work when requested by pregnant women, employees with health conditions requiring reduced hours (per medical opinion), women with children under the age of 14 or disabled children, and those caring for chronically ill family members.

Part-time employees receive wages proportional to hours worked or output achieved. They maintain all standard employment rights and receive full annual leave entitlements. Working hours for mandatory cases are determined through employer–employee agreement, with pay calculated proportionally to time worked.

Shifts

Working in shifts – in two, three or four shifts – is introduced in cases when the duration of the production process exceeds the permissible length of working day, as well as for the purposes of more efficient use of equipment, or increase of the volume of produced output or rendered services. With the shift work arrangement, each of the groups of employees must undertake the work for a specified length of the working time according to the shift schedule. In this case, the employees’ work is established according to shift schedules, and working hours are usually distributed evenly over the weeks.

Partitioning a Working Day

In work where it appears necessary because of the specific nature of the work, as well as in work with varied intensity during the working day (shift), the working day may be split into parts so that the total length of working time does not exceed the fixed length of the permitted working day. Such partitioning shall be arranged by the employer.

Overtime

Overtime work requires both employer directive and employee consent, involving work beyond established daily hours. Employees in particularly hazardous sectors and other specified categories are exempt from overtime requirements. Overtime is authorised for emergency situations including natural disasters, industrial accidents, military situations, and preventing perishable goods loss, and other stipulated circumstances.

The general limit is four hours over two consecutive working days. In hazardous working conditions, limits are reduced to two hours per shift and two hours over two consecutive days. Time-based employees receive minimum double hourly rates. Piece-rate employees receive full piece-rate wages plus additional payment equivalent to qualified time-based hourly rates.

Employees under the age of 18 are prohibited from overtime work. Pregnant women and mothers with children under the age of 14 or disabled children may only work overtime with written consent.

Minimum Wage

The Labour Code provides that employees have the right to a minimum wage. According to the Presidential Decree dated 23 December 2024, the minimum monthly wage was set at AZN400 from 1 January 2025.

No government intervention takes place with respect to determining the procedure for and amount of compensation, pay increases, etc, apart from the minimum wage stipulation.

Reward

The 13th-month pay, commonly known as a “13th-month bonus”, constitutes an additional annual remuneration provided to employees, generally amounting to one month’s salary. This compensation is typically awarded at the conclusion of the calendar year or during the holiday season as an additional benefit.

While the legislation does not define a specific bonus such as the 13th-month bonus or performance bonus in a specified rate, it is understood that rewards that can be granted by the decision of the employers to employees who have distinguished themselves in performing their labour functions at a high level of professionalism and in compliance with internal disciplinary rules of the enterprise. Such rewards consist of money or valuables as a gift, additional leave, individual addition to the salary, higher personal insurance, the payment of the cost of sanatorium-resort treatment, and tourist trips.

Severance Pay

When an employment contract is terminated, the employee is paid a severance pay calculated by the employer based on various criteria depending on the grounds for termination.

Supplement

The legislation establishes additional wages for work performed on rest days, voting days, holidays that are not considered working days, and national mourning days, as well as for work performed overtime. For multi-shift work schedules, additional compensation is established at 20% of the employee’s hourly tariff (position) salary for each hour worked during the evening shift, and 40% for each hour worked during the night shift.

According to the Labour Code, there are four types of leave: vacation; social leave; educational and creative leave for continuing education and pursuing scientific research; and unpaid leave.

Vacation

Vacation consists of annual base vacation for employees and additional base vacation granted depending on the nature of production, working conditions, length of service, and family circumstances. Vacation may be taken either together or separately. Base vacation cannot be less than 20 calendar days and equals 30 calendar days for certain categories of employees, including agricultural workers, medical doctors and pharmacists.

Additional base vacation is granted on the basis of various criteria.

• Working conditions and labour function characteristics – Employees engaged in underground work or in hazardous or arduous occupations and those whose occupations involve increased sensitivity, excitement, or mental and physical stress shall be granted an additional base vacation no less than six calendar days.
• Length of service – Employees shall be eligible for the following amounts of additional vacation time:
1. seniority of five to ten years – two additional calendar days;
2. seniority of ten to fifteen years – four additional calendar days; and
3. seniority of over fifteen years – six additional calendar days.
• Women with children – Regardless of the amount of base and additional vacation time, working women with two children under the age of 14 shall be eligible for two additional calendar days of vacation time; while women with three or more children of this age or with a child with restricted health condition shall be eligible for five additional calendar days of vacation time. Fathers raising their children as single parents and adoptive parents will enjoy the same rights.
• Specialists working in the liberated territories of the Republic of Azerbaijan – These employees shall be granted additional leave for a period of five calendar days.

The regulation of overall vacation periods is sophisticated, as different professions have varying minimum calendar day requirements established according to occupational categories.

• Due to engagement in pedagogical and scientific activities, employees shall be granted either 42 or 56 calendar days depending on their specific division within these professional activities.
• Due to physiological characteristics, employees under the age of 16 shall be granted leave of no less than 42 calendar days, and employees from 16 to 18 years of age shall be granted leave of no less than 35 calendar days. Employees under the age of 18 with working disabilities, including those with limited health, regardless of the percentage, cause and duration of the impairment of body functions, shall be granted leave of no less than 42 calendar days.
• Due to special services before the people of Azerbaijan, employees who received injuries (injury, trauma, concussion) for the freedom, sovereignty and territorial integrity of the Republic of Azerbaijan, as well as state awards related to the defence of the sovereignty and territorial integrity of the Republic of Azerbaijan, shall be granted leave of no less than 46 calendar days.
• Due to the performance in theatre and other similar enterprises, artistic and artist staff of theatre and performance enterprises, television, radio and cinematographic institutions are granted labour leave for a period of 42 calendar days, and employees directly serving the stage are granted 35 calendar days.

Educational and Creative Leave

Educational and creative leave under the Labour Code provides paid leave for employees pursuing academic and scientific activities while maintaining employment. Creative leave includes up to two months for PhD dissertation completion, three months for DSc work, annual 30-day leave for doctoral students who also work, and up to three months for writing educational materials. Educational leave grants time off for students attending sessions, examinations, and thesis work, with durations ranging from 20 to 40 days for regular academic activities to four months for thesis preparation, depending on education level. Compensation during creative leave is based on regular salary, while educational leave uses average salary calculations.

Social Leave

Maternity and childcare leave under the Labour Code provides comprehensive support for working women and families. Standard maternity leave grants 126 calendar days of paid leave (70 days before birth, 56 days after), extended to 70 days post-birth for complicated deliveries or multiple births. Agricultural workers receive enhanced benefits with 140 days for normal births, 156 days for complicated deliveries, and 180 days for multiple births. Women who adopt children under two months old are entitled to the same 56-day post-birth social leave and additional benefits. Parents or family members caring for children may take partially paid social leave until the child reaches three years of age, with compensation determined by legislation.

Unpaid Leave

Unpaid leave under the Labour Code allows employees time off without pay for family, educational or personal reasons. It includes leave upon employee request for specific circumstances with set durations in a work year (ranging from seven days to one month, or until the person reaches certain age (caring for chronically sick children until they become four years old) depending on the situation, such as fathers during wives’ maternity leave, parents with young children, employees with disabilities, or doctoral students). Leave by mutual agreement between employer and employee cannot exceed six months.

Confidentiality and Non-Disparagement

An employee shall be held financially liable in full if they disclose the employer’s commercial secret; if they cause moral damage by discrediting the employer’s identity, degrading their honour and dignity, or by spreading untrue, slanderous, insulting slander or false information, seriously harming their entrepreneurial activity. This can be specifically regulated through a separate contract between the employer and the employee.

Employee’s Liability

Except for stipulated situations in the Labour Code, the employee is financially liable for the damage caused to the employer up to the amount of one month’s average salary. Whether directly when concluding an employment contract or in the process of employment relations, the employer may conclude a written agreement with employees who have reached the age of 18 who perform work or provide services directly related to the storage, processing, sale, transportation, use, and other operations of the property entrusted to them, stating that they bear full financial responsibility.

An employee shall not be liable for any damage caused to the employer by a natural disaster while performing their job duties. In addition to the actual damage caused by the employee’s action or inaction, the employee shall not be liable for any loss of income or profit that the employer may have received in the future.

Under Azerbaijani law, legislative references to non-competition are limited to provision within the sample employment contract contained in the Labour Code. This provision permits employees to undertake substitute work outside regular working hours or, subject to employer consent, during working hours at additional workplaces, provided such employment does not compete with the primary employer’s business interests.

Notwithstanding the limited statutory framework, employers routinely incorporate non-competition clauses into employment contracts or conclude separate non-competition agreements with their employees. The rationale is to safeguard business interests by restricting employees from participating in competitive activities both during the employment relationship and also following its termination. The clauses usually encompass:

• temporal limitations on the duration of restrictions;
• prohibited industries or business activities in which the employee may not engage; and
• restricted classes of persons including customers, clients or employees with whom the former employee is precluded from conducting business.

The moment an employer believes an employee has contravened relevant non-competition provisions, standard practice involves issuing a formal demand requiring immediate cessation of the violations and payment of compensation to the employer. Failure to comply with such demands may result in termination of the employment contract by the employer.

Similar to non-compete agreements, non-solicitation provisions prohibit former employees from contacting current clients, customers and suppliers. They serve to hinder employees from recruiting or attempting to recruit employees, service providers or management/supervisory personnel from the employer. It is typical for employers to conclude an agreement that includes both non-compete and non-solicitation clauses because of their shared characteristics.

From the legal interests perspective of employees, such non-solicit agreements or clauses may be considered as restrictive regarding right to employment, therefore leading to questions concerning their legal validity.

After the conclusion of an employment contract, the transfer of information about an employee’s labour activity to other persons is regulated by the laws of the Republic of Azerbaijan “On Personal Data”, and “On Access to Information”, with the exception of the transfer of general information on labour activity to the employer.

Accordingly, personal data transfer to third parties requires written consent from the data subject – in the employment context, the employee. This consent can be provided through written form or via the Electronic Government Information System. The exception covers exceptional cases like the employee’s death and similar situations. Employees can also withdraw their consent in the same way. Once withdrawal is communicated, the effect is immediate, requiring the employer and third parties to cease data transfers immediately. This creates an ongoing obligation for all parties to monitor consent status and respond promptly to withdrawal requests.

The legislation provides three specific categories where data transfers can occur without explicit consent.

• Open category personal data – This category includes information about the employee that has been anonymised in accordance with the established procedure, declared open by the employee, or entered into an information system created for general use with their consent. The name, surname and patronymic of an employee are considered open personal data. Confidentiality of such data is not required.
• Confidential personal data transfers to state bodies or local self-government authorities – This occurs when the transfer relates to the authorities’ assigned functions and duties. This framework requires that information systems handling such data comply with legislative requirements, ensuring appropriate security.
• Emergency situations – This comprises cases in which data transfer is necessary to protect life and health, but only when obtaining consent cannot be delayed. This humanitarian exception recognises that urgent medical or safety situations may not permit the normal consent process.

International transfers of tax and financial information under treaty-based arrangements cover financial operations data of foreign legal and natural persons operating in Azerbaijan, based on international agreements ratified by Azerbaijan. Such information can be transferred either directly or through competent executive authorities.

The regulatory framework for foreign employees in Azerbaijan can be divided into two groups.

Foreigners Requiring Work Permits

Generally, every able-bodied foreigner who has reached the age of 18 can work in Azerbaijan after obtaining a work permit. A work permit is an official document that allows foreigners to engage in paid labour activity in Azerbaijan. The issuance of this is carried out within the framework of the labour migration quota approved by the Cabinet of Ministers of the Republic of Azerbaijan. The labour migration quota is the maximum number of foreigners who are allowed to engage in paid labour activity in the territory of Azerbaijan during a calendar year.

The legislation establishes seven specific circumstances under which work permit applications must be denied:

• if the necessary documents are not submitted;
• if the submitted documents are forged, contain inaccurate or distorted information;
• if the employer’s demand for labour can be met from local labour resources;
• if the foreigner to be employed is not 18 years old;
• if the labour migration quota is full;
• if the foreigner is a carrier of infectious diseases; and
• when a foreigner does not have the qualifications or work experience required to perform the work to which they are assigned.

Foreigners Exempt From Work Permit Requirements

Legislation provides an extensive list of persons in this regard, including those who have a permanent residence permit in Azerbaijan; those engaged in entrepreneurial activity in Azerbaijan; and those working in diplomatic missions and consulates, in international organisations, etc.

The Cabinet of Ministers retains the authority to implement targeted restrictions on foreign labour migration in specific sectors or industries, taking into account the needs of the domestic labour market.

Overall, foreigners enjoy all labour rights on an equal basis with citizens of Azerbaijan and shall bear the duties corresponding to these rights. With the exception of cases stipulated by law, it is prohibited to restrict the labour rights of foreigners or to establish more favourable rights for them.

Legal entities, individuals engaged in entrepreneurial activities without forming a legal entity, and branches and representative offices of foreign legal entities obtain work permits for foreigners. Applications received for a work permit are considered within the period specified in the Law “On State Duty” in accordance with the amount of state duty paid.

To obtain a work permit, the employer must submit the following documents:

• application form;
• a copy of the passport or other border-crossing document of the foreigner;
• a notarised copy of the document confirming that the foreigner has the qualifications required to perform the intended work;
• a certificate justifying the necessity of involving the foreigner for the intended workplace;
• relating to the employer:
1. in the case of a legal entity – notarised copies of the charter of the legal entity and the certificate of state registration; or
2. in the case of an individual – notarised copies of the document confirming the identity of the individual and the certificate of taxpayer registration issued to the individual; and
• a certificate stating that the foreigner is not a carrier of a disease/virus.

A work permit is issued for a period of one year, and if it is intended to conclude an employment contract for a period of less than one year, then for the same period. The term of the work permit may be extended for no more than one year each time. The exception is in relation to those involved in labour activities in the liberated territories of Azerbaijan: the term of the work permit may be extended for no more than two years each time. In order to extend the term of the work permit, the employer must apply to the State Migration Service with an application at least 30 days before the expiration of the work permit. If the employer fails to pay the state fee for obtaining a work permit within 30 days, as well as if foreigners are refused permission to temporarily reside in Azerbaijan, the State Migration Service cancels the work permit.

Telework or mobile work is not regulated in Azerbaijan. However, there is ongoing work over the regulation of these regimes.

The initial initiative in the field of including the concept of remote work in the legislation is the Action Plan provided for in the “State Program for the Implementation of the National Strategy for the Development of the Information Society in the Republic of Azerbaijan for 2016–2020”. According to that programme, the Ministry of Labor and Social Protection of the Population and the Ministry of Transport, Communications and High Technologies were entrusted with studying world experience in remote work and preparing proposals on its application mechanisms. In a news release dated 2019, it was noted that the concepts of “Remote work – a form of performing labor functions at home using electronic, software and technical means” and “Telework – a form of performing labor functions at home using telecommunications means” would be included in the Labour Code.

The following year, during the expansive spread of the COVID-19 pandemic, in accordance with the decisions adopted by the Cabinet of Ministers, employers were obliged to ensure that employees who were not involved in work worked at home, as well as in the form of remote work or telework, whenever possible. At the beginning of 2022, the Ministry stated the need to adapt the legislation in this area to the requirements of the modern labour market. They also noted that they were working on a draft law on amendments to the Labour Code in this regard and that other articles of the Labour Code would be amended in accordance with the new concepts to be included.

Even though there is still no concrete legal norm regarding these issues, companies grant and organise such work regimes in a manner that they consider appropriate. In practice, they will incorporate provisions concerning mobile work into their employment contracts through mutual agreement with an employee.

The requirements for unpaid leaves are the most similar notion. As mentioned in 1.5 Other Employment Terms, an employee has the right to use unpaid leave in cases where it is necessary to leave work due to the fulfilment of family, household and other social issues, to study, to engage in creative scientific work, as well as due to age or physiological conditions.

Unpaid leave is granted at the request of employees or by mutual agreement of the parties. The maximum period of unpaid leave may not exceed six months.

At the employee’s request, unpaid leave shall be granted within a working year in the following cases and for the specified durations (selected situations):

• to one of the parents of a child diagnosed with a chronic illness (based on the opinion of a medical advisory commission), or to another family member directly responsible for the child’s care – until the child reaches the age of four;
• to male employees whose wives are on maternity leave – for up to 14 calendar days;
• to employees who sustained injuries (wounds, trauma or concussion) in the course of defending the territorial integrity and sovereignty of the Republic of Azerbaijan – for up to 14 calendar days;
• to parents raising a child living with the human immunodeficiency virus (HIV), as well as to parents of a child with a disability – for up to 14 calendar days; and
• to employees enrolled in doctoral (or adjunct) studies – for up to one calendar month.

There are some new developments in the employment sector in Azerbaijan, including the following.

Desk Sharing

Desk sharing has gained traction as companies seek to reduce office rental costs. In Azerbaijan, this practice lacks specific legal regulation and is typically absent from individual employment contracts. Instead, employers implement it as an organisational strategy.

Platform Workers

In recent years, job losses due to the Covid-19 pandemic and the entry of white-collar workers into freelance work have supported the growth of the gig economy. As a result, employees and employers have begun to prefer freelancing over office work, and many daily services have been accessed across platforms. The platform economy creates new business opportunities. However, the emergence of platform work reveals a number of its shortcomings, including frequent violations of the rights of platform workers, and their deprivation of labour rights regulated by labour legislation.

In order to prevent these violations, a number of legal and administrative measures have been envisaged within the framework of the Action Plan for the Prevention of Informal Employment in the Republic of Azerbaijan approved in 2017. In accordance with the Employment Strategy of the Republic of Azerbaijan for 2019–2030, the implementation of complex measures aimed at the prevention of informal employment has been set as a priority. Based on the 2020 Rules for Conducting and Coordinating Control Measures in the Field of Legalization of Informal Employment, monitoring will be carried out in accordance with the directions of action through the unified electronic information resource “Control over Informal Employment”, and responsibility measures will be taken in connection with the detected facts of informal employment. In this context, the List of information systems and resources that require integration into the relevant information resource has already been approved.

Trade unions may be established on a purely voluntary basis, without any discrimination among employees, without prior permission from the employer. Employees may join relevant trade unions and engage in trade union activities to protect their labour, social and economic rights and legitimate interests.

Status of Trade Unions

According to the legislation, a trade union can be divided as follows:

• local status – a trade union association that unites the primary organisations of trade unions of enterprises operating in one administrative territorial unit on a sectoral basis;
• territorial status – a trade union association that unites local trade unions operating in one administrative territorial unit;
• republican status – a trade union association that unites primary, local and territorial trade unions operating in sectors and separate sectors; and
• general republican status – a trade union association established by more than half of trade unions with republican status.

Role of Trade Unions

Roles can be classified on the basis of basic rights conferred upon trade unions.

• Participation in the creation of norms – Draft laws on labour, social and economic rights of employees are considered by discussing the opinion of trade unions. They may appeal legislative acts, decisions, and orders of state bodies that violate the interests of employees and their rights.
• Protection of labour rights – The release of employees in connection with the rationalisation of production is carried out by conducting negotiations with them on the protection of the rights and interests of employees.
• Monitoring compliance – They have the right to demand compliance by the employer with the legislation on labour and trade unions, as well as on social and economic issues, and the elimination of revealed violations.
• Labour protection – They participate in the implementation of control over the compliance by the employer with the legislation regulating the labour protection of employees at workplaces, compensation for damage due to industrial injuries, working conditions, and industrial sanitation standards.
• Conclusion of collective agreements and contracts – Collective negotiations and the conclusion of collective agreements are carried out based on the proposal of trade unions.
• Control over the standard of living of employees – Trade unions participate in the determination of amounts of compensation depending on the main criteria for the standard of living, in monitoring observance of the subsistence minimum, and in the timely increase in wage amounts depending on price increases.
• Consideration of labour disputes holding mass events – Trade unions resolve individual labour disputes between their members and employers within the scope of their powers. Additionally, in order to implement the goals and objectives of the charter, trade unions may organise and hold strikes, rallies and other mass events.

The representative bodies of employees are trade union organisations that operate on the basis of the charter and relevant legislation, voluntarily formed by employees to protect their labour, social and economic rights and legitimate interests. The fact that this body is a trade union organisation indicates that the roles envisaged in 6.1 Unions apply here as well.

A collective agreement is an agreement concluded in writing between an employer, labour collective or trade union organisation that regulates labour, socio-economic, domestic and other relations. The agreement applies to all employees of the enterprise, including persons hired after the collective agreement enters into force.

The Labour Code provides an extensive list of issues that are considered in the agreement, including:

• increasing the efficiency of the enterprise’s production;
• determining the rules and amounts of payments; and
• the mechanism for taking into account price increases and the level of inflation.

A collective agreement may be concluded for a period of one to three years. Except for cases of change of ownership of the enterprise or liquidation of the enterprise, organisational and structural changes in the enterprise, termination of the employment contract with the employer, as well as termination of the activities of the trade union organisation, do not lead to the loss of legal force of the agreement.

In the event of a change of ownership of the enterprise, the collective agreement shall remain in force for a period of three months. During this period, the parties shall commence negotiations with a view to concluding a new collective agreement or maintaining the previous one in force, and making additions and amendments to it.

An employment contract may be terminated only on the grounds and in the manner specified in the Labour Code. These grounds are as follows:

• initiative of one of the parties;
• expiration of the employment contract;
• change in the terms of employment;
• in connection with a change in the owner of the enterprise;
• circumstances beyond the control of the parties; and
• circumstances specified by the parties in the employment contract.

The legislation elaborates each of them, establishing various procedures. To prohibit the abuse of power, the Code specifies the grounds regarding termination on the basis of the employer’s initiative:

• when the enterprise is liquidated;
• when the number of employees or staff is reduced;
• when the competent authority makes a relevant decision that the employee is not suitable for the position they hold due to insufficient level of professionalism, qualification (profession);
• when the employee fails to fulfil their labour function or obligations under the employment contract, or grossly violates their labour duties;
• when the employee fails to prove their ability during the probationary period; and
• when an employee of an enterprise financed from the state budget reaches the working age.

The employer must justify the necessity of terminating the employment contract.

Redundancy

Priority of some employees in the case of redundancy

When reducing the number of employees or reducing staff, employees with a higher qualification (profession) and level of professionalism required for the performance of labour functions for certain positions are retained. The employer determines the level of professionalism of the employee, by taking into account the improvement of their professional training, acquisition of a new specialty and improvement of their qualification.

The employer gives priority to retaining the following persons in the case of the same qualifications (professions) or level of professionalism:

• members of the family of a martyr;
• participants in the war;
• wives (husbands) of soldiers and officers;
• those who have two or more children under the age of 16 in their care;
• persons who have become disabled as a result of an industrial accident or occupational disease at the same enterprise;
• persons who are considered to be internally displaced persons and persons with refugee status; and
• other persons provided for in collective agreements or employment contracts.

The law requires employers making redundancies to support certain groups. If an employee is an orphan or deprived of parental care and is laid off due to redundancy, the employer must cover the cost of necessary professional training to help them find a new job at the same or another enterprise.

The rest of the procedures relating to redundancy are set out in 7.2 Notice Periods.

Notice Period and Severance

In the event of a reduction in the number of employees or a reduction in their staff, before the employer terminates the employment contract, the employee must be officially notified by the employer within the following periods, depending on the length of service:

• for up to one year of service – at least two calendar weeks;
• for one to five years of service – at least four calendar weeks;
• for five to ten years of service – at least six calendar weeks; and
• for more than ten years of service – at least nine calendar weeks.

However, following these notice periods is not compulsory because the employer may terminate the contract in the event of a reduction in the number of employees or a reduction in their staff, with the consent of the employee, by paying:

• 0.5 times the average monthly wage instead of the notice period of at least two calendar weeks;
• 0.9 times the average monthly wage instead of the notice period of at least four calendar weeks;
• 1.4 times the average monthly wage instead of the notice period of at least six calendar weeks; and
• 2.0 times the average monthly wage instead of the notice period of at least nine calendar weeks.

In the case of redundancy, the employment contract of an employee who is a member of a trade union shall be terminated with the prior consent of the trade union operating at the enterprise.

When a contract is terminated due to the liquidation of an enterprise and a reduction in the number of employees or staff, the employee is paid a severance pay in the following amounts, depending on the length of service:

• for up to one year of service – in the amount of the average monthly wage;
• for one to five years of service – in the amount of at least 1.4 times the average monthly wage;
• for five to ten years of service – in the amount of at least 1.7 times the average monthly wage; and
• for more than ten years of service – in the amount of at least 2.0 times the average monthly wage.

In the event of termination of the employment contract in the case of change of labour conditions and when the employee is called up for military or alternative service, when the employee is unable to perform their job function due to complete loss of working capacity for a continuous period of more than six months, the employer shall pay the employee a benefit in the amount of at least twice the average monthly wage. In the event of termination of the employment contract in connection with the death of the employee, the heirs of the deceased shall be paid a benefit in the amount of at least three times the average monthly wage. In the event of termination of the employment contract in connection with a change in the owner of the enterprise, the employer shall pay the employee a benefit in the amount of at least three times the average monthly wage.

Failure of the employee to fulfil their labour function or obligations under the employment contract, or gross violation of labour duties, serves as one of the grounds for termination of the contract. The Labour Code reflects the situations that fall under “gross violation” as:

• failure to appear at work for the entire working day without any valid reason, except for their own illness, or the illness or death of a close relative;
• coming to work in a state of intoxication after consuming alcoholic beverages, narcotic drugs and psychotropic, toxic and other poisonous substances, as well as being in a state of intoxication after consuming these beverages or substances at the workplace after coming to work;
• causing material damage to the owner as a result of the employee’s guilty actions (inaction);
• causing injury to the health of colleagues or their death as a result of the employee’s guilty actions (inaction);
• intentionally disclosing a production, commercial or state secret or failing to fulfil their obligation to keep this secret confidential;
• serious harm to the legitimate interests of the employer, enterprise or owner as a result of gross errors and violations of law committed during labour activity;
• repeatedly violating labour functions within six months without drawing any conclusions from the disciplinary punishment previously imposed by the employer for violating labour functions; and
• committing administrative offences or socially dangerous acts constituting a crime directly at the workplace during working hours.

Termination of an employment contract on these grounds is permitted provided that the employee intentionally or negligently or carelessly fails to perform their labour function or duty (obligations), resulting in a disruption of the normal harmony of work, production, labour and performance discipline at the relevant workplace, or in any way causing damage to the rights and legally protected interests of the owner, employer, as well as the labour collective (its individual members).

An employee who is a member of a trade union may only be dismissed for serious cause with the prior consent of the trade union operating at the enterprise. To initiate this process, the employer must submit a written, justified request to the trade union. The trade union organisation is then required to provide a written, reasoned decision within ten days of receiving the employer’s request.

In order to ensure more complete regulation of labour relations in the future, the legislation enshrines that the parties must include in the employment contract the circumstances that correspond to the employee’s working conditions. The following additional circumstances may be provided for regarding termination:

• mutual agreement of the parties;
• according to the relevant opinion of a medical institution that the employee’s work in the relevant position (profession) is dangerous for the employee’s health due to their health condition;
• in the event of a high probability of contracting an occupational disease at the relevant workplace during the performance of the labour function for a certain period of time;
• when the employer undertakes an obligation in writing (on paper or through an electronic information system) to conclude a new employment contract with the employee after a certain period of time due to a decrease in the volume of work or services provided; and
• other circumstances determined by the parties in compliance with the requirements of this norm.

Accordingly, where specified by the employment agreement as an additional circumstance of termination, mutual termination agreement of the parties is acceptable.

The legislation stipulates that such circumstances envisaged by the parties shall not contradict the principles of ensuring the rights of the employee and the employer established by the principles of the Labour Code, and they cannot degrade the parties’ honour and dignity by attempting to restrict their rights.

In any case, such termination must be formalised with a reasoned order (disposal, decision) of the employer. When employment contracts concluded in the form of an electronic document are terminated, the employer’s order (disposal, decision) to this effect is signed with an enhanced electronic signature in the electronic information system and placed in the employee’s electronic cabinet created in the information system.

Except in the event of liquidation of an enterprise and the termination of a fixed-term employment contract, in the following cases, the termination of employment contracts by the employer on its own initiative is prohibited:

• pregnant women, as well as women with children under the age of three, and men raising children under the age of three alone;
• employees who are the sole source of income and are raising children under the age of school age alone;
• employees who have temporarily lost their ability to work;
• due to the fact that the employee is suffering from diabetes or multiple sclerosis;
• due to the fact that the employee is a member of a trade union or any political party;
• employees who have a disabled child or another family member who has been determined to be disabled due to 81–100% impairment of body functions; and
• while on vacation, on a business trip, as well as during the period of participation in collective negotiations.

Grounds for a Wrongful Dismissal Claim

According to the Labour Code, an employee can apply to the court if the employer terminates the labour relationship with the employee by violating the provisions of the Labour Code in the following ways.

• By violating the grounds for termination of the employment contract, such as:
1. grounds stipulated in 7.1 Grounds for Termination;
2. the procedure for termination of an employment contract by an employee;
3. the procedure for terminating a fixed-term employment contract;
4. the grounds for terminating an employment contract in cases beyond the parties’ control;
5. the rules for regulating its termination in cases provided for in the employment contract.
• Without complying with the requirements of the rules regarding measures taken when an employment contract is terminated by the employer and regarding conditions limiting the termination of an employment contract.
• Without paying attention to the employees and circumstances in which termination of an employment contract is prohibited, as stipulated in 7.5 Protected Categories of Employee.

Consequences of Claim

Before applying to court regarding individual labour disputes, participation in an initial mediation session is required. When an employment dispute eventually reaches the court, the judge will review the case’s facts and the statement of claim and then take one of the following actions.

• To render a judgment ordering the employee’s reinstatement to their former position with payment of wages for the mandatory period of absence. The court may also provide in its judgment that the employer compensates the employee for the amount of damages claimed. The amount of damages includes:
1. the employee’s average salary for the period of non-employment resulting from the dismissal;
2. costs incurred for retaining legal advocate to defend the employee’s rights in court;
3. moral damages claimed in the statement of claim;
4. expenses arising from borrowing funds or selling personal property due to unemployment; and
5. any other related costs.
• To issue a writ approving the parties’ settlement agreement. If, during the court proceedings on an individual employment dispute, the employer and the employee enter into a written settlement agreement by mutual consent, the judge shall issue an order to enforce the obligations set forth in that agreement.

Azerbaijan has ratified International Labour Organization Convention No 111 of 1958 on Discrimination in Respect of Employment and Occupation. Thus, discrimination regulated in this Convention is sufficient grounds for an anti-discrimination claim. The Labour Code furthermore specifies and expands such grounds, prohibiting:

• discrimination on the basis of citizenship, gender, race, religion, nationality, language, place of residence, property status, socio-economic origin, age, family status, beliefs, political views, membership in trade unions or other public associations, service position, as well as other factors not related to the employee’s business qualities, professional competence, and the results of their labour;
• refusal to hire, promote or dismiss persons living with the human immunodeficiency virus due to their infection with the human immunodeficiency virus, except for professions and positions in which employment is not allowed;
• refusal to conclude an employment contract or terminate an employment contract on the grounds that a person has multiple sclerosis, except for cases where the employer does not have a relevant job (position), as well as refusal to employ such persons in workplaces where the use of their labour is not allowed;
• refusal to conclude an employment contract, refusal to promote the employee at work, termination of an employment contract, and transfer to another job (profession, position) without the employee’s consent due to their disability, except for cases where the health of a person with a disability prevents them from performing their professional duties or poses a threat to the health and labour safety of other persons; and
• reducing the salary of employees in any way and paying them less than the minimum wage set by the state, in violation of the principles of non-discrimination.

Since each party is under obligation to prove their claim with legal grounds, the employee bears the burden of proof for a discriminatory behaviour by the employer.

An employee who has been discriminated against may apply to court with a request to restore their violated right. This implies that the relief will consist of the approval of the grounds on which the employee was discriminated against, namely being appointed to the position they applied for, concluding the employment they were denied.

All civil cases, including labour disputes, are handled electronically through the “Electronic Court” information system. In courts where this system is applied, court proceedings on labour disputes, including sending and receiving applications, complaints and other documents, as well as delivering court documents to the participants, are carried out through an electronic cabinet created in the “Electronic Court” information system. The system uses an enhanced electronic signature and certified electronic signature tools for electronic document circulation.

Participation of the Parties by Videoconference

For the conduct of court proceedings using a videoconference connection system, the court shall issue a writ on its own initiative or based on a reasoned motion of the parties. The grounds for using a videoconference without the direct participation of the person participating in the case, their representative (legal representative), lawyer, witness, expert, specialist, and translator in the courtroom are:

• the impossibility to personally attend the court session due to a valid reason;
• inability to personally participate in the court session due to detention in places of deprivation of liberty or prison;
• inability to directly participate as a result of natural or man-made disasters, epidemics, emergencies, martial law or force majeure; and
• other cases in order to prevent unnecessary prolongation of court proceedings.

According to the Civil Procedural Code, the technical means used must ensure the quality of sound and image and their real-time transmission to the courtroom, the transparency of the proceedings and compliance with other fundamental principles and conditions, as well as information security. Such court hearings and procedural actions must be videotaped, and a relevant protocol must be drawn up in accordance with the videotape, and the videotape must be attached to the case file on an electronic medium.

Specialised Employment Forums

While there are no specialised courts to deal with labour disputes, the Labour Code regulates special ways for the resolution of collective labour disputes (unlike individual labour disputes). The subject matter of collective labour disputes covers issues relating to collective bargaining agreements and interests of collective members. Parties are employers, employees (labour collective or its part) or trade unions. Resolution through court proceedings of such disputes is not stipulated. However, the following conciliation methods are used.

• Conciliation commission – Established within three working days from the date of the dispute and formalised by the relevant order (disposal, decision) of the employer and decision of the employees’ representatives.
• Intermediary – Determined by mutual agreement of the parties from among highly qualified and influential individuals who have no interest in the outcome of the dispute.
• Labour arbitration – Temporary body established by a joint decision of the parties no later than five working days from the date of agreement to refer the collective labour dispute to labour arbitration. The binding force of the final award of the arbitration can be predetermined by the parties.

Class Action Claims

Azerbaijani law does not provide for class action claims; but, as the law stands, the court may already decide to order the joinder of separately filed claims.

Representation in Courts

The law allows individuals with the necessary legal capacity to personally handle their lawsuits. Any employee may file a claim with the court through a representative. The representative can be the employee’s close relative or an attorney whose authority is duly formalised.

As evident, hiring an attorney is not compulsory, but there are exceptions: in cassation and additional cassation proceedings, as well as when a judicial act is reviewed in newly opened cases, the employee shall participate in court sessions only together with a lawyer.

According to the recently adopted Law “On Arbitration”, labour disputes cannot be resolved in arbitration. However, as indicated in 9.1 Litigation, parties to collective labour disputes may agree to solve their issue in labour arbitration in accordance with the Labour Code, which differs fundamentally from the arbitration defined in that Law. Unlike standard arbitration stipulated in the Law, which involves dispute resolution by an arbitration court issuing legally binding decisions, labour arbitration for collective disputes operates through a temporarily established body rather than a formal court process.

The parties may agree in advance on the binding nature of the decisions of the labour arbitration. The term for consideration of the disputes shall not exceed seven business days. The decision of the labour arbitration shall be adopted by a majority vote and shall be formalised in a protocol.

If the parties have agreed in advance on the binding nature of the decisions, the dispute shall be considered definitively resolved by the arbitration decision and the continuation of the dispute shall not be allowed.

To reiterate, individual labour disputes may not be heard in arbitration under the Law “On Arbitration”. However, collective arbitration disputes may be decided by arbitration method enshrined in the Labour Code. No practice of such collective employment dispute arbitration exists.

In accordance with the general rule, the court decides to award the party in whose favour the judgment is rendered a reasonable amount for the costs of assistance provided by an advocate, taking into account the specific circumstances and the information presented, to be recovered from the other party. In cases where the mandatory participation of a lawyer is required, if the persons participating in the case do not have sufficient funds to pay for the advocate’s services, the court, upon the written application of the persons participating in the case, shall ensure the participation of the advocate at the expense of the state.