Yust Law Firm

1

GENERAL PRINCIPLES

Forums For Adjudicating Employment Disputes

Individual employment disputes are to be resolved by in-house employment disputes commissions (EDCs) and by the courts of general jurisdiction in the Russian Federation. However, in practice employees do not use EDCs that often. They typically prefer to rely on courts.

Representatives of employers and employees form such EDCs on a parity basis. Such EDCs may consider all types of individual employment disputes except for disputes which may be adjudicated by courts only, such as –

  • unfair dismissal claims and claims for losses caused by unfair dismissal;
  • disputes connected with transfer of employees;
  • disputes connected with an employer’s illegal actions (inaction) while processing and protecting the personal data of the employee;
  • disputes connected with unfair refusal to hire and discrimination disputes; and
  • employers’ claims for damages caused by employees.

Resolution of a dispute by an EDC does not prevent subsequent judicial consideration of the same dispute. Importantly, a court of justice does not act as appellate instance for an EDC, it simply hears the case anew.

Collective employment disputes are resolved as follows –

  • it always starts in an in-house conciliation commission with employers and employees acting on a parity basis (this is a mandatory stage);
  • the parties may invite an independent mediator (this stage is optional); and
  • if the dispute has not been resolved by the in-house conciliation commission or by the independent mediator, it will be submitted to labour arbitration. This arbitration includes representatives of the employers and employees and also of a special state authority for the resolution of collective labour disputes.

The Main Sources Of Employment Law

The Russian Federation is a continental law country. The main sources of employment law are the follows:

  • International treaties, for instance, International Labour Organisation conventions ratified by Russia;
  • Constitution of the Russian Federation;
  • the Labour Code of the Russian Federation;
  • Federal laws concerning separate issues of employment law, such as: Federal Law of 27 July 2004 No. 79-FZ On State Civil Service in the Russian Federation (as amended); Federal Law of 12 January 1996 No. 10-FZ On Trade Unions (as amended); Law of 19 April 1991 No. 1032-1 On Employment in the Russian Federation (as amended); Federal Law of 28 December 2013 No. 426-FZ On Special Working Conditions Assessment;
  • Decrees issued by the President of the Russian Federation; and
  • Resolutions issued by the Government of the Russian Federation.

Regions of the Russian Federation and municipalities are able to pass their own regulations. These may only further improve the position of employees under the federal regulations.

Certain commentators and legal doctrine from time to time additionally consider collective agreements between employees of a particular employer and such employer itself, labour related agreements between representatives of employees and employers at the federal, intra-regional, regional and sectoral (intra-sectoral) levels, as well as local labour related internal acts of a particular employer as sources of employment law.

Since Russia is a continental law country, court rulings do not become precedents. However, the resolutions of Plenum of the Supreme Court of the Russian Federation are binding for the courts of lower instances when they consider employment disputes.


National Law And Employees Working For Foreign Companies

Employment relations of employees working for companies with foreign investments, representative offices and branches of foreign companies doing business in the territory of the Russian Federation, are governed by Russian law.


National Law And Employees Of National Companies Working In Another Jurisdiction

Russian employment legislation applies to all employers and employees within the territory of the Russian Federation. Russian employment legislation does not necessarily apply to employment relations of Russian nationals abroad. In this case the relations are governed by the legislation of the country of employment.

Besides, the Labour Code of the Russian Federation provides for the following cases when its provisions apply to the Russian employees who work abroad –

  • an employee is on a business trip abroad; and
  • an employee works at a diplomatic or consular mission of the Russian Federation as well as at representative offices of federal authorities and state institutions of the Russian Federation abroad.

Data privacy

The employer is obliged to ensure the data privacy of its employees. For these purposes, the employer should approve the internal act on the processing of personal data. A person who has violated the data privacy may be held legally liable. So, the Labour Code of the Russian Federation provides for a special ground for dismissal if the employee disclosed personal data to third parties.

2

HIRING THE EMPLOYEE

Legal Requirements As To The Form Of Agreement

An employment agreement must be made in writing. At the same time, if the employee was actually admitted working with the knowledge or on behalf of the employer or his authorised representative, and the employment agreement was not properly executed, then an employment relationship arises between the employee and the employer. However, if the employee starts working without a written agreement but with the knowledge of the employer, the agreement shall be deemed to have been entered into on the first day of employment. Failure to enter into such agreement does not affect its validity but may result in an employer`s administrative liability.


Mandatory Requirements
  • Trial Period

    • An employment agreement may provide for a trial period for an employee. In general, the trial period cannot last longer than three (3) months. For some categories of employees (for example, a chief executive of a company), the trial period can be up to six (6) months. It is prohibited to set a trial period for some categories of employees (for example, young professionals and pregnant women). If the employer includes a trial clause in an employment agreement with a person who is prohibited from establishing a trial period, this condition will not be valid. Dismissal of such an employee due to failure to pass the trial period on this basis will be illegal.

  • Hours Of Work

    • Normal business week may not exceed 40 hours. Some categories of employees (for instance, minors, handicapped persons, employees performing hazardous work) work shorter hours, but they will be paid as if they worked normal working hours. Upon the agreement between the parties, an employee may be allowed to work part-time (for example, a part-time working day, a part-time working week) and paid in proportion to the time worked. In addition, the employer is obliged to set part-time work at the request of a pregnant woman, one of the parents (guardian) with a child under the age of fourteen, as well as a person caring for a sick family member.

  • Special Rules For Part-time Work

    • Part-time work can be established both without a time limit and for any period agreed by the parties to the employment agreement. When working on a part-time basis, the employee is paid in proportion to the time worked by him or depending on the amount of work performed by him. Part-time work does not entail for employees any restrictions on the duration of the main annual paid leave, the calculation of seniority and other labour rights.

  • Earnings

    • Monthly salary of an employee who works standard working hours and performs employment duties may not be lower than the minimum salary specified in the federal law. The top level of salaries is not limited.

  • Holidays/Rest Periods

    • An employer is bound to grant annual leave to an employee. The leave lasts no less than 28 calendar days. Also employees are entitled to a weekly rest period of no less than 42 hours and to public holidays.

  • Minimum/Maximum Age

    • In general, persons who have achieved the age of 16 years may be employed. In some cases the hiring age may be reduced to 14 years (or even lower in certain very specific cases, for instance, if an employee is a sportsman) or increased to 21 years. For some occupations there is a maximum possible age.

  • Illness/Disability

    • In case of sickness an employee is entitled to a paid sick leave. The amount of this payment is limited by law. Generally, the sick leave is up to 15 days, however, depending on the severity of the illness, it may be prolonged up to 12 months. The law specifies guaranties and compensations in case of an industrial accident or occupational disease: an employee (their family) shall be reimbursed the lost earnings (income) and also additional expenses on medical, social, and occupational rehabilitation related to health injury, or expenses caused by employee’s death.

  • Location Of Work/Mobility

    • A workplace is a place where an employee must be based or where an employee is required to arrive at due for work and which is directly or indirectly controlled by an employer. Permanent workplace means a place of business for an organisation (or separate unit of an organisation). An employee’s workplace must be defined in the employment agreement (unless the parties agreed on telework).

  • Pension Plans

    • The legislation provides for obligatory and optional pension plans. An employer is bound to contribute to the Pension and Social Insurance Fund of the Russian Federation (Social Fund of Russia) in favour of all the employees in order to accumulate pensions guaranteed by the state. In addition, employers can contribute to nonstate pension funds upon the consent and in favour of employees.

  • Parental Rights (Pregnancy/ Maternity/ Paternity/ Adoption)

    • Persons who have family duties enjoy a wide range of additional labour rights and guaranties, including additional paid and unpaid types of rest time (days off, leaves); reduced working hours with salaries unchanged as if they worked normal hours; limitation of an employer’s right to terminate an agreement on a number of grounds etc.

    A parent is granted parental leave until the child reaches the age of three where first one (1) year and a half is paid, and the second part is unpaid. Parental leave can be used in full or in parts by the child's mother, father, grandmother, grandfather, other relative or guardian actually caring for the child.

  • Compulsory Terms

    • Compulsory terms of an employment agreement include: an employee’s place of work; employment duties; first day of work; payment conditions; rules of working hours and rest hours (if these differ from general internal rules of the employer); guarantees and compensation for work with hazardous working conditions; conditions that determine, if necessary, the nature of work (mobile, traveling, on the road, other nature of work); compulsory social security condition for the employee. The Labour Code of the Russian Federation and other laws and regulations may specify other compulsory conditions for certain categories of employees. For example, employment agreements of fixed-term employees must specify a period of employment.

  • Non-Compulsory Terms

    • The parties normally agree on the following supplementary (non-compulsory) terms of an employment agreement: a trial period for an employee; confidentiality provisions; an employee’s obligation to work for an employer for a specified period of time upon receiving education if the employer has paid for it; employee’s insurance; improvement of social and living conditions for an employee etc.


Types Of Agreement

Employment agreements may be classified into indefinite term agreements and fixed-term agreements. Also, there are employment agreements for primary and secondary employment, special types of agreements for certain categories of employees, such as: employees of public sector; employees whose work requires a lot of traveling; employees who work at home; athletes, teleworkers, and many others.


Secrecy/Confidentiality

An employee may be bound by an employment agreement not to disclose employer’s secrets protected by law (secrets of state, official secrets, commercial secrets and other). If an employee violates this duty, such employee may be dismissed and may be held liable for damages caused to the employer by this breach. The duty of confidentiality continues for a certain period after the termination of employment.


Ownership of Inventions/Other Intellectual Property (IP) Rights

An employer owns rights to the IP created in the course of employment unless the parties agree otherwise. In any case, an employee retains the right to be named as an author.


Pre-Employment Considerations

The Labour Code of the Russian Federation allows employers to ask only for exhaustive list of documents upon recruitment (such as ID documents, work record book, education documents if the job requires specific qualification). Criminal records can only be asked if it is directly allowed by federal laws (for example, teachers shall present criminal records upon entering into employment agreement). Initial medical examination is also provided for certain categories of employees and cannot be asked unless provided by the law.


Hiring Non-Nationals

Employers are obliged to ensure that all foreign employees have complied with the double permit system before they can work in the territory of the Russian Federation. First, an employer must obtain a permit to retain foreign employees that includes justification as to why Russian nationals cannot be hired to do this job. Furthermore, all foreign employees must also have a work permit to work in the Russian Federation. Finally, employers may hire foreign employees only within the limits of the annual quotas set by the Government of the Russian Federation. If the number of foreign workers employed by the employer in the relevant field of activity exceeds the established share, the employer is obliged to reduce their number before the beginning of the year for which this share is established. According to the Federal Law of 25 July 2002 No. 115-FZ On the Legal Status of Foreign Nationals in the Russian Federation (as amended) there is simplified procedure of obtaining a permit for highly qualified foreign employees. Also, this law fixes a simplified procedure of receipt of work permit – patent for those foreigners, who do not require visa for their stay in Russia. Meanwhile, certain categories of foreign employees are not bound by the abovementioned requirements and are treated more or less equally with Russian employees (in particular, nationals of the Eurasian Economic Union member states other than Russia: Belarus, Kazakhstan, Kyrgyzstan, Armenia).


Hiring Specified Categories Of Individuals

Russian legislation provides for special hiring rules for some sectors of economy and types of activities (for instance: transport, food industry, medicine etc.), as well as for certain categories of employees, such as: heads of organisations, minors, women, incapacitated people, and other socially vulnerable persons. In addition, the Labour Code of the Russian Federation contains provisions regulating the peculiarities of the implementation of labour activities of homeworkers, teleworkers, as well as workers in the Far North and equivalent areas.


Outsourcing And/Or Sub-Contracting/Temporary Agency Work

The Labour Code of the Russian Federation prohibits labour carried out by an employee at the order of the employer in the interests, under the management and control of an individual or legal entity that is not the employee's employer. Nevertheless, the law does not prohibit the conclusion of an agreement on the provision of personnel labour (out staffing agreement), subject to the requirements that apply to this type of agreements. Art. 18.1 of the Law of the Russian Federation of April 19, 1991 No. 1032-1 and Chapter 53.1 of the Labour Code of the Russian Federation regulate the procedure for concluding, the specifics of work and the responsibility of the parties to the agreement. Such out staffing agreement may only be entered into between an employee and private agency having special accreditation.

In addition, as an extraordinary measure, based on the Decree of the Russian Government dated March 30, 2022 No. 511, throughout 2022 and 2023, subject to an employee’s consent in writing, such employee could be temporarily transferred for work to another employer until December 31, 2023 further to a proposal of a public employment office. In such circumstances an initial employment agreement is put on hold for a period when such employee works for a new temporary employer.

3

MAINTAINING THE EMPLOYEE RELATIONSHIP

Changes To The Contract

In general, terms of an employment agreement may only be changed with the parties’ written consent. An employer may change an employment agreement upon its own initiative if there are business reasons for that. This requires giving a two (2) months’ advance notice to an employee. If an employee disagrees with the proposed changes, an employer should offer a different job to the employee in the same company. This job must match with an employee’s qualification and health status. If no such job is available, the employer must offer a lower position or a job with a lower salary. Should such a job be unavailable or should the employee refuse to do this job, an employment agreement shall be terminated. An employer may transfer an employee to a different job without an employee’s consent for a period of up to one (1) month in case of a natural disaster, industrial accident, fire, and in other exceptional cases threatening the lives or standard living conditions of general public. In this case, an employee can be transferred only to a job that relates to the prevention of mentioned cases or with clearing the after-effects of the same.


Change In Ownership Of The Business

In general, change in the ownership of the business does not entitle the termination of employment agreements. In case a company is transferred from state to municipal or private ownership (i.e. privatisation), a new owner may terminate an employment agreement with a chief executive officer (CEO), CEO’s deputies and a chief accountant within three (3) months. This rule does not apply to what is related to the change of shareholders in a company. In this case, according to the law, rank-and-file employees shall be safe to continue with the jobs, whereas the powers of a CEO may be terminated by new shareholders at any time (three (3) months’ prior notice is not required).


Social Security Contributions

The law requires an employer to pay the following insurance contributions –

  • mandatory pension insurance contributions (to the Pension and Social Insurance Fund of the Russian Federation (Social Fund of Russia));
  • mandatory social insurance contributions payable for temporary incapacity and maternity leave (to the Pension and Social Insurance Fund of the Russian Federation (Social Fund of Russia));
  • mandatory contributions for insurance against accidents at work and occupational diseases (to the Pension and Social Insurance Fund of the Russian Federation (Social Fund of Russia)); and
  • mandatory medical insurance contributions (to Federal and Territorial Medical Insurance Funds).

The purpose of these contributions is to compensate an employee for their lost earnings in cases of severe injury, an industrial or other disease, and to insure financial support of retired persons, pregnant women, and other qualified persons.


Accidents At Work

The law guaranties reimbursement both of an employee’s lost wages and additional health recovery costs in cases of industrial accident disease. Employee’s death involves reimbursement of lost income and funeral costs to the family.


Discipline And Grievance

One of the main duties of an employee is the duty to comply with the internal rules of an employer. Breach of this duty entails the application of the following disciplinary remedies: remark, reprimand, or dismissal. Employment legislation provides for other types of disciplinary remedies for certain categories of employees. An employer may not invent its own disciplinary remedies.

The Labour Code of the Russian Federation sets forth the procedure for bringing employees to disciplinary liability. If an employer does not comply with this procedure, the disciplinary remedies may be held invalid.


Harassment/Discrimination/Equal pay

All types of discrimination, which are not related to employees’ business skills are prohibited, including the discrimination by sex, race, skin colour, nationality, language, origin, property status, social status, official capacity, age, place of residence, attitude to religion etc.

An employer is obliged to provide equal pay for work of equal value. Persons who believe that they have been discriminated at work may file an application with the court to regain their violated rights, reimburse lost wages and moral damage.


Compulsory Training Obligations

There are no compulsory requirements for employers to provide training for employees. Additional training and retraining of employees are arranged by an employer on its own initiative. If training takes place with a break from work, then the employee is entitled to preserve average earnings and compensation for travel expenses, if training takes place in another locality, additional payments may also be provided for by the employment or collective agreement. An employee may be bound by an employment agreement to improve working skills.


Offsetting Earnings

Deductions from an employee’s wages can be made only as stipulated in the Labour Code of the Russian Federation and other federal laws to repay debts to the employer or other persons. The amount of these deductions is limited. Not more than 20% as a general rule, up to 50% when the law specifies so, and up to 70% in case serving correctional labour, collecting alimony for minor children, reimbursing harm caused to the health of another person, reimbursing harm to persons who have suffered damage in connection with the death of a breadwinner, and compensation for damage caused by a crime.


Payments For Maternity And Disability Leave

Women are guaranteed a maternity leave with a maternity allowance, lasting 70 calendar days (84 calendar days for multiple pregnancy) prior to the childbirth and 70 calendar days (86 calendar days for complicated childbirth, 110 calendar days when two (2) children or more are born) after the childbirth.

Also, it is guaranteed that family members (mother, father, and another family member) be granted a childcare leave until the child reaches the age of three (3) years. One (1) of the family members who is on childcare leave is entitled to childcare allowance until the child reaches the age of one (1) and a half year.

An employee is entitled to temporary disability payments in case of a disease or injury until full recovery or medical certification of permanent disability. The amount of this payment ranges from 60 to 100% of employee’s wages. Leave is granted for the entire period of incapacity to work.


Compulsory Insurance

An employer must provide mandatory social insurance (see Paragraph 3 “Social Security Contributions”).


Absence For Military Or Public Service Duties

Conscription of an employee to a regular military or mandatory civilian service is a ground to terminate an employment agreement. However, if an employee is called to arms due to a mobilization (a "mobilized employee"), such employee’s employment agreement is not terminated, but is to be put on hold for a military service period. Within that period a corresponding job place shall be kept for such mobilized employee. An employer may enter into a fixed term employment agreement with another employee to replace a mobilized employee on a temporary basis. A mobilized employee shall keep all his/her pre-mobilization social and labour benefits (inter alia, voluntary insurance, non-state pension support, etc.). A period of suspension of an employment agreement of a mobilized employee shall not be excluded for the purposes of calculation of his/her official labour experience.


Works Councils or Trade Unions

Labour trade unions in the Russian Federation represent and protect their members and non-members – the employees who have authorised trade unions to do so.

Trade unions may demand that employers remedy the breaches of employees’ rights. In turn, an employer must notify the relevant trade union about the review results for the trade union`s claims and of the measures taken.

Furthermore, an employer is obliged to take into consideration all opinions voiced by the relevant trade union whilst adopting certain internal documents, and when terminating an employment agreement with a trade union member.

The employers (except for individuals not being entrepreneurs) shall have the right to create a works council, an advisory body of employees on a voluntary basis, for the improvement of production activities.


Employees’ Right To Strike

Employee’s right to strike as a method to settle collective labour disputes is guaranteed by the Constitution of the Russian Federation and by the Labour Code of the Russian Federation. However, this right may be limited by other federal laws. At the same time, participation in the strike is voluntary. No one can be forced to participate or refuse to participate in a strike. Persons forcing employees to participate or refuse to participate in a strike shall bear disciplinary, administrative, and criminal liability. Employees and their representatives have the right to start arranging a strike when –

  • statutory mediation procedures (see Paragraph 1 “Forums for Adjudicating Employment Disputes”) have not resulted in the settlement of a collective labour dispute;
  • an employer avoids participating in mediation procedures;
  • an employer has breached the settlement agreement for a collective labour dispute; or
  • an employer has not complied with a labour arbitration award.

Employees On Strike

A representative body of employees which is authorised to settle collective labour disputes has the right to propose starting a strike. If an employee’s meeting has approved this proposal, a strike begins.

An employer must be given a written notice about a forthcoming strike no later than seven (7) business days prior to the event. An employer must then notify the Service for the Settlement of Collective Labour Disputes about the forthcoming strike.

A strike is illegal if it was announced without considering the terms, procedures and requirements provided for by the Labour Code of the Russian Federation.

The Labour Code of the Russian Federation prohibits dismissal of employees due to their participation in the labour dispute or strike. An employer may be fined for doing so.

Employees on strike are not entitled to any salary during the strike. Employees who have not participated in the strike but could not work because of the strike retain their salary.


Employers’ Responsibility For Actions Of Their Employees

An employer is responsible for an employee’s actions and is bound to reimburse damage caused by its employee while performing job-related duties. The actions of the employee that caused damage, committed not in the performance of his job duties, cannot entail the employer's obligation to compensate for the damage.

4

FIRING THE EMPLOYEE

Procedures For Terminating the Agreement

The labour legislation provides for several groups of grounds to terminate an employment agreement such as: termination on the initiative of an employee, on the initiative of an employer, and in case of circumstances beyond the reasonable control of the parties.

In general, an employment agreement may be terminated on statutory grounds only. The law establishes a special procedure for each of these grounds. Any breach of these procedures may lead to the invalidation of the termination of an employment agreement.

The termination of an employment agreement must be formalised by an order issued by an employer that must be made known to the employee. An employer shall be bound to hand over a work record book to an employee and pay all the amounts due to an employee on the day of the termination of an employment agreement.


Instant Dismissal

An instant termination of an employment agreement is only permitted in case of a gross violation of labour discipline as defined by the law.

In general, gross violations are as follows: unjustified absence for more than four (4) consecutive hours; appearance at work in a state of alcoholic or drug intoxication; violation by an employee of the commitment not to disclose confidential information of an employer (for example, commercial secrets); commitment of a theft; violation of safety engineering requirements by an employee if such violation has resulted in heavy after-effects (job-related accident or emergency) or knowingly posed a real threat of such after-effects.

However, even dismissal upon gross violation involves a certain procedure (including asking an employee for reasons of such violation and determining the lack of reasons for such violation) and cannot be done in one (1) day.

Some other grounds for instant dismissal have been provided by the legislation for certain categories of employees.


Employee's Resignation

An employee may terminate an employment agreement at any time subject to two (2) weeks written notice to the employer. Upon an agreement between the parties, the employment agreement may be terminated even before the expiry of the notice period. Should an employer violate an employee’s rights, an employee may terminate the employment agreement instantly.


Termination On Notice

In general, an employment agreement cannot be terminated without a reason specified in the law.


Termination By Reason Of The Employee's Age

As a rule, the existing labour legislation does not allow an employer to terminate an employment agreement for the reason of an employee’s age. However, some categories of employees (for instance, public sector employees, transport workers) may be dismissed because of their age.


Automatic Termination In Cases Of Force Majeure

Force majeure events may serve as grounds to terminate an employment agreement. The right to use such grounds to terminate an employment agreement must be supported by a resolution of the Government of the Russian Federation and/or the respective region of the Russian Federation, confirming relevant force-majeure circumstances.


Collective Dismissals

The Labour Code of the Russian Federation does not regulate collective dismissals. However, such cases are permitted, for example, in the event of dismissal at the employer’s initiative in connection with the liquidation of the organisation downsizing with two months prior notice and severance payment.


Termination By Parties’ Agreement

An employment agreement may be terminated at any time upon the agreement of the parties. The parties may determine conditions of such termination.


Directors Or Other Senior Officers

The law provides for a special procedure and grounds to terminate an employment agreement with a Chief Executive Officer (CEO). As a matter of fact, a CEO may terminate an employment agreement early by giving a one (1) month’s prior written notice to an employer.

Federal laws may establish other features of the regulation of labour of heads of organisations and members of collegial executive bodies of these organisations.

An employer may terminate an employment agreement with a CEO at any time without specifying any reasons. Other grounds provided for rank-and-file employees may be applied to the termination of an employment agreement with a CEO.

The Russian Labour Code also allows to introduce additional (not prescribed by law) reasons for employment termination into employment agreements with a CEO, if parties to such agreements agreed accordingly.

If an early termination of an employment agreement with a CEO is not related to guilty activities of a CEO, an employer must pay compensation to a CEO to the amount of three (3) months’ wages. Greater amounts of compensation may be stipulated in an employment agreement except for CEOs and senior officers of organisations owned by state or municipality.

Federal laws and constituent documents of legal entities may apply to members of collective executive bodies (executive boards) the same special rules as to CEOs.


Special Rules For Categories Of Employee

There are special rules relating to termination of employment agreements for certain categories of employees: minors, pregnant women and other persons with family duties, CEO of companies, dual jobholders, temporary employees, seasonal employees, athletes, and some others.


Specific Rules For Companies in Financial Difficulties

Should any financial problems occur, a company may undertake downsizing. The law provides for a mandatory procedure for redundancy. An employer must do the following: give a written notice to each employee about a forthcoming dismissal no later than two (2) months prior to the dismissal; offer vacancies, including lower-ranking and lower paid vacancies; observe the employees’ priority right to keep their job; pay loss-of-employment compensation for the first two (2) months after the dismissal, and in exceptional cases for the third month following dismissal, unless the employee has found another job by then.


Restricting Future Activities

Russian law does not permit employers to restrict the future activities of an employee. Such clauses are viewed as violating one of the basic constitutional provisions: freedom of labour.


Whistleblower Laws

The current legislation of the Russian Federation does not provide for any sanctions or penalties for an employee who reports the violation by the employer. An employer may not dismiss such employee or impose disciplinary sanctions and may not discriminate against such employee.


Special Rules For Garden Leave

The labour legislation of the Russian Federation has no equivalent of garden leave. In Russia, however, an employee is entitled to unpaid leave, which is granted at the employer’s discretion. It should be mentioned that such leave generally does not exceed a few weeks.


Severance Payments

A severance payment shall be made to an employee unless the employee’s dismissal is in relation to an offence, a guilty activity or termination of employment agreement is based on the initiative of the employee. The grounds for the payment of severance pay are enshrined in the Labour Code of the Russian Federation but may additionally be established by an employment or collective agreement.


Special Tax Provisions And Severance Payments

Only compensations directly stipulated in legislation are not taxable. Compensation for unused annual paid leave and additional compensations are subject to personal income tax and mandatory social insurance contributions. Meanwhile, all these compensations are accounted for as expenses reducing an employer’s taxable base for corporate profit tax.


Allowances Payable To Employees After Termination

Employers are not required to pay any allowances to employees after termination except as provided by law (i.e. in case of downsizing or conscription) or as agreed between parties.


Time Limits For Claims Following Termination

An employee may file an unfair dismissal claim with the court within one (1) month following termination. Others claims may be filed within three (3) months after it became known to the employee that the rights had been violated. Claims for unpaid wages may be files within one (1) year since the date such payment should have been made.

A year’s period has been set for an employer to sue an employee for damages. This period starts on the date when the damage is discovered by the employer.

5

GENERAL

Specific Matters Which Are Important Or Unique To This Jurisdiction

A specific feature of Russian employment law is that an employee (except for a CEOs and, in certain cases, an executive board member) may be dismissed by an employer only for the reasons specified in legislation. An employment agreement may not set forth any additional reasons for dismissal. For each of these reasons there is a specific procedure of employee’s dismissal which must be complied with by an employer. The court invalidates the dismissal if an employer breaches this procedure or dismisses an employee without a valid reason.

Also, it should be noted that the Russian legislation contains a lot of mandatory rules, the violation of which may lead to an employer’s administrative liability.



Search by:
Need more information?
Contact a Contributing Author:
Dmitry Volkovoy
Yust Law Firm
Russia


Disclaimer:

© 2024, Yust Law Firm. All rights reserved by Yust Law Firm as author and the owner of the copyright in this chapter. Yust Law Firm has granted to Multilaw non-exclusive worldwide license to use and include this chapter in this guide and to sublicense Lexis Nexis, a division of RELX Inc. and its affiliates certain rights to use and distribute this Guide.

The information in the How to Hire and Fire Guide provides a general overview at the time of publication and is not intended to be a comprehensive review of all legal developments nor should it be taken as opinion or legal advice on the matters covered. It is for general information purposes only and readers should take legal advice from a Multilaw member firm.

Publication Date: February 2024