Russin & Vecchi L.L.P.




ПУБЛИКАЦИИ

Labour Law

I.          Labour contract. Formalities (term, probation period, part-time work, temporary agreements, etc.)

Types of labour contracts

The Russian Labour Code sets forth the possibility to conclude both fixed-term (up to five years) and indefinite-term labour contracts.

Since Russian law provides more guarantees to employees under indefinite-term contracts than under fixed-term contracts (which motivates employers to conclude fixed-term contracts) there are certain mechanisms and limitations established for protection of employees’ rights by limiting the use of fixed-term agreements.

The Russian Labour Code contains a limited list of situations in which a fixed-term labour contract must be concluded and cases in which it may be concluded upon mutual agreement of the parties. It must be concluded in cases where labour relations cannot be established for an indefinite term in view of the nature of the work or the conditions of performance, for example, for fulfillment of seasonal work or for temporary work (up to two months), or with persons assigned to work abroad. A fixed-term contract may also be concluded with organization heads, their deputies and chief accountants, with persons engaged in regular academic studies, and in situations of multiple employment.

In other cases an indefinite-term labour contract must be concluded.

Russian law prohibits concluding fixed-term labour contracts for purposes of avoiding the provision of rights and guarantees to employees with whom an indefinite-term labour contract should be concluded. In this regard, as the Plenum of the Supreme Court of the Russian Federation noted in its Decree No. 2 dated 17 March 2004, if the court in the course of consideration of a dispute on the legitimacy of conclusion of a fixed-term contract finds no reasonable grounds for the conclusion of the fixed-term contract (e.g., the fact of multiple fixed-term labour contracts concluded for short terms for fulfillment of the same labour function) the court can recognize the labour contract to be an indefinite-term contract.

Where the employee continues working after the expiration of a fixed-term contract, the fixed-term nature of the contract becomes inoperative and the contract is regarded as an indefinite-term contract.

Conclusion of labour contracts

It is prohibited to refuse to conclude a labour contract due to circumstances of discriminatory nature, such as pregnancy or children. However, if an employer refuses to conclude a labour contract due to circumstances related to a person’s professional qualities, such refusal is considered to be justified.

A properly concluded labour contract must be in written form and executed in two counterparts by the employer and employee. One counterpart is given to the employee and the other one kept by the employer. Employment is formalized by an order (decree) of the employer; an employment record book is begun or, if the employee already has one, a record concerning the new job is made there.

If a labour contract is not concluded in the required form, but the employee commences work with the knowledge or under the instruction of the employer or its authorized representative, labour relations arise and a labour contract is considered to have been concluded. Upon admission of the employee to work the employer is obliged to conclude a labour contract with the employee in written form not later than three days from the day of factual admission.

A labour contract comes into force on the day of its execution by the parties, unless otherwise established by the labour contract or the law, or on the day of the admission of the employee to work with the knowledge or under the instruction of the employer.

Probation period

According to the Russian Labour Code the labour contract can establish a probation period for the employee for purposes of checking his suitability for the entrusted work. The absence of such a condition in the labour contract means that the employee is accepted to employment without a probation period.

A probation period cannot be established for certain categories of employees, such as pregnant women and women with children under 1.5 years of age, persons under eighteen years of age, persons concluding a labour contract for a term of up to two months, etc.

According to the general rule established by Russian legislation the term of the probation period cannot exceed three months, or, for organization heads, their deputies, chief accountants, their deputies and heads of separate subdivisions of organizations, six months. However, in a case where a labour contract is concluded for a term of from two to six months, the probation period cannot exceed two weeks.

Part-time work

A part-time working day or working week can be established by mutual agreement of the employer and employee upon hiring or afterwards. However, Russian legislation obligates the employer to introduce a part-time work regime when requested by a pregnant woman or by a parent (foster parent) having a child under fourteen years of age (disabled child under eighteen years of age), as well as by persons who are caregivers for family members in accordance with an official medical report.

Compensation for part-time work is proportional with time worked or according to work performed.

A part-time work regime does not limit employees in regard to duration of annual paid vacation, calculation of years worked, or any other labour rights.

II.        Agreement to stay at the Company (on the occasion of new projects, studies paid for by the employer, etc.)

The Russian Labour Code permits the parties to include into the labour contract some additional provisions that do not worsen the employee’s status in comparison to that provided for by the law or collective agreement. For example, the labor contract may contain a provision obligating the employee to work for a certain indicated time period after the completion of studies paid for by the employer, provided there is a provision obligating the employer to cover expenses for the employee’s studies.

The parties can include additional provisions beyond those that are named directly in the Labour Code. However, such provisions cannot reduce the rights and guarantees of an employee provided for by Russian legislation, and provisions worsening the status of the employee shall be regarded as invalid.

III.       Non-competition agreement after termination of a contract

Generally Russian law does not provide the possibility to conclude a non-competition agreement after termination of a labour contract. Prohibition to work in a particular sphere or for the employer’s competitors is likely to be regarded as a violation of the person’s formal legal capacity that is guaranteed by Russian legislation and as inconsistent with article 37 of the Russian Constitution, which guarantees the right to freely exercise one’s capabilities for labour.

Therefore, a non-competition agreement should be regarded as an unenforceable gentlemen’s agreement. Fulfillment of its conditions will depend on the employee’s sense of honor. There are no legal mechanisms to make such an agreement obligatory for a former employee. Nevertheless, conclusion of non-competition agreements is rather widespread in Russia nowadays, especially with top managers.

However, non-disclosure agreements can be enforced if properly drawn to maintain confidentiality of certain information received by the employee such as trade and manufacturing secrets.

IV.       Salary (minimum salary, guarantee, social security and taxation)

Minimum salary

A minimum salary rate, to be applied generally across Russia, is established by federal law and modified from time to time. The latest minimum salary was established as 4 330 Rubles (equivalent to approximately USD 145) as of 1 January 2009. Regions are allowed to establish a different minimum salary rate provided that it is not lower than the rate established by federal law.

The regional rate will apply to all workers in the region except for those working for organizations financed by the federal budget.

Taxation

 

The Russian Tax Code provides that individuals resident in Russia are subject to a flat 13% income tax on all income received under labour contracts performed in Russia. A resident is defined as any person spending 183 days or more in Russia during twelve successive months. The Tax Code requires, however, that persons spending less than 183 days on Russian territory are subject to withholding and payment of income tax at a flat 30% rate on income received for the time spent in Russia.

 

The employer is obliged to fulfill functions of a tax agent for his employees; i.e., he has to calculate, withhold and pay individual income tax for his employees to tax agencies.

V.        Working day (extra hours, shifts, night shifts)

The Russian Labour Code establishes the normal duration of working time at 40 hours per week. A shortened duration of working time is provided for certain categories of employees, for example, for employees aged sixteen to eighteen years (not more than 35 hours per week), for employees with disabilities of groups I and II (not more than 35 hours per week), for employees involved in work with harmful and (or) dangerous working conditions (not more than 36 hours per week).

Working day (shift) duration

There are certain requirements set forth by the Labour Code for the duration of a working day (shift) within established norms of the working time duration. Thus, for example, the duration of a working day (shift) for employees at the age of sixteen to eighteen years cannot exceed seven hours; for disabled persons, it must be in accordance with an official medical report; for employees involved in work with harmful and (or) dangerous working conditions, it cannot exceed six and eight hours for 36- and 30-hour working weeks accordingly, etc.

The duration of the working day (shift) cannot exceed four hours in the case of multiple employment; however, when the employee is free of work at the primary place of employment he can work a full working day at the secondary place of employment.

Overtime work

The Russian Labour Code establishes two forms of overtime work:

1. Engagement of employees in overtime work is allowed only with their written consent:

(1) when it is necessary to finalize work that could not be fulfilled during regular working hours due to technical troubles, if non-performance may cause asset damage or loss or threaten human life or health;

(2) during performance of temporary work on repair and restoration of the workplace or construction in cases where continued malfunctioning can cause work suspension for a significant number of employees;

(3) for continuation of work to avoid interruption when the alternating employee has failed to appear.

2. Engagement of employees in overtime work is allowed without their written consent:

 

(1) during performance of work necessary for prevention of catastrophes or during industrial accidents or remedial actions;

(2) during performance of socially necessary work to suppress unforeseen consequences caused by malfunctioning of water or gas supply systems, heating, transport systems, or similar services;

(3) during performance of work necessary in view of an emergency or military situation, and in cases threatening the life and normal living conditions of the entire population or a part of it.

 

The duration of overtime work must not exceed four hours on two successive days and 120 hours per year for each employee.

 

There is a list of categories of employees that cannot be engaged in overtime work, including pregnant women and employees under eighteen years of age. Some categories of employees, such as women having children under three years of age and disabled persons, may be engaged in overtime work only with their written consent and if such work is not prohibited for them for health reasons.

 

Work at nighttime

 

Night work is defined as the period from 10 p.m. until 6 a.m. A night shift is not shortened for persons employed specifically for night work, except that where a regular rotation of shifts includes a night shift that shift will be reduced by one hour.

 

Certain categories of employees cannot be engaged to work at night, including pregnant women and employees under eighteen years of age, except for theatrical and similar artists. Some categories of employees, such as women having children under three years of age, and employees with disabled children, may be engaged to work at nighttime only with their written consent and if such work is not prohibited for health reasons.

 

VI.       Leaves (maternity, illness, trade union activities, relatives’ illness or death, temporary leaves, change of domicile, marriage, etc.)

 

In this section we describe unpaid vacation and other periods of release from work: employee leaves that are not related to annual paid vacation or off-work days.

Unpaid vacation

The Russian Labour Code provides for the possibility of granting so-called “unpaid vacation” to employees. Such vacation may be provided to an employee due to family circumstances or other sufficient reasons upon the employee’s written application. The employee does not receive any compensation for this period. Its duration is negotiated with the employer. Generally unpaid vacation is granted only with permission from the employer. However, in certain cases it is an obligation of the employer to provide unpaid vacation when requested by the employee, for example, to working persons of retirement age (up to fourteen calendar days per year); to working disabled persons (up to sixty calendar days per year); to employees in cases of birth of a child, marriage, or death of a close relative (up to five calendar days).

Other periods of release from work

Other periods of release from work can be caused by the employee’s health (sick leave, maternity leave), combining work with studies, fulfillment of family duties (child care leave), fulfillment of state and public duties (activities related to elections, trade union activities), and other reasons. Releases from work in these cases are regarded as guarantees and benefits are provided to employees by the government for protection of their rights and interests. Such leaves imply preservation of a position and a continuation of employment. In certain cases the employee released from work receives payment for these periods, either from the social insurance fund, or from the body in whose interests the employee is released, or from the employer.

Thus, for example, women are provided with maternity leave upon their request and on the basis of a temporary disability certificate for a period from 140 to 194 calendar days. Women on maternity leave receive a social insurance benefit payment from the social insurance fund.

VII.     Vacation and off-work days

Vacation[1]

According to the Russian Constitution and Labour Code every employee has a right to annual paid vacation, i.e., to release from work each working year with preservation of the position and salary. Only those people working as independent contractors under civil law contracts do not have the right to paid vacation.

There are two kinds of annual paid vacation established by Russian labour legislation: (1) annual main paid vacation and (2) annual additional paid vacation.

(1) The right to annual main paid vacation is enjoyed by all workers regardless of the employer they work for (a legal entity or physical person), place of work, or work regime.

The minimum length of annual main paid vacation is 28 calendar days. The length of this vacation cannot be less than 28 days in any case. For certain categories of employees or in view of the nature and conditions of work the length of the annual main paid vacation may be increased. Such vacation is called “prolonged main vacation”. Many categories of employees have the right to prolonged main vacation, for example, employees under eighteen years of age (vacation of 31 calendar days is provided); working disabled persons (vacation of not less than 30 calendar days is provided); and teachers (42 or 56 days of vacation is provided).

(2) Annual additional paid vacation is provided in addition to the main vacation, whether minimal or prolonged, and added to it. Such vacation is provided to employees involved in work with harmful or dangerous working conditions (from 6 to 36 calendar days), to employees working in areas of the Far North and areas approaching the Far North (24 and 16 calendar days respectively) and in other similar cases. Additional vacation is aimed at compensation or neutralization of the influence of unfavourable factors on the employee’s health.

In addition to prolonged or additional paid vacation established by Russian legislation, other cases can be provided for by collective agreement.

Off-work days

The Russian Labour Code distinguishes days off and off-work holidays. On both occasions employees are prohibited from working, except in certain situations established by the Labour Code (with written consent of employees or without it). The employer has to either (1) provide double compensation for work on each off-work day or (2) provide single compensation for work on each off-work day and provide a day off on another day.

(1) Days off

Employees having a five-day working week are provided with two days off per week, and employees having a six-day working week get one day off. The usual day off is Sunday; the other day off for employees having a five-day working week is established by collective agreement or internal regulations. Typically both days off are sequential.

In cases where work cannot be interrupted by days off due to technical industrial and organizational conditions, off-work days are granted on different days of the week on a rotating basis to each group of employees.

The Russian Labour Code provides the right to additional days off to women working in a village area (one unpaid additional day off per month) and persons caring for disabled children (four paid additional days off per month).

(2) Off-work holidays

Twelve off-work holidays are established in the Russian Labour Code. If an off-work holiday coincides with a day off, the holiday is transferred to the next day.

VIII.    Change of tasks or of post and geographic mobility

A change of the job function (accountant transferred to secretarial position) or job location (transfer to another city or region) that is not initially indicated in the labour contract is considered to be a “transfer to another job” (i.e., alteration of the contract). Such a transfer is allowed, as a general rule, only with written consent of the employee.

In certain cases of temporary transfer to another job, consent of the employee is not required, for example, if a natural or man-made catastrophe or other occasion threatens the life or normal living conditions of the population; or if temporary suspension of work occurs due to economic, technological, technical or organizational reasons.

It should be noted that a simple transfer of an employee to another local workplace while remaining employed by the same employer, to another business subdivision located in the same area or to a job on another mechanism or unit, if it does not cause a change in the labour contract conditions, is not regarded as a “transfer to another job”. Consequently, in such cases no consent of the employee is required.

IX.       Change in the working conditions

In cases where due to a change of organizational or technological working conditions (example: new high-speed equipment is introduced and the technician’s hours and salary are reduced) the labour contract conditions cannot be maintained, their change is allowed on the initiative of the employer, except for a change of the employee’s job function.

The employer must notify the employee about the corresponding change of the contract conditions in written form not later than two months before. The employee has the right to refuse to work under the new conditions. In this case there are two options provided by the Labour Code: (1) the employee agrees to another vacant post/work offered by the employer (which the employer must offer if the employee disagrees with the change of conditions) and the contract is not terminated, or (2) if the employee refuses the offered post/work, the labour contract terminates.

If a change of organizational and technological working conditions may cause mass dismissal of employees the employer can introduce a regime of a part-time working day (shift) and (or) part-time working week for a term of up to six months for purposes of preservation of positions. If an employee refuses to work under a part-time work regime the labour contract terminates.

X.        Sub-contracting and temporary work

Sub-contracting

Labour legislation applies purely to relations that are based on an agreement between employer and employee on personal performance of work by the employee for payment. Therefore, the employee is obliged to perform work under the labour contract in person. In view of this requirement sub-contracting is not allowed under Russian labour legislation.

Temporary work

The term “temporary employee” is not directly used by the Russian Labour Code. However, persons employed for a fixed term of up to two months are considered as performing temporary work[2].

There are certain peculiarities of the legal status of temporary workers that should be taken into account:

(1) a probation period cannot be established due to the short period of the temporary employees’ work;

(2) unlike general rules on engagement of employees to work on days off and off-work holidays, the principal requirement regarding the engagement of temporary employees to work on these days is to obtain their written consent. Also temporary employees working on days off or off-work holidays receive double payment.

(3) temporary employees are provided with paid vacation or receive compensation in the case of contract termination calculated on the basis of two working days for a month of work.

XI.       Transfer of undertaking

Labour relations are imparted when the owner of the enterprise changes, is combined with regulation of labour relations in the case of company reorganization and when its governance is changed[3]. However, in all these cases the labour contract continues to be operative unless the employee refuses to continue to work in which event the refusal results in contract termination. Therefore, a new labour contract need not be concluded, and all conditions of the existing labour contract remain valid.

As a general rule a change of the owner of an organization, a change of an organization’s governance or its reorganization are not grounds for labour contract termination. However, there are some specific features in the case of a change of the owner of the organization. First, the new owner is entitled to terminate the labour contracts with the head of the organization and his deputies and chief accountant. Second, staff reduction for redundancy is allowed after state registration of the ownership transfer.

XII.     Suspension of the labour contract (strike, temporary leave, etc.)

Suspension of the labour contract in the strike period

Participation of the employee in a legitimate strike cannot be regarded as a violation of labour discipline and cannot be a basis for labour contract termination or application of other sanctions. Employees conducting a strike suspend performance of duties under the labour contract. Upon completion of the strike they are entitled to continue working at the same place.

For the duration of the strike the jobs and positions of the participating employees are preserved. However, as a general rule, the employer has the right not to pay salary to them. As to employees who are not participants in the strike but at the same time cannot perform their work due to the strike, the employer is obliged to pay idle time compensation to them.

Suspension of the labour contract during a temporary leave period

In the case of temporary leaves the employee suspends performance of his duties under the labour contract and in most instances the employer does not pay compensation during these periods. Please see section VI for more information.

Suspension in other cases

In the case of delay of salary payment for a period of more than fifteen days the employee has a right to suspend work for the entire period until the owed sum is paid. However, on certain occasions suspension of work is not allowed, for example, for employees performing activities related to maintenance of services vital to the population (water or gas supply); in military, search and rescue organizations, and others.

XIII.    Board representation

The right of employees to participation in the organization administration directly or via their representative bodies is guaranteed by the Russian Labour Code.

There are different forms of employee participation in the organization administration. One of the most important forms is employee representation in the governing bodies of the company, but this can be realized via their representative bodies only.

 

However, the right of employees to participate in company administration is rather nominal today. In practice it is difficult for employees’ representatives to participate in the work of governing bodies since they are usually not admitted because corresponding obligations of employers are not established in the law.

XIV.    Right to strike

The Russian Constitution recognizes the right to strike as a part of the right to labour disputes. The Russian Labour Code defines a strike as a temporary voluntary refusal of employees to fulfill labour duties for the purpose of resolution of a collective labour dispute.

The procedure for conducting a strike is complicated, especially if the labour collective is large. First, the parties must attempt to resolve the dispute by means of conciliation procedures. Only if no positive results are achieved can employees strike.

A decision to announce a strike is taken by an employees’ meeting with not less than half the entire number of employees present or by a conference of employees’ representatives with not less than two thirds of the conference delegates present. A decision is considered to be adopted if a majority votes for it. The duration of the strike and expected number of participants must be indicated in the decision; the employer must be notified of the beginning of the forthcoming strike in writing at least ten days in advance.

In certain cases strikes are prohibited, for example, during an emergency or military situation, in organizations involved in maintenance of activities vital for the population (energy, water, and gas supply), if conducting a strike threatens state security or human life and health. A strike is regarded as illegal if it was called without regard to the terms, procedures and requirements set forth by the Russian Labour Code. Employers often apply to the court to recognize a strike as illegal. And there are many cases where employers succeed in having strikes recognized as illegal by the court even before they have started.

There is not much experience in conducting strikes strictly in accordance with the requirements of the Labour Code. Spontaneous refusal to work (voluntary suspension of production) and hunger strikes are more widespread forms of protest.

XV.     Termination of the contract by the worker

An employee has a right to terminate a labour contract with advance written notice to the employer of one month in the case of the head of the organization, and two weeks in the case of other employees.

On the last day of work the employer must return his employment record book and other documents and perform a final settlement with him.

Termination allowance

Russian law does not establish the right to a termination allowance where the employee terminates on his own initiative. However, there are many cases in practice where an employer wishes to terminate an employee, but there is no legal basis for such termination. In such situations employers propose that the employee terminate the contract “on his own initiative”, and the parties agree on compensation which usually amounts to several months’ salary.

XVI.    Termination of the contract by the employer

The labour contract may be terminated by the employer in cases established by Russian legislation, including:

(1) liquidation of an organization or termination of activity by an individual entrepreneur;

(2) staff redundancy;

(3) unsuitability of the employee for the position or job in view of confirmed lack of qualification;

(4) change of owner of the organization, in which case the head of the organization, his deputy and the chief accountant may be terminated;

(5) repeated failure by the employee to perform his duties without sufficient reason if a disciplinary sanction was already applied to him;

(6) a single gross infringement of duties by the employee, such as absence from work without sufficient reason; showing up at work intoxicated; disclosure of state, commercial or other secrets protected by law;

(7) a single gross infringement of duties by the head of the organization or his deputy or chief accountant;

(8) the taking of an unreasoned decision by the head of the organization or his deputy or chief accountant causing potential harm to the organization, illegitimate use of property or other damage to it;

and other cases established by the labour contract or the law.

Dismissal of the employee on grounds indicated in clauses (2) and (3) above is allowed only if it impossible to transfer the employee to another job. The employer is obliged to offer the employee any vacancy he has in the same area.

In the case of termination of the activity of a separate subdivision of the organization located in another area, termination of the labour contract with an employee of this subdivision is performed in accordance with the rules providing for liquidation of the organization.

It should be noted that Russian law prohibits dismissing an employee on the employer’s initiative in the case of temporary disability or during vacation (except for cases of liquidation of an organization or termination of activity by an individual entrepreneur).

Termination allowance

Russian labour legislation establishes an employee’s right to receive a termination allowance as one of the guarantees for being dismissed under certain grounds.

A termination allowance in the amount of the average monthly salary is paid to the employee in the case of termination of the labour contract due to organization liquidation or staff redundancy.

Also, the Russian Labour Code provides for the right of a dismissed employee to the average monthly salary for the period of his employment, however, according to a general rule, for not longer than two months from the day of dismissal, with deduction of the termination allowance. This right means that a dismissed employee facing a delay in employment receives an average monthly salary for the second month after dismissal regardless of the reasons of such a delay.

A termination allowance in the amount of two weeks’ average salary is paid to an employee on termination due to refusal of the employee to transfer to work in another area, or due to refusal of the employee to continue working in view of a change in the contract conditions.

The termination allowance can be at a higher level for certain employees such as heads of organizations. Also, the labour contract or collective agreement may establish other cases of termination allowance payment, as well as increased rates of termination allowances (for example, for employees who have worked a certain number of years for the employer).

XVII.  Disciplinary dismissal

Many reasons for labour contract termination on the employer’s initiative are related to application of disciplinary sanctions to the employee.

One of the most important issues that the employer should take into account when he intends to dismiss an employee on the basis of a violation of labour discipline is observance of the order of sanction application set forth by the Labour Code. Please see section XVIII for details. In practice there are occasions when employees are dismissed for disciplinary reasons but without observance by the employer of the required procedures. In these cases the employee can appeal to the court for illegitimate dismissal and finally be reinstated in his job receiving idle time compensation from the employer on the basis of the court decision.

XVIII. Faults and sanctions

For commitment of a disciplinable offense, i.e., non-performance or improper performance of labour duties by the employee through his fault, the employer is entitled to apply disciplinary sanctions. The most widespread are reproof, reprimand, and dismissal. The choice of sanction must be based on the gravity of the offense and the circumstances under which it was committed. The order of application of the disciplinary sanctions is established by the Russian Labour Code.

Before application of a disciplinary sanction the employer has to request a written explanation clarifying all the circumstances of commission of the offense, its wrongfulness, and the degree of the employee’s guilt. If the employee does not present such an explanation within two days the employer issues a corresponding act. This act will be the evidence of the employer’s observance of the rules of the sanction application to the employee in the case of a dispute regarding its legality.

An employer can discipline an employee immediately after discovery of an offense but not later than one month from the day of its discovery or six months from the day of its commission. However, if the disciplinary offense is discovered as a result of an inspection, audit or examination of financial and operational activities, the sanction may be applied within two years from the day of its commission.

The employer should draw up an administrative order regarding application of the disciplinary sanction. If the employee refuses to sign, the employer adopts a corresponding act that also will be evidence in the event of a dispute.\

XIX.    Representation of workers: trade union meetings and elections

The interests of employees in communications with the employer on certain issues are represented by trade unions or other representatives elected by employees. Among such issues are conduct of collective negotiations; conclusion or change of a collective agreement; realization of the right to participation in company administration; consideration of labour disputes, etc.

The trade union of the organization can represent the interests not only of its members, but also of other employees. In this case non-member employees have to authorize the trade union body. In practice powers are transferred through an employee’s application to the trade union to represent his interests.

XX.     Prevention of occupational risks

The Russian Labour Code imposes on the employer an obligation to create working conditions for his employees that comply with labour safety requirements.

This obligation includes the following:

(1) To maintain the safety of employees in the use of buildings, constructions and equipment. The compliance of projects with reliability and safety requirements is determined by means of state expert examination.

(2) To maintain compliance of the workplace with labour safety requirements. The employer has to maintain rational use of industrial premises, improvement of technological processes and modernization of technological equipment, as well as to organize effective control over the level of harmful and dangerous factors influencing an employee’s health. The compliance of workplaces with labour safety requirements is determined by an inspection commission created in the organization.

(3) To inform employees on conditions in places where they have to work: on working environment factors, labour process factors, occupational risks, corresponding compensation, and similar factors.

(4) To undertake measures on accident prevention. The employer has to develop instructions on labour safety for employees, which include safety requirements and specific directions in cases of possible accidents.

(5) For purposes of social protection of employees suffering from production injuries and occupational diseases, etc., the employer has to maintain obligatory social insurance for employees against industrial accidents and occupational diseases. Please see section XXI for more information.

XXI.    Social Security: Registration, contribution, disability and retirement

Maintenance of employee insurance is an obligation of each employer. In this regard, at the time of their formation and official state registration, legal entities and individual entrepreneurs must register with several state non-budgetary funds: the Social Security Fund of the Russian Federation; the Federal Obligatory Medical Insurance Fund; territorial obligatory medical insurance funds; and the Pension Fund of the Russian Federation.

Employers must pay insurance premiums on a monthly basis for all employees at the rate of 26% of the total amount of payments to employees for the month with the deduction of certain amounts (calculated in accordance with the RF Federal Law “On Insurance Premiums to the Pension Fund of the Russian Federation, the Social Insurance Fund of the Russian Federation, the Federal Obligatory Medical Insurance Fund and Territorial Obligatory Medical Insurance Funds”)[4]. However, as of 1 January 2011, the general rate of insurance premiums will be increased to 34%.

Employees are provided with “certificates of obligatory medical insurance” in which specific facilities are named (general hospital, dental clinic, maternity hospital) where employees can obtain medical services free of charge.

The Social Insurance Fund pays allowances such as temporary disability benefits, a maternity allowance, a monthly allowance for child care, and an allowance for childbirth.

Obligatory pension insurance provides an age-based retirement pension, a disability retirement pension, and a survivor retirement pension. Insurable events are reaching of retirement age (as a general rule, 55 years for women and 60 years for men), onset of disability, and loss of breadwinner.

It should be noted that recently non-state pension insurance has begun to become popular in Russia. Employers formalize maintenance of an additional pension for their employees, a so-called “corporate pension”, which improves the image of employers and attracts employees, especially young ones.

XXII.  Judicial procedures of a labour nature

According to the Russian Labour Code courts can settle only individual labour disputes, and not collective ones.

The court can settle all types of individual labour disputes. Most individual disputes can be considered by courts only after conciliation procedures are undergone.

However, there are some disputes that can be settled directly by the court:

(1) an employee’s appeal for reinstatement at work regardless of the grounds for the termination of the labour contract; change of the date and wording of the grounds for termination; transfer to other work; and others;

(2) an employer’s appeal for compensation by an employee for damages inflicted on the employer;

(3) a person’s appeal in the case of refusal of an employer to hire;

(4) a person’s appeal in the case of discrimination;

(5) a person’s appeal when working under a labour contract concluded with employers who are physical persons that are not individual entrepreneurs, and when working in religious organizations.

There are no special labour courts or industrial tribunals in Russia. Courts resolve labour-related disputes in a general jurisdiction procedure in accordance with rules established by the Russian Civil Procedural Code.

However, in the case of a company’s bankruptcy the arbitrazhnyi sud (commercial court)[5] is the body in charge of resolution of labour disputes. But employees cannot be deprived of a right to appeal to a court of general jurisdiction on disputed issues regarding salary payments.



[1] Since the RF Labour Code distinguishes annual paid vacation and unpaid vacation, in this section we will understand annual paid vacation under “vacation” (unpaid vacation is described in section VI).

[2] Persons employed for replacement of an absent employee are not considered “temporary” employees. Employers conclude fixed-term labour contracts with these persons.

[3] As clarified by the Russian Supreme Court, transfer of ownership rights to the property of an organization from one person to (an)other person(s), in particular, in the course of privatization of state/municipal property; of conversion of property of an organization into state property; of transfer of state enterprises to municipal ownership and vice versa, should be understood as a change of owner of the organization.

[4] To the Pension Fund, 20%; to the Federal Obligatory Medical Insurance Fund, 1.1%; to territorial obligatory medical insurance funds, 2%; to the Social Insurance Fund, 2.9%.

[5] The arbitrazhnyi sud (commercial court) system in Russia should not be confused with private arbitration. These courts have jurisdiction over most commercial disputes between legal entities and individual entrepreneurs.

 

БАНГКОК ВАШИНГТОН ВЛАДИВОСТОК МОСКВА НЬЮ-ЙОРК ПУЭРТО ПЛАТА
САНТО-ДОМИНГО ТАЙБЭЙ ХАНОЙ ХО ШИ МИН ЮЖНО-САХАЛИНСК
   
 

Офисы компании "Русин и Векки" в Бангкоке, Ханое, Хо Ши Мине, Санто-Доминго и Тайбэе являются в своих городах членами организации "Меритас" - крупнейшего всемирного объединения независимых юридических фирм, занимающихся корпоративным и коммерческим правом. Фирмы-члены "Меритас" имеют независимую практику и не отвечают по обязательствам друг друга.


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