All questions

Discontinuing employment

i Dismissal

Pursuant to the law, employment may be terminated only on the grounds provided for by the law. The Labour Code stipulates the list of principal grounds for termination of employment, but it is not exhaustive; it can be extended by grounds stipulated in other federal laws.

As a general rule, the company does not have to notify the state bodies of a dismissal. Among the exceptions are dismissals owing to a company being wound up and redundancies (see below). If the company is dismissing a foreign employee, it must notify the General Directorate for Migration of the Ministry of Internal Affairs within three days of termination of the employment agreement.

Notification of the elected body of the trade union is to take place if the employer initiates dismissal of a trade union member for the reasons of staff reduction, insufficient qualification of the employee or numerous failures of the employee to fulfil his or her labour duties provided he or she has had a disciplinary punishment. The opinion of the trade union is not binding for the employer. The employer could dismiss an employee who is a member of the trade union-elected body for reasons of staff reduction or if he or she has insufficient qualifications, provided the elected body of the higher level trade union gives its consent.

The dismissal can take place within one month of the trade union providing its reasoned opinion.

If the employer decides on a staff reduction, it should submit a written notification to the elected body of the trade union organisation no later than two months before the planned action, and in three months if the staff reduction may lead to collective dismissal.

It is not common practice for employers to provide a social plan containing measures that are additional to those required by law or contained in industry or territorial agreements. However, measures aimed at reducing the number of employees subject to collective redundancy or providing re-employment may be contained in the company's collective bargaining agreement and may be implemented by the employer.

Offers of suitable alternative employment have to be made in the event of redundancy.

There are various notice periods for different types of dismissals. A notice of dismissal must be made in writing. Furthermore, it should be signed by the employee, proving that he or she received that notice. A notice period does not depend on the length of employment.

An employee who is not performing as expected during the probation period can be dismissed by giving three days' notice.

A fixed-term contract is terminated upon its expiration. An employer must notify an employee of the contract's termination three days beforehand.

In the case of redundancy or reduction of personnel, an employer has to notify employees two months before dismissal. Seasonal workers are to be given seven days' notice in such circumstances and three days' notice applies for temporary employees (working under an employment contract with the term of up to two months).

In all other cases of dismissal, the notification period is not defined in the law.

If a company is being wound up or there is a reduction of staff, the employer can, with the written consent of the employee, terminate the employment contract before expiry of the two months' notice period provided it pays additional compensation to the employee in the amount of the employee's average earnings calculated pro rata to the time remaining until the expiry of the notice period.

The general principle is that protection is granted to all employees. Special protection against dismissal at the initiative of the employer applies, inter alia, to the following groups of employees:

  1. pregnant employees (can be dismissed at the employer's initiative only if a company is being wound up; a fixed-term labour contract should be prolonged until the end of the pregnancy);
  2. employees under 18 (can be dismissed at the employer's initiative only upon consent of the appropriate state labour inspectorate and commission for juvenile affairs and protection of their rights (unless the company is wound up)); or
  3. employees with two or more dependants.

A severance payment shall be paid to employees in the case of termination of employment owing to the company being wound up, as well as in case of redundancy (as described below); and severance pay equal to two weeks' average wages is paid to an employee in the following cases of dismissal:

  1. the employee's refusal to be transferred to another job as might be required according to his or her medical certificate prohibiting him or her from remaining in the current job, or if the employer does not have an appropriate job;
  2. the employee being called to military service (or alternative civil service);
  3. the reinstatement of an employee who previously occupied that position;
  4. the employee's refusal to be transferred to a job in another location;
  5. the employee is recognised as being fully incapable of working in accordance with a properly issued medical certificate; or
  6. the employee refuses to continue working following a change in employment contract terms.

An employment contract or a collective contract may stipulate other cases of severance pay, as well as the amount of severance pay that is due.

If the employment is terminated at the mutual agreement of the parties, then a respective agreement specifying the terms of such termination shall be concluded.

ii Redundancies

If the company decides to apply the redundancy procedure, it should first select the employees that can be subject to redundancy, considering the protected categories.

Each employee must be individually notified in writing at least two months before the dismissal, and each employee should confirm notification in writing. Seasonal workers will be given seven days' notice in such circumstances and temporary employees (i.e., those with an employment contract of up to two months) are entitled to three days' notice.

The company further offers the employees all suitable vacancies the company has (including those requiring fewer qualifications or with a lower salary).

Each offer should be made in writing and the employee's refusal or consent should also be in writing. If there are no vacancies in the company, the employee should be served the appropriate notices and confirm the receipt thereof.

Under Russian legislation there is no difference between collective dismissal or reduction in the workforce. Mass lay-offs are not directly regulated. However, provisions in the Russian labour legislation related to 'downtime' indirectly regulate lay-offs. Under these provisions, in case of temporary suspension of work owing to economic, technological, technical or organisational causes, an employee may be transferred without his or her consent for up to one month to a job with the same employer that is not stipulated by the employment contract. In this case, transfer to a job that requires fewer qualifications is permitted only with the employee's written consent. If transferred, the employee is paid for the work he or she performs and at a rate not below the average earnings in his or her previous job.

A period of downtime owing to an employer's fault shall be remunerated in the amount of not less than two-thirds of the employee's average salary. A period of downtime owing to reasons dependent neither on the employer nor on the employee shall be remunerated by no less than two-thirds of the tariff scale and salary, which are calculated pro rata for the duration of the downtime.

In case of collective dismissal, the employer must provide notifications to the State Employment Agency of certain information in the following two stages.

In the first stage (three months before the dismissals):

  1. details of the employer and employees;
  2. a list of all the organisation's employees at the date of the notice;
  3. the reasons for the collective redundancy;
  4. the number of employees to be made redundant;
  5. the commencement date of the collective redundancy;
  6. the final date of the collective redundancy; and
  7. information about the employees to be made redundant (the profession, number of persons, date of dismissal).

In the second stage (two months before the dismissals), the employer must again provide details concerning itself and also information about each employee to be made redundant (full name, education, profession, qualifications and average salary).

The following categories of employees cannot be made redundant:

  1. pregnant women;
  2. women with children under three years old;
  3. single mothers with children under 14 years old (or disabled children under 18 years old);
  4. individuals bringing up a child under 14 years old (or a disabled child under 18 years old) without a mother; and
  5. a parent who is a sole breadwinner of a child under three years old in a large family bringing up minors where another parent is not employed and takes care of their children.

Among other employees, protection should first be given to employees with higher qualifications and labour productivity. To evaluate labour productivity, a performance review can be used; however, there is no statutory procedure on how the performance is evaluated.

Among employees with equal qualifications and productivity, the following categories should be given preference:

  1. employees with dependent family members;
  2. employees who have suffered from workplace injury or work-related disease while working for the company;
  3. employees doing professional training at the employer's instruction; and
  4. disabled veterans.

Protection may be given to additional categories by regional or industrial agreements, collective bargaining agreements, company policies, employment contracts, etc.

Actual termination of the employment contract cannot take place while the employee is on holiday or on sick leave (unless in cases of termination of employment owing to the company winding up).

If the employment is terminated because of a company winding up, as well as in the case of redundancy, a dismissed employee is to be paid severance pay equal to his or her average monthly wage. Further, an employee is entitled to payment of average monthly wages while searching for a new job. These payments are limited to a two-month period upon termination of employment (including the severance pay). If the employee obtains the agreement of the State Employment Service, he or she may be entitled to severance for the third month as well, provided he or she registered in employment service within two weeks from the date of dismissal.

If the employment is terminated on the ground of mutual agreement of the parties, an agreement specifying the terms of the termination shall be concluded.