Termination of employment

Grounds for termination

May an employer dismiss an employee for any reason or must there be ‘cause’? How is cause defined under the applicable statute or regulation?

Generally, an employer may dismiss an employee only on grounds and in compliance with the procedures specified by the Labour Code. There is no possibility of termination at-will under the Labour Code. The only exception applies to the dismissal of a CEO, who is the only employee of a Russian company that can be dismissed without his or her consent at any time (subject to certain corporate formalities). 

The Labour Code lists the following grounds that allow an employer to dismiss its employees on its initiative:

  • systematic failure to perform duties after written warnings without a valid reason;
  • unexcused absence from work without a valid reason;
  • disclosure of commercial secrets;
  • being under the influence of alcohol or narcotics in the workplace;
  • professional inaptitude owing to poor qualifications confirmed by formal evaluation;
  • staff redundancy or liquidation of the company; and
  • other substantial reasons.

 

Further, distance employees and the CEO could also be dismissed on the grounds set forth by such employee's individual employment contract.

Notice

Must notice of termination be given prior to dismissal? May an employer provide pay in lieu of notice?

An employer must give notice prior to dismissing an employee in certain cases that are provided for in the Labour Code. Such cases include dismissal owing to staff redundancy (ie, if the number of personnel or job positions is being reduced) and dismissal owing to the closure of a business (ie, the liquidation of a company).

Russian law requires that specific procedural requirements, which are considered to be relatively complicated (including providing two months’ prior notice to all employees who will be dismissed and notifying the state employment agency of the intended dismissals), must be carefully observed for a dismissal owing to staff redundancy or the closure of a business to be valid. Additional rules apply to ‘mass terminations’.

Under article 180 of the Labour Code, payment in lieu of the two-month notice period is permitted subject to the written consent of the employee.

In which circumstances may an employer dismiss an employee without notice or payment in lieu of notice?

An employer may dismiss an employee without notice, but only for the reasons set out in the Labour Code. In general, an employer can dismiss an employee for systematic failures in the performance of his or her employment duties without a valid reason after he or she has already received written warnings in relation to such failures. An employee may also be dismissed following a single violation of his or her employment duties, where such violation is deemed to be serious. In all cases, however, an employer must properly document each violation of an employee’s duties and follow the termination rules and procedures.

Severance pay

Is there any legislation establishing the right to severance pay upon termination of employment? How is severance pay calculated?

The Labour Code entitles an employee to a severance payment upon termination of employment in limited cases. The amount to be paid depends on the reason for the termination.

A severance payment of an amount equal to an average monthly wage is paid following a dismissal owing to an employer’s liquidation, staff reduction or elimination of job positions. In addition to this severance payment, an employee is also entitled to be paid an average monthly wage until he or she finds alternative employment, but this will only be paid for two months. In exceptional cases, this term may be extended to three months by the state employment agency if the dismissed employee applies to the agency within two weeks of the day of dismissal and was not employed through the agency.

A severance payment equal to two weeks’ average earnings is paid upon termination of employment for the following reasons:

  • refusal of an employee to be transferred to an alternative role in accordance with a medical statement or if the employer does not have an appropriate position;
  • call-up for military service or assignment to an alternative civilian service;
  • reinstatement of the employee who previously held the employee’s position;
  • refusal of an employee to be transferred to another region together with the employer;
  • recognition of an employee as fully incapable of working in accordance with a medical statement; and
  • refusal of an employee to continue working owing to a change of certain terms and conditions of the employment agreement.

 

Individual employment contracts or collective bargaining agreements may provide for other reasons and higher amounts of severance payments.

Procedure

Are there any procedural requirements for dismissing an employee?

The Labour Code requires that specific procedural requirements be complied with in the case of mass terminations or collective dismissals. The criteria for a collective dismissal are established by federal and regional laws, and generally are based on the number of employees dismissed and the period of redundancy.

There are some additional procedures that may apply for the dismissal of employees who are members of trade unions or members of management of bodies of trade unions.

Employee protections

In what circumstances are employees protected from dismissal?

The following categories of employees are protected from dismissal on all but a limited number of grounds, which are specified in the Labour Code:

  • pregnant women;
  • women with children under three years of age;
  • single mothers raising children under 14 years of age;
  • single mothers raising disabled children under 18 years of age;
  • employees raising motherless children under 14 years of age;
  • employees raising motherless, disabled children under 18 years of age;
  • employees being the sole wage earners of families with disabled children under 18 years of age; and
  • employees being the sole wage earners of families with children under three years of age.

 

Employees under 18 years of age may be dismissed only with the prior approval of the State Labour Inspectorate and the Commission for the Affairs of Underage Children.

An employer is not permitted to dismiss an employee (except in the case of liquidation of the employer) during the period of the employee’s temporary disability or paid annual leave. According to the recent changes in connection with the increase of the pension eligibility ages, employer's rights to dismiss employees in the pre-pension period are substantially limited.

Mass terminations and collective dismissals

Are there special rules for mass terminations or collective dismissals?

The Labour Code requires that additional specific procedural requirements be complied with in the case of collective (mass) dismissals. The criteria for a collective dismissal are established by territorial and industrial agreements, and generally are based on the number of employees dismissed and the period during which the dismissals occur.

When an employer proposes a collective dismissal, a consultation with the employee representative body or trade union may be required. An employer must also serve a notice with the state employment agency and trade union organisations no later than three months before the commencement of the dismissal. Collective bargaining agreements (which generally regulate social and employment relations between the employer and the employees, and provide for a higher level of protection of employees than applicable legislation) and territorial and industrial agreements (which generally regulate relations between employees and employers in certain regions or industries) may contain specific provisions relating to collective dismissals.

Further, certain categories of workers cannot generally be dismissed at the initiative of the employer; for example, pregnant women, single mothers and mothers with small children.

Class and collective actions

Are class or collective actions allowed or may employees only assert labour and employment claims on an individual basis?

Generally, Russian law does not recognise a concept of ‘class or collective’ actions. However, the Labour Code provides for alternative ways to settle collective employment disputes – by commission of conciliation, mediation or labour arbitration. Commission of conciliation is formed on an equal basis and consists of representatives from both the employer and the employees. If the commission fails to settle the dispute, the parties may decide on another form of settlement, which can be through either mediation or labour arbitration, or both, if necessary.

Mandatory retirement age

Does the law in your jurisdiction allow employers to impose a mandatory retirement age? If so, at what age and under what limitations?

The retirement age is established by law. Employers do not have the right to change it or request employees to retire before the retirement age. The Federal Law on Insurance Pensions provides for a gradual increase of the general retirement age depending on birth date and certain other criteria effective from 2019. By 2028, the mandatory retirement age will be 60 years for women and 65 years for men (certain exceptions apply).

Additional protections have been introduced for persons reaching pre-retirement age (ie, five years before retirement age). Unjustified refusal to employ, or unfair dismissal of, such a person could lead to criminal liability of the employer’s managers.