Amendments to the Labor Code are introduced which specifically affect the procedure for concluding, amending and terminating employment agreements in Azerbaijan.

In accordance with the Law on Amendments to the Labor Code of the Republic of Azerbaijan, dated February 5, 2014 a new procedure was introduced for the registration of employment agreements.

Registration will now be mandatory for all employment agreements concluded in Azerbaijan, and the Ministry of Labor and Social Protection is charged with the duty to set up an electronic database for maintaining records of employment agreements submitted for registration. (The database is not yet in existence and is therefore not operational). The Ministry is also charged with the duty to prepare the various forms that will be required for the submission of information to the database.

In accordance with the newly-introduced procedure notification of all employment agreements, amendments to employment agreements and information on the termination of employment agreements must be submitted to the Ministry of Labor and Social Protection. Furthermore, for all existing employment agreements notifications are required to be submitted to the same authority by no later than July 1, 2014.

The amendments to the Labor Code also provide that employment relationships will become effective, not following the signature of the employment agreement, as has been the case until now, but rather from the time of the registration of the employment agreement in the aforementioned database.

Under the new law, the state authority shall issue to the employer an electronic confirmation of the registration of the employment agreement (amendments, termination) within one business day following the submission of the relevant notification.

In connection with the above procedure, new changes to the Administrative Offenses Code and the Criminal Code provide for the assessment of a fine of up to AZN 10,000 (for company officials), up to AZN 25,000 (for legal entities) or imprisonment of up to three years for engaging individuals for any work without an effective employment agreement.