Russia

Sources of regulation

The central source of law in the Russian Federation as regards termination of employment is the Labour Code (LC). The LC currently in force was first promulgated in 1971, and has since been extensively amended, particularly, as may be expected, following the transition of the political system from communism to market-based economy.

Scope of legislation

The LC applies to all waged or salaried employees, a category which is not defined within the LC itself.[1] However, the LC permits legislation to provide for special working conditions for seasonal workers, temporary workers, persons combining jobs, home workers and domestic workers (sec. 253, LC). The LC also permits legislation to provide for special working conditions for specific industries, including transport, communications, agriculture and forestry (sec. 252, LC).

The LC may not be contracted out of in labour contracts[2] in a way which worsens the position of the employee, and any attempts to do so are invalid (sec. 5, LC).

Contracts of employment

Contracts of employment may be:

• for an indefinite period;
• for a definite period not exceeding five years; or
• for specific work (sec. 17, LC).

Fixed-term contracts are permitted when employment relations cannot be established for an indefinite period due to the character of the anticipated work, or the conditions of work, or the interests of the worker or as permitted by other specific legislation (sec. 17, LC). All labour contracts, including indefinite ones, are required to be in writing (sec. 18, LC).

If a fixed-term or fixed-work contract is extended beyond its terms the contract is then regarded as an indefinite one (sec. 30, LC).  

Probationary (or trial) periods are permitted, provided that the probation period is recorded beforehand in the contract. However, probationary periods cannot be utilized in respect of certain categories of employees, such as workers under 18 years of age, disabled Second World War veterans, and young workers graduating from specialized or vocational institutes (sec. 21, LC). During any trial periods the LC applies to probationers, and any trial term should not exceed three months (or six months, if agreed to by the elected trade union) (secs. 21 and 22, LC). If an employee fails to perform satisfactorily during a probation period, his or her employment may be terminated without severance pay, and without the trade union’s consent, although the employee has the right to appeal any such termination to the City People’s Court (sec. 23, LC). If any probation period expires and the employee continues working, the employee is deemed to have satisfactorily performed any trial period (sec. 23, LC).

Termination of employment

Labour contracts may be terminated, other than at the initiative of the employer:

• by mutual agreement;
• by expiry of a fixed-term or fixed-work contract (unless the employee continues to work; see above);
• if the employee is called to, or enlists for, military service;
• if the employee resigns (on two weeks’ notice) (sec. 32, LC);[3]
• if the trade union requests that the employment of the establishment’s chief executive terminates on certain grounds (see below);
• if the employee’s employment is transferred, with his or her consent, to another establishment;
• if the employee refuses to transfer with the establishment to another location;
• if the employee refuses to continue working due to a change in basic working conditions; or
• if the employee is sentenced to imprisonment or some other sentence, making employment impossible (sec. 29, LC).

Employers are obliged to dismiss chief executives[4] on the request of the relevant trade union if the executive:

• breaches the provisions of labour legislation;
• fails to observe the terms of a collective agreement; or
• “displays bureaucraticism or red tape” (sec. 37, LC).

The transfer of an enterprise from one owner to another does not terminate employment. Employment continues with the new employer (if the employee consents) and dismissal is only possible on the grounds of a reduction in staffing levels (sec. 29, LC).

If the employee’s resignation is due to the impossibility of continuing work (including if the employee wishes to retire or enter an educational institution) the employer is obliged to terminate the employment contract within the period the employee requests (sec. 31, LC).

An employee may terminate a fixed-term or fixed-work contract early if he or she is ill or disabled, or prevented from working, or if the employer breaches the provisions of legislation or an applicable collective agreement, or for any other good reason (sec. 32, LC).

Dismissal

The general principle against unfair dismissals is set out in sec. 40(1) of the LC, which guarantees “judicial protection against unjustified dismissal”. In addition, certain categories of dismissal are automatically unjustified. These include dismissals on the grounds of sex, race, nationality, language, social origin, property-owning status, place of residence, religious convictions, belonging to public associations or any other circumstance which is not relevant to the worker’s professional qualities (sec. 16, LC). However, sec. 16 also provides that distinctions involving requirements appropriate to the type of work, or due to a special concern of the State for persons who need higher levels of social and judicial protection, are not to be regarded as discrimination.

The dismissal of pregnant women, or women with children under three years of age, is unlawful, except in cases of the complete closure of the enterprise (sec. 170, LC). The dismissal of an employee while on sick leave or holiday is not allowed unless the dismissal is due to the closure of the enterprise. Elected union officials may not be subject to discipline, including dismissal, without the consent of the trade union. Moreover, union officials may not be dismissed for two years after holding office, except in the case of a complete closure of the enterprise (sec. 235, LC).

Lawful grounds for dismissal are set out in sec. 33 of the LC as follows:

• closure of the enterprise or reduction in staffing levels (also permitted by sec. 40(2));
• the discovery of the employee’s inability to fulfil his or her post or carry out his or her functions due to lack of qualifications or reasons of health;
• another employee is reinstated to the position;
• regular unsatisfactory performance by the employee in fulfilling his or her contractual duties, after the application of disciplinary and social sanctions short of dismissal;
• idleness (including a single absence for more than three hours in one working day) without good reason;
• absence from work for more than four continuous months due to a temporary disability (not including maternity leave), provided other legislation does not stipulate a longer period[5] and the disability is not attributable to an employment injury or occupational disease;
• appearance at work in an intoxicated state; and
• a court conviction for stealing public or state property.

Dismissal pursuant to the three grounds listed above is only lawful if it is not possible to transfer the employee, with his or her consent, to other work. All the above grounds apply to both termination of indefinite contracts of employment and early termination of fixed-term contracts. The grounds listed in sec. 33 are expressed to be an exhaustive list of the lawful grounds for termination.

However, additional grounds for dismissal can apply to certain categories of employees, as follows:

• for heads of enterprise or their deputies, a single gross violation of duties or such other grounds as may be stipulated in their labour contracts (sec. 254, LC);
• for employees directly involved in dealing with money or commodities, an act such as to destroy the employer’s trust in the employee;
• for employees carrying out educational work, immoral acts incompatible with continuation of such work;
• for heads or directors, or members of a company’s management council of a joint stock company, termination by shareholders without notice or cause (sec. 69, Joint Stock Act).

In addition, the LC permits other legislation to establish further grounds for dismissal for specific categories of employees, in the event of a violation of established rules for hiring and in other instances.

Notice and prior procedural safeguards

The consent of the relevant trade union is required for dismissals resulting from a worker’s inability to fulfil the duties of a post or his or her lengthy absence due to illness or injury. The remaining grounds for non-economic dismissal (for economic dismissal see below) do not require the trade union’s consent (sec. 35, LC).

For dismissals due to disciplinary infractions, a procedure is set out in secs. 135 and 136 of the LC as follows:

• prior to imposing a disciplinary penalty, a written explanation from the employee is required;
• for dismissals on the basis of misconduct, employers are to consider the gravity of the employee’s conduct, the employee’s work record, and all the circumstances of the case before deciding which, if any, disciplinary penalty (including dismissal) to impose (sec. 135, LC);
• disciplinary penalties should be imposed immediately after the misconduct is discovered, and no later than one month from the date of discovery. No penalty may be imposed more than six months from the day the misconduct was committed, or more than two years after the instigation of a financial investigation (not counting the time taken for any criminal proceedings in these time limits);
• only one disciplinary penalty can be imposed for each act by the employee;
• reasons must be given to the employee for any disciplinary penalty; and
• the employee may appeal against any penalty (see below). The body reviewing the penalty shall consider the gravity of the employee’s conduct, the employee’s working attitude, the employee’s work record and previous behaviour and the gravity of the penalty imposed.

After one year, disciplinary penalties short of dismissal are revoked (the employee may also petition for the earlier revocation of the penalty (see sec. 137, LC)).

The consent of the relevant trade union is required for dismissals pursuant to sec. 33 of the LC which are effected on economic grounds (although consent is not required for complete closures).

Moreover, for dismissals on economic grounds, the following procedure is to be followed (pursuant to sec. 40(2), LC):

• the employer is to submit to the relevant trade union information on possible economic dismissals at least three months beforehand;
• employees are to be informed of any pending dismissals at least two months beforehand;
• the employer is to provide the local employment agency with details of the employees to be made redundant at least two months before the dismissals;
• selection for dismissal is to be carried out in accordance with the criteria set out in sec. 34 together with any additional criteria in the collective agreement. According to sec. 34 of the LC, employees with greater productivity and qualifications are given priority in relation to retaining employment. If the productivity and qualifications of various employees are equal, priority against dismissal is given to employees with more than two dependent family members, employees who are the only family member earning, employees with long continuous service at the enterprise, employees who have suffered an employment injury or occupational disease at the enterprise, employees studying while working, disabled veterans and family members of deceased veterans, inventors, spouses of military personnel, and victims of the Chernobyl nuclear power plant disaster (including those who were resettled); and
• the employer, on dismissal, is to propose to the employees alternative work at the same enterprise.

Severance pay

Employees dismissed for economic reasons are entitled to one month of severance pay and to a further two months of wages (sec. 40(3), LC). Employees who have not found employment two weeks before the dismissal are entitled to a third month’s wages.

Two weeks of severance pay is payable for:

• employees who are called for, or enlist for, military service;
• employees who refuse to change location with the employer or are subjected to another change in the basic conditions of employment;
• terminations due to insufficient qualifications or ill health;
• terminations due to another employee being reinstated; and
• employees terminated due to their employer’s breach of legislation or a collective agreement.

Avenues for redress

Labour disputes between employees and employers are generally heard, in the first instance, by a Commission on Labour Disputes (a body elected by the work collective), with an appeal to the City People’s Courts (secs. 201 to 204, LC).

Disputes about dismissals are examined by the Commission if the employee cannot settle the differences with the employer directly, including with the assistance of a trade union.

Applications by employees must be made within three months of the dismissal, although the Commission may extend this time if the deadline is missed due to a “good reason” (sec. 205, LC).

Commissions are to make decisions within ten days. An appeal is possible to the City People’s Courts within ten days of the decision. However, where an employee claims reinstatement, the claim goes directly to the City People’s Courts.

If a dismissal is held to be unjustified, the employee is to be reinstated. A reinstated employee is also entitled to be reimbursed for lost wages.[6] However, an employee may elect to receive compensation rather than to be reinstated. If it is impossible to reinstate the employee, the employee is to receive compensation equal to all of the period he or she is out of work because of the unjustified dismissal.[7]

Further information

• ILO Natlex Russia

[1] There is a definition of “employment” in the Act on Employment of Population of the Russian Federation of 20 Apr. 1996, but this Act contains an extended definition of employment which clearly includes self-employed persons (for the purposes of establishing who is not entitled to an unemployment benefit). Thus it appears that the definition in this Act is not relevant to the categorization of an “employee” for the purposes of protection against dismissal.

[2] This term encompasses all contracts relating to labour, including contracts of employment and collective agreements.

[3] This notice period may be waived by the employer (sec. 31, LC).

[4] Chief executives are sometimes elected to their posts by work collectives (although this is increasingly rare)
and these chief executives can be removed on the request of the regional trade union after a decision by the work collective’s board or general meeting.

[5] As is the case for certain diseases, for which employment must be reserved for a specific period.

[6] By Act dated 21 Mar. 1997, the one-year limit on such reimbursements was lifted.

[7] Again, a one-year limit on this type of compensation was lifted by the Act of 21 Mar. 1997.