Termination of Employment in Russia

1) What types of employment termination are there?

In Russia, labor relations may be terminated in several ways: by mutual agreement of the parties, at the initiative of the employer, at the initiative of the employee (by filing a resignation letter), as a result of termination of the employment contract by virtue of the law, as well as for other reasons specified in the legislation of the Russian Federation.

2) What are the legal grounds for termination initiated by the employer?

The employer has the right to terminate the employment contract on the grounds stipulated by the Labor Law. Dismissal on the employer's initiative is possible only if there is a justified reason related to the employee's performance or behavior. This may include cases where the employee is guilty of violating labor duties or labor discipline. Dismissal may also be due to objective factors related to industrial necessity or the needs of the employer.

3) What are the legal procedures required for terminating an employee?

The law establishes different mandatory requirements for specific cases of termination of employment. However, the general obligations include the issuance of an order on dismissal, a labor book or provision of information on employment, the employer's obligation to make a final settlement with  the employee.

4) What are the mandatory notice periods for termination?

The notice period varies depending on the legal grounds for dismissal. It usually ranges from a minimum of 3 days to a maximum of 2 months.

5) What severance pay and compensation are employees entitled to?

Under Russian law upon termination of an employment contract on any grounds an employee must be paid:

• wages for all time worked but not yet paid up to and including the day of dismissal;
• monetary compensation for all unused vacation time.

The employee may also be entitled to certain additional payments depending on the grounds of dismissal:

• severance payment (in cases provided for by law, an employment  contract or a collective agreement);
• average earnings for the period of employment or lump-sum compensation instead thereof;
• additional compensation for termination of the employment contract before the expiry of the term of dismissal notice;
• compensation to the CEO of the organization in the event of termination of the employment contract in the absence of his/her wrongful acts (or omission), in particular due to a change of the owners of organization (which is applicable to the deputies of CEO and chief accountant too).

6) How should employers handle termination due to poor performance or misconduct?

An employer may dismiss an employee upon its initiative according to Article 81 of the Labor Code of the Russian Federation , in particular, in the event  of:

1. a repeated failure to perform labor duties by the employee without a valid excuse in the presence of the following circumstances concurrently: (a) it is not the first time the employee committed a disciplinary offense; and (b) the employee was subject to a disciplinary action before;

2. a single gross violation of labor duties including absenteeism, appearance  at work in a state of alcoholic, narcotic or other toxic intoxication, disclosure of a secret protected by law, committing theft of other people's property, embezzlement, willful destruction or damage of property at the place of work.

In case of low productivity of an employee, the employer has the right to dismiss him/her on the grounds that the employee does not correspond to the position he/she holds or the work performed due to insufficient qualifications, confirmed by the results of the attestation.

7) What legal recourse is available to employees in case of unlawful termination?

If an employee believes that his/her contract was terminated illegally, he/she has the right to file a statement of claim with the court demanding reinstatement and payment of average monthly salary for forced absenteeism (Article 394 of the Labor Code of the Russian Federation).

It is necessary to apply to the district court within 1 month from the date of handing in to the employee of a copy of the dismissal order (Article 392 of the Labor Code of the Russian Federation).

8) What is the procedure for terminating an employment contract with foreign nationals?

The procedure for terminating an employment contract with foreign citizens is generally the same as the procedure established for Russian citizens, but there are a number of peculiarities.

First, for foreign citizens there are special grounds for termination of the employment contract established by Article 327.6 of the Labor Code of the Russian Federation (e.g., revocation of a work permit, residence permit).

Secondly, the employer must notify the territorial body of the Ministry of Internal Affairs of Russia about the termination of the labor contract with any foreign employee.

Authors: Kritsky Artem, Vladislava Novokreshchenova, Yana Dianova, Khakim Kaipbergenov