Termination of Employment in Uzbekistan
1) What types of employment termination are there?
According to Article 155 of the Labor Code The grounds for termination of an employment contract are:
1. mutual agreement of the parties;
2. expiration of the term of the employment contract;
3. termination of the employment contract at the initiative of the employee;
4. termination of the employment contract at the initiative of the employer;
5. employee’s refusal to continue working due to a change in the ownership of the organization, its reorganization, or change in subordination;
6. employee’s refusal to continue working under new working conditions;
7. employee’s refusal to relocate with the employer to another location;
8. employee’s refusal to transfer, due to health reasons in accordance with a medical certificate, to another position that is not contraindicated to their health, or if the employer has no suitable job available;
9. circumstances beyond the control of the parties;
10. non-election or failure to pass a competitive selection for a new term, or refusal to participate in the election or selection process;
11. grounds stipulated in the employment contract, in cases where the Labor Code or other laws allow for the inclusion of conditions regarding additional grounds for termination of employment in contracts with certain categories of employees.
2) What are the legal grounds for termination initiated by the employer?
As per Article 161 of the Labor Code termination of an employment contract concluded for an indefinite period, as well as of a fixed-term employment contract before its expiration at the initiative of the employer, must be justified.
Justification of the termination of an employment contract means the presence of one of the following reasons (grounds):
1. liquidation of the organization (or its separate subdivision) by decision of its founders (participants) or the body of the legal entity authorized by the founding documents, or cessation of activity by an individual entrepreneur;
2. changes in the number or staff composition of employees of the organization (or its separate subdivision), or of the individual entrepreneur, due to changes in technology, organization of production and labor, or reduction in the volume of work (products, services);
3. the employee's non-compliance with the position held or work performed due to insufficient qualifications;
4. systematic violation by the employee of their labor duties;
5. a single gross violation by the employee of their labor duties;
6. other reasons (grounds) established by the Labor Code and other laws.
3) What are the legal procedures required for terminating an employee?
In Uzbekistan, the legal procedures required for terminating an employee depend on the specific ground for termination as outlined in the Labor Code. In general, when an employer initiates the termination of an employment contract, it must have a legally justified reason in accordance with the Labor Code. The employer is also required to observe the appropriate notice period, which varies depending on the reason for termination, provide written notice to the employee, and ensure the termination is properly documented. Additionally, the employer must make all due payments to the employee, including outstanding wages, compensation for unused leave, and any severance pay if applicable.
4) What are the mandatory notice periods for termination?
The employer is required to notify the employee in writing (with acknowledgment of receipt) of their intention to terminate the employment contract within the following timeframes:
1. At least 2 months in advance, in case of termination due to:
a) liquidation of the organization (or its separate subdivision) by decision of its founders (participants) or the authorized body of the legal entity;
b) changes in the number or staffing of employees caused by changes in technology, production organization, or reduction in the volume of work (products, services);
c) change of ownership of the organization — with respect to the head of the organization, their deputies, chief accountant, and the head of a separate subdivision.
2. At least 2 weeks in advance, in case of termination due to the employee's insufficient qualifications for the work performed.
3. At least 3 days in advance, in case of termination due to the employee's culpable actions (or inaction).
5) What severance pay and compensation are employees entitled to?
Upon termination of the employment contract, a final settlement must be made with the employee. This settlement includes payment of:
1. any outstanding salary;
2. compensation for all unused basic and additional leave;
3. other payments, if provided for by labor legislation, other regulatory acts on labor, or the employment contract.
In accordance with Article 173 of the Labor Code the amount of severance pay in Uzbekistan depends on the employee’s length of service with the employer and must not be less than the following:
1. 50% of the average monthly salary – for employees with up to 3 years of service;
2. 75% of the average monthly salary – for employees with 3 to 5 years of service;
3. 100% of the average monthly salary – for employees with 5 to 10 years of service;
4. 150% of the average monthly salary – for employees with 10 to 15 years of service;
5. 200% of the average monthly salary – for employees with over 15 years of service.
In addition, collective agreements, internal regulations, and the individual employment contract, may establish additional guarantees for employees regarding the payment of severance benefits, at the employer’s expense.
6) How should employers handle termination due to poor performance or misconduct?
Termination of an employment contract due to an employee’s insufficient qualifications is allowed only if the employee is unable to perform the specific work stipulated in their employment contract.
The employee’s insufficient qualifications must be supported by concrete evidence - such as inspection reports, reports from direct supervisors, performance evaluations, attestation materials, or other documentation proving poor work quality, defective output, failure to meet performance targets, and so on.
If the employee performs their assigned duties satisfactorily, termination on this ground is not allowed.
Furthermore, in cases where an employee does not meet the requirements of their position due to insufficient qualifications, the employer is obliged to offer the employee a lower-skilled position that corresponds to their qualifications. If no such position is available, the employer must offer any other available job within the organization.
7) What legal recourse is available to employees in case of unlawful termination?
According to Article 174 of the Labor Code an employee who believes that his/her employment contract was terminated unlawfully may directly appeal to the employer or challenge the termination through the prescribed procedure, including judicial review.
The employee's claims, if his/her employment contract was unlawfully terminated, for reinstatement to his/her previous position and compensation for the material damages caused, as well as compensation for moral damages (if the unlawful termination caused the employee moral or physical suffering), must be granted.
Compensation for material damages caused by the unlawful termination of the employment contract includes:
1. mandatory payment for the period of forced absence (unpaid leave);
2. reimbursement of additional expenses related to challenging the termination (such as consultations with specialists, litigation costs, etc.).
The amount of moral damage compensation is determined by the court based on an assessment of the employer's actions but cannot be lower than the employee’s average monthly salary.
8) What is the procedure for terminating an employment contract with foreign nationals?
In addition to the grounds provided by the Labor Code, the termination of an employment contract with a foreign citizen is also based on the expiration or annulment of the work permit in the Republic of Uzbekistan.
The employment contract must be terminated on the day the work permit expires.
In case of annulment of the work permit, the employment contract must be terminated on the day the employer receives the corresponding notification from the authorized body.
Author: Javokhir Urinov