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. Last Updated: 07/27/2016

Common Employment Law Infringements

It is no secret that the overwhelming majority of employers whose relationship with their workers is subject to Russian law are unable to boast of full compliance with labor laws. In many cases, this occurs through no ill intent on the part of the employer -- the reason may be ignorance of the specific requirements of Russian law. What "unintentional" labor law infringements are typical for foreign employers or companies with foreign participation?

A common source of problems for foreign employers is their ignorance of the general principle of "no impairment of the employee's legal position." The principle is actually very simple and comes down to a prohibition on establishing and applying any rule that impairs an employee's position relative to the rules established by law. This prohibition operates even when the employee fully consents to such rules. Any rules that are more favorable to an employee than statutory requirements will be valid, but any rules detrimental to employees are illegal and cannot be implemented. Many foreign employers unaware of this principle stipulate additional obligations of the employer to the employee when concluding an employment contract -- "in exchange" for additional obligations of the employee to the employer, without realizing that only the employer will actually be bound by these additional undertakings. This can be illustrated in following example.

Many foreign employers are concerned to find that any employee, even a senior one, may resign and leave the company at any time after giving a mere two weeks' notice (the sole exception is the general director, who is required to give one month's notice). Indeed, in most cases two weeks, or even a month, is insufficient time to select and hire a new candidate (particularly for the most senior management positions) and orient the new employee.

For this reason, employers will make considerable efforts to ensure that the employee will give more notice when resigning (several months, for example). Guided by this understandable desire, an employer may offer its employee a "deal": they will add a provision to the employment contract whereby each party agrees to give the other party much more notice than the law requires (say, six months) of any intention to terminate the employment unilaterally.

Typically, employees will readily agree to an offer to include such a provision in the employment contract. As a result, the company falls into a trap: its "higher" obligation (as compared to the statutory requirement) to give the employee more notice of dismissal will be fully valid and binding upon the company (as one that improves the employee's position), while the higher obligation of the employee (as one that impairs the employee's position) is not only unimplementable, but is also a labor law offense, bringing with it the possibility of administrative penalties against the employer.

Thus, the company ties its own hands: voluntarily waiving its right, in cases provided for by law, to dismiss an employee immediately, and receiving nothing in return.

Therefore, as a general recommendation, employers are advised never to include in an employment contract any provisions that are less favorable than those established by law and to be very cautious in wording privileges and benefits for an employee that go beyond those established by law.

In the overwhelming majority of cases, a labor inspector inspecting a company will find dozens of labor law infringements without much effort -- ranging from the serious (failure to provide employees with annual paid leave, delays in payments due to employees, illegally requiring employees to work on days off) to technicalities. Here are some things that not all companies realize:

• Every employer has to produce and approve special documents -- the Corporate Code of Conduct and a Personal Data Protection Policy -- and inform its employees of these documents against a signature of acknowledgement;

• Correctly completing employee labor books is not enough. A special ledger must be kept that tracks their whereabouts, and on top of that, a ledger must be kept that records the receipt and use of blank work record books;

• Even if a company (or a company's representative office) has only one or two employees on its staff, it has to process a mountain of paperwork: personnel orders, employee data cards, work timetables, payroll calculations and payment ledgers, pay slips.

There is no doubt that a foreign employer confronted with Russian labor law can expect a great number of alarming discoveries. To avoid too great a shock, it is advised that these discoveries be made with the help of a specialist in this area of Russian law.