Staff Redundancy in Russia: Notice, Offers of Other Work and Severance

A Russian employer who cuts staff must follow a fixed order. Under Article 180 of the Labour Code (TK), the employee has to be warned personally and in writing, with a signature, at least two months before dismissal, and before the dismissal the employer has to offer every suitable vacancy in the same locality that the employee can fill. After dismissal, Article 178 gives the employee severance equal to one average monthly salary, with possible payments for the second and third months while he is looking for a new job.

For a foreign executive or an employee of a foreign-owned company, these rules apply in the same way as for anyone else employed under a Russian employment contract. This guide explains the steps that make a redundancy lawful, the money the employee is entitled to, the typical defects that lead to reinstatement and the time limits for going to court.

Order of Steps for the Employer

The employer decides to reduce positions and issues an order that sets the new staff structure and the date from which the reduction takes effect. Each affected employee receives a personal written notice at least two months before the dismissal, and the notice must be signed by the employee. If the employee refuses to sign, the employer records the refusal in an act with witnesses.

During the notice period the employer must offer the employee every vacant position in the same locality that matches his qualification and, in the wording of Article 81(3), lower or lower-paid jobs that he can perform given his health. Article 180 refers to this duty, and a transfer requires the employee's written consent. In practice the offers are made in writing and, as commentators note, are repeated if new vacancies appear before the dismissal.

The employer also has duties toward the employment service. According to the commentary, the written notice to the service is sent at least two months before the measures begin, and three months where mass dismissals are planned.

The Two-Month Notice and Early Termination

The notice must name a specific date of dismissal. A notice without a date or with a date that falls earlier than two months is defective, and the employee can challenge the dismissal on this ground.

Article 180 allows the employer to dismiss the employee earlier with his written consent. In that case the employer pays an additional compensation equal to the average earnings for the time that remained until the end of the notice period. This compensation is paid on the day of dismissal together with the severance pay.

An employee who is offered an early exit should read the document carefully. The consent must be written and voluntary, and the compensation must reflect each day of the unexpired notice.

Severance and Payments During the Job Search

Article 178 gives the dismissed employee severance equal to the average monthly earnings. If the employee remains unemployed after the first month, the employer pays the average earnings for the second month, or for the part of it that corresponds to the time without work.

The third month is paid only in exceptional cases and only if the employment service decides so. The employee must apply to the service within fourteen working days after the dismissal and remain unemployed for two months.

The Article also sets the time limits for requests. A written request for the second month can be submitted up to fifteen working days after the end of that month, and the employer pays within fifteen calendar days after the request. Instead of the payments for the second and third months, the employer may pay a lump sum equal to two average monthly salaries.

Defects That Lead to Reinstatement

Courts reinstate employees when the employer skips a required step. The commonest defects are no real reduction of the position, a notice delivered less than two months before the dismissal, no offer of available vacancies or an offer made only once at the start while new vacancies appeared later.

A further defect arises when the employer dismisses the employee and hires another person into a similar position soon after. The court then asks whether the reduction was genuine. Documents about the staff structure before and after the change are central evidence.

Certain employees receive special protection from dismissal on this ground, and the Code lists them. An employer who ignores a protected status has no defence if the status is proved.

Foreign Managers and Remote Employees

A foreign national who is employed under a Russian employment contract is dismissed under the same Articles, and the contract cannot deprive him of the notice or the severance. A manager of an organisation has additional grounds of dismissal in the Code, but redundancy of the whole staff structure still requires the notice and the offers of other work.

An employee who works remotely from another country is still bound by the Russian procedure if the contract is governed by Russian law. The notice may be delivered electronically where the employer and the employee have agreed on electronic documents, but the employee's signature or confirmation of receipt remains the proof that the two months started on a particular day.

A dispute about the amounts paid in a foreign currency or through a foreign entity needs a careful review of the contract, because the severance is calculated from the average earnings that the employer actually paid under the Russian contract.

Time Limits for Going to Court

Article 392 of the Labour Code sets a one-month period for disputes about dismissal, counted from the day the employee received a copy of the order or the work record or the information on employment. The general period for other labour disputes is three months, and for unpaid wages and other sums it is one year.

A missed period may be restored if the reason is valid, and ignorance of the law is not a valid reason. An employee who is abroad when the dismissal order arrives should note the exact date of receipt and send the claim promptly.

The Employee's Checklist

Keep the notice and the offers of vacancies, the order of dismissal, the payslips for the last twelve months, the employment contract with all amendments and the proof of the date on which each document was received. Compare the severance calculation with the average earnings that the payslips show.

Do not sign the dismissal documents with a statement that you have no claims unless the sums are correct. A signature can be used by the employer in the dispute.

The attorney reviews redundancy notices and severance calculations for employees and advises companies on steps that keep a reduction lawful. The first review covers the notice, the offers made and the payroll data.

The main channel of communication with the attorney is email: attorneypetrova1@gmail.com.