Article

St.Petersburg Times, 24 Марта 2009

Redundancy Procedures: Advice From Legal Experts

Since October last year, more than half of all Russian companies have made staff cuts, according to data gathered by ANCOR recruitment agency. Although 44 percent of those who have lost their job have no objection to the redundancy procedures, 31 percent feel that the company behaved dishonestly toward them. According to the review, some former employees think that staff reduction and wage cuts are not justified.

Most people believe that such measures are the result of employer greed and dishonesy, «who try to increase the profitability of their business with the help of accounting and financial machinations instead of increasing the quality of their product and services,» according to the research carried out by ANCOR.

«Our experience shows that people frequently do not know their rights and very often they simply make no effort to defend them, as they don’t see the point in doing so,» said Oksana Kovalyova, senior attorney at Capital Legal Services in St. Petersburg.

Redundancy is a complex procedure, but the Labor Code of the Russian Federation gives employees a number of rights. For example, employees who are the most qualified or productive, or have two or more dependents, or are the only breadwinner in the family have preferential rights for being retained by the company.

«An internal agreement can provide additional grounds for employees to be retained by the company, so this is worth investigating,» said Kovalyova.

There are also categories of employees who cannot be made redundant.
«Among them are pregnant women, mothers with children under three years old, single mothers with children under 14, or 18 if the child is disabled,» said Svetlana Rybalko, head of HR administration and consulting at Coleman Services. «Staff cuts cannot touch employees who are bringing up children without a mother, or those who are on leave looking after the child. Nowadays, this can be any member of the family, including fathers and grandparents,» she said.

Employers are also obliged to offer employees another vacant position in the company before making them redundant. It should be equal to or lower than the employee’s qualifications.

«If an employee is on a list of employees to be made redundant, the employer must give them written notice of the redundancy no less than two months before the termination of the labor contract,» said Rybalko.

«Employees have the right to receive severance payment equal to the employee’s average monthly earnings for two months from the termination date and compensation for unused vacation time,» said Kovalyova.

«In exceptional cases, at the discretion of the job exchange, the employee has the right to receive a third month’s salary if they applied to the exchange within two weeks of the termination date and did not gain employment.»
If the employee consents, the labor contract can be terminated prior to the expiration of the two-month period, but the company is still obliged to pay the worker additional compensation equal to two months’ salary.

Today, however, there is an increasing volume of cases in which the employee is forced to leave their job «voluntarily.»
«Companies do this in an attempt to reduce their financial losses,» said Kovalyova. «In such cases, we advise the employee not to sign any documents or statements of resignation confirming their consent.»
In such cases, the employee can offer the employer a variant in which the contract is terminated, but with some severance pay, according to experts from Coleman Services. The amount of compensation can be negotiated.

«Large Russian and western companies usually try to adhere to the Labor Code over questions of staff cuts,» said Alexandra Yevseyeva, branch manager at THI Selection in St. Petersburg. «But unfortunately some organizations try to minimize their losses, and as a result some violations occur.»

The first violation can be the redundancy itself.

«Some companies try to substitute redundancy procedures with the dismissal of certain employees, considering this way to be easier,» said Kovalyova. «If a genuine redundancy takes place, it must be supported by relevant facts and documentation. Otherwise such redundancies can be disputed and recognized as illegal.»

Employers also violate the law by failing to offer workers vacant positions, give them two months’ notice, or pay the full sum required by law.

«Any of these violations entitle the employee to turn to the labor inspection authorities or courts in order to have the redundancy recognized as illegal, be reinstated at their job and recover compensation for compelled absence or — if the employee does not wish to stay at their job — to recover unpaid severance pay,» said Kovalyova.

Recruitment companies and legal firms offer the same advice to employees who believe their rights have been violated.

«We would like to draw employees’ attention to the fact that according to the Labor Code, an employee is entitled to go to court with a case of wrongful redundancy for one month from the date they received a copy of the redundancy document,» said Kovalyova.