In December 2014, the Russian Employment Code (the “Employment Code”) was supplemented by Chapter 50.1, which sets forth specifics of employment of foreign nationals and persons without citizenship (since the new Chapter does not differentiate regulations between these two categories, both will hereinafter be referred to as foreign citizens or foreign employees). The Chapter contains several new rules and clarifies issues which employers have faced when hiring expatriates. The key points are discussed below.
Scope of Effect
The general provisions of the new Chapter foresee that the employment relations between a foreign citizen and an employer shall be governed by Russian employment law, with the exception of cases where, under a federal law or an international treaty, the foreign nationals’ employment is governed by foreign law (para. one, Art. 327.1). This provision upholds the rule that there may be instances where foreign citizens’ labour is governed by foreign law (although the basic principle is that employment of a foreign workforce in Russia should be regulated by Russian employment law).
The new rules set forth the minimum age when a foreigner is entitled to enter into an employment agreement – 18 years old. Exceptions may be provided for by federal law (para. two, Art. 327.1). The previous edition of the Employment Code had no reference to the minimum age for foreign employees.
Term of Employment Agreement
The Employment Code now clearly states that a foreign national may enter into an agreement with an indefinite term or a fixed term (para. four, Art. 327.1). A fixed term agreement may be concluded if certain circumstances (Art. 59, the Employment Code) are present. Previously, some Russian courts pointed out that foreigners may work under fixed term agreements, only because their work permits are limited in time.
Requirements to the Content of Agreement
According to the new rules, the employment agreement with a foreign national must contain information about the work permit (permit for temporary residence, permit for residence) and details of the voluntary medical insurance policy or agreement for provision of medical services to the employee, concluded between the employer and a medical institution (Art. 327.2, the Employment Code).
It is advisable to include the above information and requisites by signing an additional agreement to the employment agreement. It is also possible to include this data in the employment agreement, based on Art. 57 of the Employment Code. However, it will be necessary to notify the employee of such inclusion. Hence, signing an additional agreement is preferable.
Suspension from Work
The new Chapter sets forth other (in addition to Art. 76 of the Employment Code) grounds for suspension of foreign nationals from work: suspension or expiry of the employer’s permission to hire foreign nationals, expiry of work permit or patent, expiry of temporary residence permit, expiry of residence permit, and expiry of a voluntary medical insurance policy or agreement for provision of medical services to the employee (Art. 327.5, the Employment Code).
Termination of Employment
Some provisions of the new Chapter are devoted to termination of employment with foreign citizens (Art. 327.6). Specifically, the Employment Code provides for additional grounds for termination. Most are concerned with annulment and expiry of the documents that allow a foreigner to reside or work in Russia (work permit, patent, temporary residence permit, etc.). However, suspension, expiry or annulment of the employer’s permission to hire foreign nationals also serves as a basis for termination. Expiry of a voluntary medical insurance policy or agreement for provision of medical services to the employee is also included in the list of grounds for termination.
To some extent, the grounds for termination overlap with the grounds for suspension from work discussed in the previous section. In particular, suspension or expiry of the employer’s permission to hire foreign nationals, expiry of work permit or patent, temporary residence permit, residence permit, medical insurance policy or the medical services agreement, can be grounds for both suspension and termination. Therefore, it is within the employer’s discretion whether to use these grounds for suspension or for termination of the employee.
A question also arises regarding the applicable category for the termination of foreigners. For instance, Russian employment law provides specific categories such as termination at the employer’s initiative, and employees have certain immunities against dismissal on such grounds (e.g., an employer cannot initiate termination of a sick employee, or an employee on vacation, or a woman with kids under 3 years old, etc.). It is our opinion that the new grounds for termination of foreign nationals do not refer to termination at the employer’s initiative. Based on their nature, these grounds relate to general termination grounds (Art. 77, the Employment Code). Therefore, in our opinion, the above immunities are not applicable in case a foreigner is terminated based on the grounds set forth in the new Chapter.
The new law provides that in case a foreign employee is dismissed due to suspension or annulment of the employer’s permission to hire foreign nationals, such employee is entitled to a severance benefit of 2-weeks’ average salary (Art. 327.7, the Employment Code).