The above laws include the following amendments:
- the right is secured for termination payment in the amount of an average monthly salary of an employee dismissed due to liquidation;
- if the period of job-placement of an employee dismissed due to liquidation or personnel redundance lasts more than one month, the employee’s right to an average monthly salary before completion of liquidation is provided;
- employer is obliged to maintain average monthly salary of an employee dismissed due to liquidation or personnel reduction for the third month after employee’s dismissal provided there’s a relevant resolution of employment service;
- employer is entitled to pay one-time termination payment within company’s liquidation or personnel reduction instead of average monthly salary for the employment period;
- employee who failed to find a job within the second and third months after his dismissal due to liquidation or personnel reduction can apply for average monthly salary after the end of each monthly period of employment;
- when filing a liquidation application an employer shall confirm that all the payments provided under labour legislation of the Russian Federation were effected to the benefit of employees dismissed due to liquidation.
The Federal Law № 203 FZ “On the introduction of amendments to article 21 of the Federal law “On state registration of legal entities and individual entrepreneurs” (hereinafter – Law № 203) and the Federal Law № 210 FZ “On the introduction of amendments to the Labour Code of the Russian Federation regrading provision of guarantees to employee dismissed due to liquidation of a company” (hereinafter – Law № 210) were published on July 13, 2020; these federal laws are expected to enter into legal force on August 13, 2020. Such federal laws are interconnected since they amend liquidation procedures in terms of payments to employees.
The Law № 210 amends current wordings of article 178 of Labour Code of the Russian Federation. In particular, the Law № 210 acknowledges the following guarantees to employees:
- termination payment due to liquidation or personnel redundance;
- average monthly payment for the second month after employee’s dismissal or a part thereof in proportion to employment period of this month;
- average monthly payment for the third month after employee’s dismissal or a part thereof in proportion to employment period of this month in exclusive cases at the decision of employment service.
Herewith, the Law № 210 specifies that a dismissed employee shall apply for payment within fifteen working days from the end of the second month after his dismissal or from the end of third month after the employment service adopted the decision. Employer shall make all the payments within fifteen days from employee’s application.
Under the Law № 210 employer can determine the procedure for making payments to its employees. Employer is entitled to pay one-time termination payment in the amount of two monthly payments instead of average monthly salary for the first and second month after dismissal. Therefore, an employer has an opportunity to effect all the payments efficiently and complete the liquidation.
Similar rules are provided in terms of employees of companies located in Far North and equivalent regions. The Law № 210 also acknowledges a longer employment period, within which employees in Far North and equivalent regions can receive average monthly payment: for the first three months in a general way and for the fourth, fifth, sixth months by decision of employment service. The procedure for effecting such payments is in line with procedure established for the rest of employees. An employee shall apply to his employer within fifteen days from the expiry of each period of employment (second-sixth month after dismissal), employer has the right to pay one-time termination payment which equals to five monthly payment.
The key amendment provided in Law № 210 is that all payments (average monthly and/or one-time payment) shall by any means be effected before completion of liquidation. This provision was introduced due to the negative practice. Such practice included cases when the company had been liquidated by the time employee applied for payments. The Constitutional Court in its Regulation № 45-П dated December 19, 2018 “On case on examination of constitutionality of article 178 of the Labour Code of the Russian Federation in connection with appeal by Miss Trofimova M.V.” found the procedure for effecting payments under article 178 of the Labour Code unconstitutional. The court stated that “the Labour Code lacks the procedure for liquidation of legal entities compliant with civil legislation on liquidation of legal entities, which indicates a regulatory gap in labour legislation. Such gap entails violation of the following rights of employees who were dismissed due to liquidation: rights to average monthly payment for the employment period if such period does not exceed to months (including termination payment), if information on termination of the company that was a party to the labour contract had been included in the unified state register of legal entities by the time employees acquired such right.”
Law № 210 amended the Federal law “On state registration of legal entities and individual entrepreneurs” to ensure enforcement of legal position prepared by the Constitutional court. Under such amendments application for liquidation shall contain a confirmation that all the payments to workers dismissed due to liquidation had been effected.
Neither the Law № 203, not the Law № 210 introduce new payments to employees’ benefit, therefore, these laws will not put any additional financial burden on the employer. The above laws merely provide for tools aimed at ensuring guarantees to employees of liquidated entities that are already present in labour legislation.