2. FEDERAL LAW No. 90-FZ “ON AMENDMENTS TO THE LABOR CODE OF THE FUSSIAN FEDERATION, INVALIDATION OF SPECIFIC STATUES OF THE USSR ON THE TERRITORY OF THE RUSSIAN FEDERATION, AND INVALIDATION OF SPECIFIC STATUTES ( PROVISIONS OF STATUES ) OF THE RUSSIAN FEDERATION ” was issued on 30.6.2006.
The Federal Law is to take effect within 90 days after its official publication.
More than 300 Articles of the Labor Code of the Russian Federation were changed and amended, many of which are fully set out in a updated version, as well as new Articles were introduced. Most of the amendments and changes are intended to get rid of the existing discrepancies and inaccuracies previously detected in the regulations of the Labor Code.
The Labor Code provides more detailed regulation of local regulations adopted by employers, namely on representation of employees’ interests by primary trade union organizations; on employers as natural persons; on termination of labor contract; on changes of terms and conditions of labor contract previously agreed upon between the parties; and some other issues.
New requirements were established with regard to the contents of labor contract. In particular, any labor contract should specify information on documents identifying the employee and the employer as natural person, taxpayer id. number of the employer ( exclusive of employers as natural persons other than individual entrepreneurs ), information on the employer’s representative sighed the labor contract, and the reasons for his having been delegated the relevant authority. A particular type of work that can be assigned to the employee was specified among the terms and conditions to be included into the labor contract on compulsory basis. A procedure for adding lacking information and terms and conditions to the labor contract were developed. Where, however, the labor contract lacks any mandatory terms and conditions, it shall not be deemed a aground for acknowledgment of loss of contract. Lacking information shall be added directly to the text of the labor contract, while lacking terms and conditions shall be either included as an attachment to the labor contract or formalized as a separate agreement between the parties to be entered into in written, which shall be deemed an integral part of such labor contract.
Lack of a probation clause in the labor contract shall mean that the employee has been employed without any probation needed. Where, however, the employee has been actually accepted for work without any labor contract ( Part 2, Article 67 ), the probation clause may be included into the labor contract, provided that the parties have formalized it as a separate agreement prior to the commencement of work. In addition to the existing restrictions, women having children at the age of up to 1.5, and persons concluding labor contract for a period within two months shall not be subject to probation period.
Fixed-term labor contracts were subject to changes as well. In the cases specified in the Labor Code, the fixed-term labor contract may be entered upon arrangement between the parties without taking account of the nature and conditions of the previous employment ( for example, with old age pensioners, students ). Pursuant to the introduced amendments, the fixed-term labor contract may be entered upon with an old age pensioner only if the latter has been employed. With regard to fixed-term labor contracts in the field of small business, they shall be entered upon provided that the number of employees is not beyond 35 persons, including 20 persons in retail trade and in customer services ( the previous version specified 40 and 25 persons respectively ).
Where, however, the employee has not commenced his/ her work on the day of work specified under the Labor Code, the employer is entitled to cancel the corresponding labor contract. However, such cancellation of the labor contract shall not, in accordance with the amendments made, forfeit the employee’s entitlement to social security under the mandatory social insurance scheme on loss occurrence in the period between the date of labor contract till the date of cancellation of the same.
Amendments were made to the list of grounds for termination of labor contract under the circumstances beyond the control of the parties, namely, disqualification or any other administrative penalty, as well as expiration, suspension or withdrawal of employee’s special right, if it makes impossible for the employee to perform his / her duties; termination of access to a state secret if the duties are subject to such an access; reversal of any court’s judgment or a decision of the state labor inspection on reinstatement in a job.
A new article was introduced, which provides regulation of a general procedure for formalization of termination of labor contract, which determines that the employee must be notified against his/ her signature of the employer’s order ( instruction ) on termination of his/ her labor contract.
Employers operating as individual entrepreneurs, like legal entities, shall be subject to an additional obligation of keeping work record cards for their employees. Individual entrepreneurs shall be deemed equal to organizations with regard to other rights and obligations ( in respect of conclusion of labor contracts, dissolution of labor contracts, etc. ).
The meaning of posting an employer to another job was changed. It is specified in the amended version that posting to another job means both permanent and temporal changes in the initial job description of the employee. The meaning of posting also covers changes in the structural unit to which the employee is attached ( provided that such structural unit is specified in the labor contract ), while such employee continues to be attached to the same employer, as well as posting of the employee to work at any other location jointly with the employer. Subject to extraordinary cases, the employer in any case shall obtain a written consent from the employee in this respect. A new regulation was amended to the Labor Code, under which the employee may, under a written bilateral agreement between the parties, be posted to perform some other job for the same employer for a period not exceeding one year, if such posting is made to replace a temporarily absent employee, who is duly entitled to retain his/ her job later, until such employee returns to resume his/ her job. Where, however, upon expiration of such posting period the employee has not been provided with his/ her previous job, while he/ she makes no claims to be provided with such and continues to work, the terms and conditions of temporal posting shall cease to be in force, and the posting shall be deemed permanent.
It is specified in the amended version that unauthorized absence at work as a ground for dismissal means not only the absence at work without due reasons for a period exceeding 4 consecutive hours during a working day ( shift ), but also the absence at work without due reasons throughout the entire working day ( shift ), which, probably, relates to the fact that duration of such shift can not be less than 4 hours as well.
It is stipulated in the Labor Code that disclosure by some employee of personal data of other employee obtained during execution of duties, shall be construed as disclosure of a secret protected by law, which may lead to dismissal of such employee.
Amended was the procedure for calculation of the average daily wages for the purpose of leave payments and compensation for carry-over leave: the amount of average wages will be calculated for the latest 12 calendar months by dividing the amount of accrued wages by 12 and by 29,4 ( the average number of calendar days ). Updated was the procedure of replacement of annual paid leave with cash compensation which only may be used for replacement of a part, which exceeds 28 calendar days, of each annual paid leave or any other number of days within such part.
It was determined that employees ( subject to salary paid employees ) are subject to additional remuneration for public holidays on which they have been not engaged at work, which shall be calculated under collective agreement, contracts, in-house regulation, or labor contract. However, the amounts of costs incurred through such remuneration shall in full be charged to labor costs. In addition, an amendment was made under which the Russian Government’s regulations concerning carrying forward day-off dates to other dates in the upcoming calendar year shall be subject to official publica tion one month prior to the fist date of the corresponding calendar year. Where, however, such a regulation has been adopted within the calendar year, it must be published not later than two days prior to the calendar date of the holiday to be introduced.
A new article was introduced, which deals with the issue of labor remuneration of the employees employed at public agencies and municipal bodies. The Government of Russia may determine, on the basis of occupational qualified groups of employees, minimum base salaries and wages to be paid to the employees employed at public agencies and municipal bodies.
The Labor Code was amended by an article regulating compensation for business travel cots incurred by employees whose duties require constant or frequent traveling, as well as field and expeditionary types of work.
The updated version sets out a list of cases providing for payment of termination benefit equal to the average two-week income, which also is payable in the event of dissolution of labor contract due to employee’s refusal to continue his/ her work as a result of changes in the terms and conditions of the labor contract previously agreed upon by the parties.
More details were introduced with regard to the grounds for termination of the apprenticeship agreement which may be terminated upon completion of the apprenticeship term or on the grounds provided for by the apprenticeship agreement.
Numerous amendments were made to Section ‘Labor Protection’ of the Labor Code: a new article on carrying out a state expertise of labor conditions was introduced, and the procedure for investigation into labor accidents was updated.
Updated was the procedure for compensation for the costs incurred by the employer on training of his employee in case of his/ her dismissal without due reason prior to expiration of the term specified in the labor contract or any agreement on employee’s training on account of the employer. The employee must compensate for such costs. The amount of such compensation shall be proportional to the period of work which the employee has failed to actually complete after the completion of training.
A significant amendment was made to Article 236 of the Labor Code. From now it determines that where the employer has failed to pay in due time wages, leave, termination benefit and other payments due to the employee, the obligation for payment of the specified cash compensation shall arise irrespective of the employer’s fault.
Pursuant to Article 284 of the Labor Code, the duration of working hours under off-hour job must not exceed 4 hours a day. It is stated in the updated version of the Article that on the days when the employee is duly free from his /her full-time duties, he /she may have full-time working day under such work off-hour job ( shift ). Within one month ( other period under review ), the duration of working hours under off-hour job must not exceed half of the working hours rate ( the working rate over any other period under review ) determined for the corresponding category of employees. These restrictions imposed on the duration of working hours shall not be applied to the cases when the employee suspends its work at the place of work he /she is normally attached to ( for a period of more than 15 days ) due to back pay or temporal suspension from his /her duties.
Furthermore, some other amendments were made to the Labor Code. The USSR laws and regulations were found invalid on the territory of the Russian Federation, as well as the laws and regulations of the Russian Federation ( Federal Laws ‘On Collective Agreements and Contracts’, ‘On the Procedure for Resolution of Collective Labor Disputes’, and ‘On the Principals of Labor Protection in the Russian Federation’), which had ceased to be relevant due to the amendments made were repealed.
II. REGUALTIONS issued by the GOVERNMENT of the Russian Federation 1. REGULATION No. 455 “ON APPROVAL OF RULES OF APPLICATION OF ZERO TAXATION INTEREST RATE ON VALUE ADDED TAX IN SELLING GOODS (WORKS, SERVICES) FOR OFFICIAL USAGE BY INTERNATIONAL ORGANIZATIONS AND THEIR REPRESENTATICVE OFFICES PURSUING THEIR ACTIVITIES ON THE TERRITORY OF THE RUSSIAN FEDERATION ” was issued on 22.7.2006.
The Regulation is to take effect on the day of its official publication and applicable to all legal relations which have arisen since 1.1.2001.
Zero taxation interest rate on the value added tax shall be applied to goods (works, services) sold for official usage by international organizations and their representative offices pursuing their activities on the territory of the Russian Federation entered into the list determined by the Ministry of Foreign Af fairs of the Russian Federation in conjunction with the Ministry of Finance of the Russian Federation under international agreements providing for exemption from VAT paid by an international organization or its representative office to suppliers of goods ( works, services) since 1 January 2001, shall be refunded to such international organization ( its representative office ) by virtue of an application to be submitted to the tax authority at the place of its location.
III. ORDERS AND LETTERS 1. THE FEDRAL TAX SERVICE OF THE RUSSIAN FEDERATION issued letter No. ГВ-602/673@ on 4.7.2006 “ON DISSEMINATION OF LETTERS No. 03-11-02/62 DATED 15.3.2006, No. 03-11-02/100 DATED 28.4.2006 AND No. 03-11-02/144 DATED 20.6.2006 ISSUED BY THE MINISTRY OF FINANCE OF THE RUSSIAN FEDEERATION. ” The Ministry of Finance of the Russian Federation provided explanation concerning the issue of taxation of incomes generated by taxpayers of the single tax on imputed income from participation in ordinary partnership.
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