Employee or Civil Contractor

The services or work of an individual in Russia can be legally hired either by entering into a labor contract according to the labor law or a contract under the civil law, referred to as a civil law contract. A labor contract is regulated by the Labor Code. Civil law contracts are regulated by the Civil Code and thus fall beyond the scope of the labor law regulations. Let’s start with a short explanation on what is a civil law contractor, but we will focus on labor law contractors thereafter.

Civil law contractor

The concept of a civil law contract refers to an agreement whereby a company hires the services of an individual without the intention to enter into a labor contract. The main distinction between a labor contract and a civil law contract is that the hired person does not under the latter construction enjoy the safety guarantees envisioned by the labor law (such as protection against termination at will, overtime and sick leave compensation, and vacations), and is not subordinated to the staff management rules of the contracting organization.

Civil law contract arrangements are used when engaging a freelancer for temporary projects or auxiliary work which is performed from time to time and is of a nature usually performed by contractors instead of staff. A typical situation is when using the services of non-staff translators. Naturally, civil law contracts may also be entered into with persons registered as individual entrepreneurs. When such entrepreneurs in reality are engaged in the given line of business, there is less risk of such requalification.

Agency Work

In Russia, there has long been a common business practice in the labor market of companies providing their employees for permanent work under the control and management of their clients. The employee would be hired at the company provider, receiving wages there, but actually was subordinate to and under the control of another company – the client of the service provider. This scheme allowed customers to significantly minimize any risks associated with the demands of government officials and employees with respect to the labor of the employee for a fee to the provider.

However, this practice has been recognized by the legislature as flawed. It considered unacceptable the division of the figure of employer into two companies (provider and client), because the employee was not protected from failure by the client and the provider to fulfill all the obligations of an employer provided by the Labor Code of Russia.

Indeed, the Russian Labor Code did not provide for such an employment arrangement previously, although it did not directly prohibit it either.

On Jan, 1^st 2016 a new law came into force, which introduced a direct ban on agency work, which refers to work performed by an employee on the orders of the employer but in the interests, and under the direction and control of another entity (the client of the provider). The same law introduced the concept of private employment agencies, which are subject to accreditation and the right to conduct activities for the provision of temporary workers to perform work for the benefit of, and under the management and control of, another entity.

As of then, only the following entities would be entitled to provide exclusively temporary staffing:

– Private employment agencies with a special state accreditation;

– Other companies, including foreign ones, when employees are sent temporarily to:

• A legal entity affiliated with the party sending employees (so-called secondment)
• A joint stock company, if the sending party is a party to a shareholder agreement for exercising the rights certified by the shares of such joint stock company
• A legal entity which is a party to a shareholder agreement with the sending party

Other entities are not entitled to send their staff to work at third parties. The maximum period for which temporary staff can be provided by a private agency in a number of cases is 9 months.

Private employment agency

Private employment agencies are understood to mean legal entities registered in Russia that are accredited to conduct staffing. Such agencies must have charter capital in excess of 1,000,000 rubles and a qualified head with experience in that sphere of work.

A private employment agency may send its employees to work temporarily for another party only in the following cases:

–  If employees are sent to an individual for personal care and provision of domestic services

– If employees are sent to an individual entrepreneur or a legal entity for temporary performance of duties which are usually performed by employees who are currently absent, but for whom their jobs are held open to them while they are absent.

– If employees are sent to an individual entrepreneur or a legal entity to perform work related to the temporary (up to 9 months) expansion of production or services rendered.

The law provides for cases where the use of staffing is prohibited. Among such cases is the use of staff to replace employees taking part in a strike.

There are also some negative consequences for companies using staffing.

Special Types of Labor Contracts

The typical labor contract presumes that the employee comes daily to an office or other premises of the employer, and that work is performed in or on such premises as the sole employment of the employee. However, there are various situations where work is conducted in a different setting or under different circumstances. Such circumstances are, for example:

• Domestic work
• Remote Work
• Apprenticeship agreement
• Work at remote places in long-term shifts
• Combining jobs
• Seasonal jobs
• Other special forms of employment

Domestic Work

The Russian Labor Code contains special provisions regarding domestic workers, i.e., persons who are employed by a company, but perform the work at home (Chapter 49 Labor Code).

Domestic work is regulated by the general rules of the law, but a certain amount of flexibility is allowed. The domestic worker can involve his family members in the work, but no labor relationships emerge between them and the employer (Art 310 Labor Code).

Remote Work

This new law represents a significant change and modernization of the Russian labor laws, for it is for the first time legal to arrange work on a remote basis at an employee’s home. This also allows a lot of possibilities as well as flexibility in the labor contract. Most importantly it allows setting the conditions for termination of employment more freely without being restricted by the closed list of grounds for termination as per the general provisions of law. (There remain in the Labor Code prior provisions about so-called “domestic work”, but these provisions have had limited effect and have not in fact regulated the situation where employers hire people to work at their homes or otherwise remotely outside the office.)

The new law stresses the need to organize communication through means of modern IT telecommunication facilities by making it a necessary condition for remote work to use the facilities of various channels of IT telecommunication networks, including the Internet, to perform the work and to interact with the employer.

Apprenticeship Agreement

An Apprenticeship Agreement for professional on-the-job training may be entered into with job candidates and current employees (Chapter 32 Labor Code).

The apprenticeship can take the form of individual or group training, and it can be organized either on a full-time or part-time basis.

Through the agreement apprentices may be fully exempt from their main job or they may perform their main job on the basis of reduced working hours (Art 203 Labor Code). During the apprenticeship an apprentice cannot be asked to work overtime or be sent on business trips which are not connected with the subject of the training (Art 203 Labor Code).

Upon successful conclusion of the training, an apprentice shall join the company as an employee without undergoing a trial period (Art 207 Labor Code).

If the apprentice does not accept the agreed job without a legitimate reason after the apprenticeship agreement is over, he will be liable to return the compensation received during the apprenticeship as well as other expenses incurred by the employer. In light of Russian court practice, we would want to raise doubt regarding the possibility of enforcing this provision.

Long-Term Shifts at Remote Places

Long-term shifts at remote places is a form of employment under which the employee is sent to work at a place distant from his usual place of residence so that he cannot return every day to his home (Chapter 47 Labor Code).

This form of employment is meant for situations where work has to be done in scarcely populated places or areas with extraordinary constraints set by nature.

Workers under the regime of long-term shifts at remote places have to be returned home at least once a month or in exceptional cases once every three months (Art 299 Labor Code).

Working time under this form of employment is calculated according to special rules relating to recording of work time on a summarized basis.

Combining Jobs and Professions (Offices)

In Russia, employees are permitted to take an additional job(s) with the same or another employer. The Labor Code contains special and detailed provisions regulating the situation where an employee is performing regularly paid work when he is free from his main occupation.

Combining jobs is regulated by Article 60.1 and Chapter 44 of the Labor Code. The law draws a clear line between the main job and the supplementary job. The supplementary job must not interfere with the duties at the main job. Moreover, it should be separate from the main one (in another profession or office). (The practicability of the latter requirement is dubious.)

There can be two sorts of combining jobs: if the employee simultaneously takes another job with the same employer, exceeding the limits of his regular working time, it is considered as an internal combining of jobs. External combining of jobs means working for another employer outside the work hours devoted to the main job. Any combining of jobs requires entering into a special labor contract.

An employee in Russia is now allowed to take employment with as many employers as he wishes. It should be noted that this freedom makes the restrictions regarding the maximum duration of working time (per day or per week) virtually useless. Now such restrictions look like mere lip-service to trade unionism and the “social state”.

There are a few other issues regulated separately in regard to combining jobs are.

Combining of professions (offices) is envisaged by Arts 60.2 and 151 of the Labor Code. This means additional work for the same employer in another position within the limits of usual working hours. Unlike the case of combining jobs, a new labor contract is not required, but employee’s consent in writing is necessary.

Apart from combining professions (offices), an employee can be assigned additional work of the same nature as his regular work (that is, the office and working time is the same, but the volume of work is increased). Such situations are defined by the Labor Code as 1) an expansion of zones of service, 2) increase of the workload, or 3) the performance of job duties of an absent employee without release from the work envisaged by the labor contract (Art 60.2 Labor Code).

Any kind of additional work entails additional remuneration which amount is to be defined by the employer and employee (Art 151 Labor Code).

Casual and Seasonal Jobs

Casual jobs are those that last no longer than two months (Art 59 Labor Code). They are regulated by Chapter 45 of the Labor Code. A probationary period is not set for employees in such contracts (Art 289 Labor Code). The holiday entitlement under this form of work is two days of paid leave for each month of work (Art 291 Labor Code). As a rule, casual workers are not entitled to severance pay. A labor contract entered into to fulfil a particular job is terminated upon the completion of that work (Art 79 Labor Code). Employees may terminate the labor contract early by giving 3-day notice (Part 1 Art 79 Labor Code). The employer may terminate the labor contract early only in those cases specified in the law, and must give the employee notice of not less than 3 days.

Seasonal jobs may comprise only jobs which, as a rule, last for a period of up to 6 months and which can be performed only during a certain time of the year due to the conditions of the climate or other special conditions of nature (Art 293 Labor Code). The work of seasonal employees is regulated by Chapter 46 of the Labor Code.

The Labor Code has delegated the right to specify the nomenclature of such seasonal jobs which may exceed this 6-month limit, as well as their maximum duration, to the level of the federal industrial agreements entered into between employers and employees (or, usually, their representatives).

The labor contract must spell out the seasonal nature of the work (Art 294 Labor Code).

In the event of liquidation of the entity or downsizing, the employer has to give notice seven calendar days in advance for dismissal of employees doing seasonal jobs.

In the event of liquidation of the entity or downsizing, the severance pay will be equal to two-weeks of salary for an employee who is doing a seasonal job (Art 296 Labor Code).

If the labor contract is terminated before its expiration at the initiative of an employee who was doing a seasonal job, the employee must notify the employer not later than 3 calendar days in advance.

An employee doing a seasonal job is granted 2 vacation days for each month of work.

Other Special Forms of Employment

In addition to the above-described situations of special types of employment, the Labor Code provides special regulations for particular jobs or professions. These affect:

• Drivers (Chapter 51 Labor Code)
• Employees engaged in work underground (Chapter 51.1 Labor Code)
• Teachers and public education employees (Chapter 52 Labor Code)
• Russian diplomats and employees at diplomatic missions and other Russian state missions abroad (Chapter 53 Labor Code)
• Religious employees (Chapter 54 Labor Code)
• Athletes and coaches (Chapter 54.1 Labor Code)
• Defense employees (Art 349 Labor Code)
• Employees of government corporations and government companies (Art 349.1 Labor Code)
• Employees of organizations created by the Russian Federation on the basis of the law in accordance with a special procedure (Art 349.2 Labor Code)
• Medical employees (Art 350 Labor Code)
• Staff of the film industry, theater, orchestras, circuses (Art 351 Labor Code)
• Those who work with children (Art 351.1 Labor Code)
• Employees engaged in work connected with the preparation for and conducting of the World Cup FIFA 2018 and FIFA Confederations Cup 2017 in the Russian Federation (Art 351.2 Labor Code)
• Experts in the field of special assessment of working conditions (Art 351.3 Labor Code)

Pursuant to the Labor Code, the Federal Government and relevant ministries have issued more detailed regulations affecting the work of some industries and particular professions.

Due to the special geographical and climatic conditions of the Russian Far North Regions, the Labor Code includes special provisions for work in those regions and other regions with similar conditions. Employees in these regions receive extra compensation in salary, severance pay, pension and social rights, including extended vacation, etc.

The Labor Code regulates separately situations where a natural person is an employer (Chapter 48).