Recent Employment Disputes

Baker & McKenzie's joint Labour & Migration and Dispute Resolution team in Moscow has summarized several of the most interesting court judgments in the area of employment disputes.

 

A difference in salaries of people working in the same position is not discrimination.

T worked with an insurance company as the head of a customer office. He filed a court claim against his employer with allegations of discrimination at work. In particular, T alleged that his salary had never been increased, although he was moved to a more senior position with different responsibilities. At the same time, people working in the same position at the same company receive larger salaries. T's employer denied the allegations of discrimination. The employer alleged that T performed a smaller scope of work that the other employees and caused losses for the company.

The court dismissed T's claims based on the following reasoning. Under the Russian Labour Code an employee's salary depends on the qualifications of the employee, complexity of the job, quantity and quality of performance, conditions of work. Working in the same position means a similar type of responsibilities. However the same position does not necessarily entail the same scope of responsibilities and the same complexity. As a result, the same position with the same employer does not necessarily mean the same salary. T could make a claim of discrimination only if it was proven that the difference in salaries was not connected with his professional qualities. T however failed to do so. (Supreme Court of the Udmurt Republic, Ruling of August 8, 2011, case No.33-2789/11).

A failure to dismiss a redundant employee after the 2-month redundancy notice term does not lead to extension of the employment.

M claimed wrongful termination by the employer. The trial court granted M's claim. The trial court found that M had received a 2-month redundancy notice. However, following the 2-month term M's employment was not immediately terminated. In the trial court's view, a failure to immediately terminate M and continuance of work by M. led to a de-facto extension of her employment for an unspecified period of time. A new 2-month notice would be required for the employer to revive the redundancy termination.

The upper court reversed the trial court's judgment. The court held that 2 months is only the minimum time period for notice. The employer does not give up its right to terminate the redundant employee some time following the 2-month term. A new 2-month notice is not required either. (Perm Krai Court Overview of Cassation and Supervisory Practice on Civil Disputes for the first half of 2011 (endorsed on Aug 12, 2011 by the Presidium of the Perm Krai Court)).

The former chief executive officer of a company is not entitled to reinstatement if the company has already appointed a new chief executive officer.

D was employed as the general director at First Ural Housing Company. The company's board of directors issued a resolution to terminate D. However, this board resolution was later invalidated by an arbitrazh [commercial] court as the board members did not have the requisite authority to pass this resolution. D filed a claim for reinstatement in the position of general director of the company.

The court dismissed D's claims based on the following reasoning. The owners of the company are free to manage their company. This includes the owners' discretion to select a chief executive officer of the company. Where the owner legitimately appointed a new chief executive officer the court cannot interfere and order reinstatement of the former chief executive officer. In the case at hand, a new general director of the company was appointed after D's termination. The fact that the board resolution to terminate D was invalidated does not by itself make the resolution appointing the new general director invalid. Without a challenge of the resolution appointing the new general director, the court found no grounds to reinstate D at the company. (Sverdlovsk Oblast Court, Ruling of July 21, 2011, case No.33-10106/2011).

An employee may be dismissed for poor performance during the trial period. Disciplining the employee is not a pre-requisite for dismissal based on poor performance during the trial period.

R was employed as an Internet project manager with Moscow-based LLC, Mora-Top. R's employment agreement provided for a 3-month trial period. R was dismissed before the expiry of the trial period for poor performance. R then challenged the employment termination in court.

The court dismissed R's claims based on the following reasoning. The employer is entitled by law to dismiss an employee who did not pass the trial period, provided that the employee is notified at least three days in advance and given an explanation as to why the trial was not passed. It was established by the employer that R had not fulfilled her personal performance plan and played Internet games during office hours on several occasions. R's poor performance was sufficient basis for termination of her employment during the trial period. R's allegations that she had not been formally disciplined for poor performance were dismissed. The court held that disciplining was not required for the purposes of the termination. (Moscow City Court, Ruling of July 26, 2011, case No.33-20661).

For further information please contact in Moscow tel +7 495 787 27 00 Igor Makarov, Evgeny Reyzman, Elena Kukushkina, Anton Maltsev or in Saint-Petersburg tel +7 812 303 90 00 Maxim Kalinin.

Baker & McKenzie

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