On Recent Employment Disputes


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


1. An employee's heart attack at work was not regarded as an industrial accident. As a result, the employer was relieved from payment of compensation of 200 times the monthly salary.

U., a security guardian at Sberbank, died from a heart attack at his workplace. U.'s spouse filed a lawsuit against Sberbank claiming compensation equivalent to 200 times the deceased's monthly salary (as provided in U.'s employment contract) and other sums.

The trial court granted the lawsuit. However, the judgment was reversed at a cassation appeal. The cassation court gave the following reasoning for the reversal. The claimed compensation was payable in the event of death and injury in the course of fulfillment of U.'s job duties. Under U.'s job description, his job duties included protection of Sberbank's property from armed attacks, intrusion by strangers, fire, accidents. It was established that U. had died from a heart attack resulting from coronary heart disease. This is a general type of disease rather than a disease resulting from the fulfillment by U.'s of his job duties. As a result, Sberbank had no obligation to pay the compensation claimed.

2. More work experience does not prohibit an employer from dismissing an employee during staff redundancy.

G. disputed her staff redundancy termination. As part of her claims, G. alleged that her fellow employees had not been made redundant, although G. had a longer employment history.

The court dismissed G.'s claims based on the following reasoning. Those redundant employees who have higher qualifications and higher performance (productivity) are given preference when being kept at work. In the case at hand, G. and her fellow employees had the same education. In the mean time, G.'s performance was worse than that of the others. In particular, she worked with old equipment, mostly involving manual labor. G. did not have the necessary skills to work with robotized production lines. As a result, G.'s performance was worse than that of the other employees. A longer employment track record alone, as claimed by G., is not sufficient to claim preference.

3. An employer's claim against an employee who bought personal airline tickets and paid hotel bills at the employer's expense was rejected due to the employer's insufficient control of expenses.

G. worked as a counsellor to a general manager. At the request of G., his fellow employees booked and paid for airline tickets for G. to Frankfurt, Hamburg and Milan from the company's bank account. Thereafter G. had a tour of these cities and used a corporate credit card to pay the hotel bills. The employer discovered that G.'s trip was not justified and fired G. for absenteeism. Further the employer made a claim against G. to recover the sums paid for the tickets and hotels.

The courts dismissed the employer's claim based on the following reasoning. The employer paid for G.'s airline tickets voluntarily. G. did not misappropriate the employer's funds to pay for the tickets; it was the employer's own action (payment from the company account). The employer could have not paid if it considered that G. had no business reason for the disputed trip. There was no evidence otherwise.

After returning to Russia from the trip, G. filed a business expense report and provided the company with the hotel bills confirming the use of the corporate card for payment. The company did not have an internal regulation regarding the permitted use of the card. G. was not specifically informed that payment of these hotel bills by corporate credit card was prohibited. Therefore, G.'s use of the corporate card to pay the hotel bills was considered lawful.

4. An employer at its own discretion may choose who of the redundant employees will occupy a vacant position.

Y. was dismissed by his employer, OAO Spbaep, due to staff redundancy. Y. claimed wrongful termination. Among other arguments, Y. alleged that the employer was in breach of the staff redundancy procedure. In particular, the employer had had vacant positions, which Y., in his view, was eligible for. In the meantime, these vacancies were taken by S. and B. who did not meet the qualification criteria set by the employer for these positions. Y. alleged that he should have been given preference.

The court ruled that employees of higher qualification may be given preference over other employees in the course of staff redundancy. However, this is only for retaining the old position. There is no statutory preference regarding filling a vacancy. Consequently, it is the employer's discretion to choose which of the redundant employees should take the vacant position. In addition, the rule of preference may apply only to employees having the same position with the company, not to employees having different positions.

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

Baker & McKenzie