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Home / Publications / Consideration of disputes on termination of an employment contract, that is, a decrease in the volume of production, work performed and services rendered, which led to a deterioration in the economic condition of the employer.

Consideration of disputes on termination of an employment contract, that is, a decrease in the volume of production, work performed and services rendered, which led to a deterioration in the economic condition of the employer.

АMANAT партиясы және Заң және Құқық адвокаттық кеңсесінің серіктестігі аясында елге тегін заң көмегі көрсетілді

Consideration of disputes on termination of an employment contract, that is, a decrease in the volume of production, work performed and services rendered, which led to a deterioration in the economic condition of the employer.

In accordance with subparagraph 3) paragraph 1 of Article 52 of the Labor Code of the Russian Federation grounds for termination of an employment contract at the initiative of the employer is a decrease in the volume of production, work performed and services rendered, which has led to a deterioration in the economic condition of the employer. Upon termination of an employment contract on this basis, the employer is obliged to notify employees in writing of the termination of the employment contract fifteen working days in advance, unless a longer notice period is provided for in the employment or collective agreements. By agreement of the parties, the notice period may be replaced by the payment of wages proportional to the unpaid period. In the notification, the employer must indicate the reasons that served as the basis for the termination of the employment contract. Termination of an employment contract on this basis is possible if the following conditions are met at the same time: 1) the closure of the structural unit (workshop, site); 2) the inability to transfer the employee to another job; 3) a written notification at least one month in advance to employee representatives indicating the reasons that served as the basis for termination of the employment contract (there is a direct link between the economic changes in the employer and the need to terminate the employment contract).

Consideration of disputes about the termination of an employment contract, that is, a decrease in the volume of production, work performed and services rendered, which led to a deterioration in the economic condition of the employer

Consequently, an employment contract can be terminated only if there are a set of conditions defined by law. The employer must prove his financial insolvency and provide evidence of a deterioration in the economic situation by providing financial documents confirming a decrease in production. Such evidence may include audit reports, early completion of work under civil law contracts, which confirms a decrease in production, work performed and services rendered, which has led to a deterioration in the economic situation. Given that the initiative to terminate the employment contract comes from the employer, he is required to provide such evidence. Example. By the decision of the Yessil District Court of Astana, the claim of R. against an open joint-stock company with JSC for reinstatement was denied. The case materials established that, in accordance with the employment contract, R. worked as a design manager. This employment contract is concluded for a period of 1 year. By order dated February 29, 2016, in accordance with paragraph 1 of Article 52 of the Labor Code of the Russian Federation. The employment contract has been terminated since March 24, 2016. The written consent dated February 24, 2016 is indicated as the basis for termination of the employment contract. It follows from the explanations of the defendant's representative that the basis for termination of the employment contract with the plaintiff is a decrease in the volume of production, work performed and services rendered, which led to a deterioration in the economic condition of the employer (subparagraph 3) of paragraph 1 of Article 52 of the Labor Code). The order contains an erroneous reference to the employee's written consent. In confirmation of the decrease in production, work performed and services provided, which led to a deterioration in the economic condition of the employer, the defendant provided a letter dated February 05, 2016, according to which the customer significantly reduced the volume of the company's services in relation to the project, and therefore the budget was significantly reduced and employment contracts with two employees were terminated at the company's branch in Astana.. In particular, it was decided to terminate the contracts with the design manager, who was the plaintiff, and the managing project manager.  The plaintiff was notified of the termination of the employment contract on March 18, 2016, but filed a lawsuit with the court in October 2016. In this regard, the court of first instance, taking into account the evidence provided by the defendant of a reduction in the volume of the company's services and missing the deadline for applying to the court for reinstatement, reasonably refused to satisfy the claims. At the same time, the case was considered by the court in violation of the pre-trial dispute settlement procedure. In support of the arguments of the appeal to the conciliation commission, the plaintiff provided a letter, which was handed to the accountant of the company. However, the evidence of the conciliation commission's consideration of the employee's application and the decision made on it by the plaintiff was not provided to the court. 

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