Determining Jurisdiction over Labor Disputes in the Event of Rehabilitation or Bankruptcy of an Employer
For each disciplinary offense, an employee may be subject to only one disciplinary sanction (paragraph 3 of Article 65 of the Labor Code).
By an employer’s order dated July 18, 2022, a Commission was established for the replacement and destruction of the State Flag, State Emblem of the Republic of Kazakhstan that do not comply with state standards, as well as official letterheads, seals and stamps (hereinafter referred to as the “Commission”). B. was included in the composition of the Commission for 2022. On August 11, 2022, B. refused to sign the order establishing the Commission to confirm that she had been familiarized with it, because the Commission had been established while she was on leave and, pursuant to the rules for the destruction of certain types of state property, she should not have been included in the Commission.
By the employer’s order dated August 19, 2022, B. was subject to disciplinary liability in the form of a “reprimand” for refusing to sign the order dated July 18, 2022 establishing the Commission.
On August 27, 2022, B. filed a claim with the court seeking the annulment of the order imposing the disciplinary sanction, the annulment of the order establishing the Commission, and compensation for moral damages.
By the court decision dated December 5, 2022, the order imposing the reprimand was declared unlawful and annulled. The court dismissed the claims seeking annulment of the order establishing the Commission and compensation for moral damages.
By an order dated February 24, 2023, B. was subjected to a disciplinary sanction in the form of a “reprimand” for refusing to participate in the work of the Commission established by Order No. 69-p dated July 18, 2022.
The claimant challenged this order, arguing that she should not have been included in the Commission, that the order had been issued while she was on annual leave, that she had already previously been subjected to a disciplinary sanction which had been declared unlawful and annulled by the court, and that the respondent had missed the statutory time limit for imposing the disciplinary sanction.
By the court decision dated May 29, 2023, B.’s claim was upheld. The order dated February 24, 2023 imposing the disciplinary sanction in the form of a “reprimand” was declared unlawful and annulled.
The claimant’s request to declare unlawful and annul the order imposing the disciplinary sanction in the form of a “reprimand” was lawful and well-founded, since the claimant had been subjected to disciplinary liability twice for the same disciplinary offense, which had also previously been declared unlawful by a court decision.
Pursuant to paragraph 2 of Article 66 of the Labor Code, a disciplinary sanction may not be imposed later than six months from the date on which the disciplinary offense was committed.
The disciplinary offense was committed by the claimant on August 11, 2022. A disciplinary sanction may not be imposed later than six months from the date on which the disciplinary offense was committed. The period for imposing disciplinary liability expired on February 11, 2023, whereas the order imposing the disciplinary sanction was issued on February 24, 2023.
By a ruling of the Judicial Collegium for Civil Cases, the court decision dated May 29, 2023 was correctly upheld without modification.
Jurisdiction
Pursuant to paragraph 5 of Regulatory Resolution No. 9 of the Supreme Court of the Republic of Kazakhstan dated October 6, 2017, “On Certain Issues of Application by Courts of Legislation in Resolving Labor Disputes” (hereinafter referred to as the “Regulatory Resolution”), claims arising from employment relationships shall be brought before a court in accordance with the general rules of civil procedure at the place where the respondent is located — in the case of a legal entity, at the location of its relevant body, or at the place of residence of the employer who is an individual and acts as the respondent in the dispute.
Pursuant to Part 2 of Article 29 of the Civil Procedure Code, a claim against a legal entity shall be filed with the court at the location of the legal entity in accordance with its constituent documents and/or the address entered in the National Register of Business Identification Numbers.
Where a claim is filed at the location of a branch or representative office in accordance with the procedure provided for by Part 3 of Article 30 of the Civil Procedure Code, only legal entities may be named as respondents.
Jurisdictional issues in cases of the category under review do not generally give rise to difficulties.
Thus, by a ruling of the Ust-Kamenogorsk City Court, a civil case concerning the claim of Zh. against an LLP for recovery of losses, payment for overtime work, and compensation for moral damages was transferred, on the grounds of jurisdiction, to the Interdistrict Court for Civil Cases of Astana for consideration on the merits.
The court’s ruling was correct, since it was established that the respondent, a legal entity, was located and registered at the following address: Astana, D. Konaev Street. Claims arising from employment relationships shall be brought before a court in accordance with the general rules of civil procedure at the place where the respondent is located.
In addition, I consider it necessary to draw the courts’ attention to the requirements of Article 19 of the Labor Code, according to which the head of a branch or representative office of a foreign legal entity exercises all the rights and performs all the duties of an employer on behalf of that legal entity.
Consequently, an employee is entitled to bring a claim at the location of the branch of a foreign legal entity, provided that the employee first verifies the authority of the head of the branch to represent the interests of the legal entity.
Determining Jurisdiction over Labor Disputes in the Event of Rehabilitation or Bankruptcy of an Employer
Pursuant to the provisions of Part 8 of Article 35 of the Civil Procedure Code, cases concerning disputes arising within the framework of a rehabilitation procedure and bankruptcy procedure, including cases concerning the invalidation of transactions concluded by the debtor or a person authorized by the debtor, the return of the debtor’s property, and the recovery of accounts receivable based on claims brought by a bankruptcy or rehabilitation administrator, shall be considered by the same judge who rendered the decision to apply the rehabilitation procedure or to declare the debtor bankrupt, except for cases involving disputes whose jurisdiction is established by Article 31 of the Civil Procedure Code.
By a ruling of the Aktobe City Court dated February 15, 2021, the claim filed by Zh. against an LLP seeking the annulment of orders on suspension from work and dismissal, reinstatement, recovery of wages for overtime work, recovery of wages for the period of forced absence from work, recovery of a penalty, and compensation for moral damages was returned pursuant to Subparagraph 2 of Part 1 of Article 152 of the Civil Procedure Code on the grounds that the dispute was not within the jurisdiction of that court.
In returning the claim, the court indicated that a rehabilitation procedure had been applied to the Partnership pursuant to a decision of the Specialized Interdistrict Economic Court of the Aktobe Region and, therefore, in accordance with Part 8 of Article 35 of the Civil Procedure Code, the case was subject to consideration by an economic court.
Indeed, by the decision of the Specialized Interdistrict Economic Court of the Aktobe Region dated October 14, 2016, which had entered into legal force, a rehabilitation procedure was applied to the Partnership.
Pursuant to Subparagraphs 5 and 7 of Article 67 of the Law of the Republic of Kazakhstan “On Rehabilitation and Bankruptcy,” in a rehabilitation procedure, the court accepts for its proceedings cases involving property disputes in which the debtor acts as the respondent, as well as resolves disputes between participants in the rehabilitation procedure.
According to Subparagraph 16) of Paragraph 1 of Article 1 of the Labor Code, a labor dispute means disagreements between an employee (employees) and an employer (employers), including persons who were previously in an employment relationship, concerning the application of the labor legislation of the Republic of Kazakhstan, the performance or amendment of the terms of agreements, employment and/or collective agreements, and employer’s acts.
It was established that the dispute between the parties arose from employment relationships, was based on the provisions of labor legislation and the terms of employment contracts, and was not related to the implementation of the rehabilitation procedure.
Since the court incorrectly applied the provisions of Part 8 of Article 35 of the Civil Procedure Code, by a ruling of the Judicial Collegium dated March 12, 2021, the court ruling was annulled and the matter was remitted to the court of first instance for reconsideration.
In cases where an employer is declared bankrupt or a rehabilitation procedure is applied, disputes arising from employment relationships, including disputes concerning reinstatement, recovery of wages, and other employment-related claims, shall be considered and resolved by courts of general jurisdiction. The provisions of Part 8 of Article 35 of the Civil Procedure Code do not apply to labor disputes.
State Duty
Pursuant to the requirements of Paragraph 7 of Article 610 of the Tax Code, a state duty is charged on statements of claim of a non-property nature in the amount of 0.5 monthly calculation index (MCI).
Under Paragraph 1 of Article 951 of the Civil Code, moral damage means the violation, diminution, or deprivation of personal non-property benefits and rights of individuals.
Pursuant to Article 149 of the Civil Procedure Code, a document confirming payment of the state duty shall be attached to the statement of claim.
In accordance with Subparagraph 1) of Article 616 of the Tax Code, plaintiffs are exempt from payment of the state duty in courts in claims for the recovery of remuneration for labor and other claims related to employment activities.
Where a claim is satisfied, pursuant to Article 117 of the Civil Procedure Code, the court shall be obliged to recover the state duty, in favor of the state, from the respondent who is not exempt from payment thereof.
Certain cases have been identified where courts, in violation of Subparagraph 2) of Part 1 of Article 149 of the Civil Procedure Code, accept claims for proceedings without payment of the state duty.
It follows from the case materials that A. filed a claim with the court against an LLP seeking recovery of wages, compensation for downtime, a penalty, and compensation for moral damages.
By the decision of the Zhetysu District Court of Almaty dated April 13, 2022, which was upheld by the ruling of the Judicial Collegium for Civil Cases of the Almaty City Court, the LLP was ordered to pay A. wage arrears, a penalty, compensation for moral damages, and expenses incurred for legal representation.
The LLP was also ordered to make pension contributions and other mandatory payments for A.’s period of employment from June 22, 2021 to August 2021.
**Compliance with the Pre-Trial Procedure for Dispute Resolution
Practice in Applying the Requirements of Article 159 of the Labor Code**
Article 148 of the Civil Procedure Code sets out the requirements for the form and content of a statement of claim. Pursuant to Subparagraph 6) of Paragraph 1 of Article 148 of the Civil Procedure Code, the statement of claim must contain information concerning compliance with the pre-trial procedure for applying to the respondent, where such procedure is established by law or provided for by an agreement.
Pursuant to Paragraph 1 of Article 159 of the Labor Code, individual labor disputes shall be considered by conciliation commissions, except for disputes arising between an employer and an employee of a small business entity, a non-profit organization with no more than fifteen employees, a domestic worker, the sole executive body of a legal entity, the head of the executive body of a legal entity, as well as other members of the collegial executive body of a legal entity. Unresolved issues or non-compliance with a decision of the conciliation commission shall be considered by the courts.
Thus, in disputes arising between an employer and an employee of a small business entity, a non-profit organization with no more than fifteen employees, a domestic worker, the sole executive body of a legal entity, the head of the executive body of a legal entity, as well as other members of the collegial executive body of a legal entity, prior consideration of the dispute by a conciliation commission is not required.
The requirement to apply to a conciliation commission also does not extend to certain categories of employees whose employment is regulated by the Labor Code of the Republic of Kazakhstan subject to the specific features established by special laws and other regulatory legal acts of the Republic of Kazakhstan, including persons serving in the military, employees of special state and law enforcement agencies, and civil servants.
However, there are cases where this statutory requirement is violated and employees’ claims are returned without lawful grounds.
K. filed a claim with the court against an LLP seeking recovery of wages, compensation payments due to staff reduction, pension contributions, social health insurance payments, a penalty, and compensation for moral damages.
By a ruling of the Balkhash City Court of the Karaganda Region dated August 19, 2022, K.’s claim was returned to the claimant together with all documents due to the failure to provide a certificate confirming wage arrears, as well as the absence of a decision of the conciliation commission.
Following a repeated application, by a ruling of the Balkhash City Court of the Karaganda Region dated September 27, 2022, the claim was again returned to the claimant due to non-compliance with the pre-trial procedure for resolving the dispute. In returning the claim, the court indicated that the case file contained a copy of the claimant’s application to the conciliation commission. However, there was no document confirming its proper delivery to the employer for consideration, nor was there a decision of the conciliation commission.
On October 14, 2022, the claimant again filed a claim with the court. By a ruling of the Balkhash City Court of the Karaganda Region dated October 27, 2022, a mediation agreement between the parties was approved. However, the case file contains a letter from a state labor inspector, which indicates that, according to the Unified Register of Subjects and Objects of Inspections (ERSOP) of the General Prosecutor’s Office of the Republic of Kazakhstan and the certificate on the category of the business entity issued by the Ministry of National Economy of the Republic of Kazakhstan, the LLP was registered as a micro-enterprise.
Since the LLP qualifies as a micro-enterprise, compliance with the pre-trial procedure for resolving the labor dispute through a conciliation commission was not required.
By a ruling of Court No. 2 of Uralsk dated July 4, 2022, D.’s claim against “Construction Company” LLP seeking recovery of wage arrears was returned to the claimant due to failure to comply with the pre-trial procedure for applying to the court.
By a ruling of the Judicial Collegium for Civil Cases of the West Kazakhstan Regional Court dated August 9, 2022, the ruling dated July 4, 2022 was annulled, and the case materials were remitted to the same court for consideration of the dispute on the merits.
In returning the statement of claim, the court of first instance relied on Paragraph 1 of Article 159 of the Labor Code, referring to the need to apply to a conciliation commission.
At the same time, the court failed to take into account that the claimant was the sole founder and head of the legal entity concerned and, consequently, there was no requirement to apply to a conciliation commission.
By a ruling of Court No. 2 of Baiterek District dated November 1, 2021, U.’s claim against an LLP seeking recovery of wages was returned on the grounds that the claims were undisputed and that it was necessary to comply with the pre-trial procedure for resolving the dispute by applying to a notary.
By a ruling of the appellate court dated January 20, 2022, the ruling of the district court dated November 1, 2021 was annulled, and the case materials were remitted to the same court for consideration of the dispute on the merits.
Pursuant to Subparagraph 9) of Paragraph 2 of Article 92-1 of the Law of the Republic of Kazakhstan “On Notaries,” an enforcement order or the relevant resolution is issued by a notary in respect of undisputed claims for the recovery of accrued but unpaid wages and other payments due to an employee.
As follows from the statement of claim, no employment contract was concluded between the parties to the dispute. Consequently, no wages were accrued to the claimant, and the claim for their recovery was based on the working time record and waybill. These circumstances indicate the existence of a dispute between the parties related to the claimant’s employment relationship with the respondent and the existence of wage arrears. Therefore, the dispute was subject to consideration by the court.
Time Limits for Filing Claims in Individual Labor Disputes (Article 160 of the Labor Code)
The following time limits are established for applying to a conciliation commission or to a court for consideration of individual labor disputes:
- in disputes concerning reinstatement in employment — one month from the date of delivery or dispatch by registered mail with acknowledgment of receipt of a copy of the employer’s act on termination of the employment contract to the conciliation commission; for applying to a court — two months from the date of delivery or dispatch by registered mail with acknowledgment of receipt of a copy of the conciliation commission’s decision, where the application concerns an unresolved dispute or where a party to the employment contract has failed to comply with the conciliation commission’s decision;
- in other labor disputes — one year from the date on which the employee, including a person who was previously in an employment relationship, or the employer learned or should have learned of the violation of their rights.
The running of the time limit for applying for consideration of an individual labor dispute shall be suspended during the period of validity of a mediation agreement concerning the labor dispute in question, as well as where there is no conciliation commission, until such commission is established.
If the established time limit for applying to a conciliation commission has been missed for valid reasons, the labor dispute conciliation commission may restore the time limit for applying to the conciliation commission, provided that the reasons for missing the time limit are valid, and may resolve the dispute on the merits.
The conciliation commission independently determines whether the reasons why an employee, including a person who was previously in an employment relationship, failed to apply to the conciliation commission within the prescribed time limit constitute valid reasons.
For participants in employment relationships who, pursuant to the Labor Code, are entitled to apply directly to a court without first applying to a conciliation commission for consideration of an individual labor dispute, the following time limits are established:
- in disputes concerning reinstatement in employment — three months from the date of delivery or dispatch by registered mail with acknowledgment of receipt of a copy of the employer’s act on termination of the employment contract;
- in other labor disputes — one year from the date on which the employee, including a person who was previously in an employment relationship, learned or should have learned of the violation of their rights.
It follows from the above-mentioned provisions of law that, with respect to individual labor disputes between the parties to an employment contract, the law establishes a pre-trial procedure for resolving disputes, except for certain categories of employees. Specifically, an employee must apply to a conciliation commission and may apply to a court only after receiving a copy of the commission’s decision in the event of an unresolved dispute or where a party to the employment contract has failed to comply with its decision.
At the same time, where there is no conciliation commission, the running of the time limit for applying is suspended until the commission is established, which prevents the expiration of the time limit for applying for consideration of an individual labor dispute.
Pursuant to Paragraph 3 of Article 159 of the Labor Code, the procedure for establishing and operating a conciliation commission shall be determined by the Agreement on the Operation of the Conciliation Commission or by a collective agreement.
Конечно. Перевожу предыдущий текст на английский:
Regulatory Framework
The main regulatory legal acts applicable when considering cases of this category are:
The Constitution of the Republic of Kazakhstan;
The Civil Code of the Republic of Kazakhstan (General Part) dated December 27, 1994;
The Civil Code of the Republic of Kazakhstan (Special Part) dated July 1, 1999 (hereinafter referred to as the Civil Code);
The Civil Procedure Code of the Republic of Kazakhstan No. 377-V dated October 31, 2015 (hereinafter referred to as the Civil Procedure Code);
The Labor Code of the Republic of Kazakhstan No. 414-V ZRK dated November 23, 2015 (hereinafter referred to as the Labor Code);
The Code of the Republic of Kazakhstan “On Taxes and Other Obligatory Payments to the Budget” (Tax Code) No. 120-VI ZRK dated December 25, 2017 (hereinafter referred to as the Tax Code);
The Entrepreneurial Code of the Republic of Kazakhstan No. 375-V ZRK dated October 29, 2015;
The Code of the Republic of Kazakhstan “On Public Health and Healthcare System” No. 360-VI ZRK dated July 7, 2020;
The Law of the Republic of Kazakhstan “On Trade Unions”;
The Law of the Republic of Kazakhstan No. 261-IV “On Enforcement Proceedings and the Status of Bailiffs” dated April 2, 2010;
The Law of the Republic of Kazakhstan No. 155-I “On Notaries” dated July 14, 1997;
The Law of the Republic of Kazakhstan No. 220-I “On Limited Liability and Additional Liability Partnerships” dated April 22, 1998;
The Law of the Republic of Kazakhstan No. 415 “On Joint-Stock Companies” dated May 13, 2003.
Normative Resolutions of the Supreme Court of the Republic of Kazakhstan:
No. 9 dated October 6, 2017, “On Certain Issues of Application by Courts of Legislation in Resolving Labor Disputes”;
No. 7 dated November 27, 2015, “On Application by Courts of Legislation on Compensation for Moral Damage”;
No. 5 dated July 11, 2003, “On Court Decisions in Civil Cases”;
No. 9 dated December 25, 2006, “On Application by Courts of the Republic of Kazakhstan of Legislation on Court Costs in Civil Cases.”
Готов также перевести следующий раздел в таком же официально-юридическом стиле.
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