Features of termination or termination of an employment contract  

Termination of an employment contract on the grounds provided for in subparagraph 23) of paragraph 1 of Article 52 of the Labor Code must be based on the decision of the founder, owner of the property of the legal entity or the person (body) or authorized body of the legal entity authorized by the founder, owner (body) or authorized body of the legal entity.

Taking into account the specifics of the regulation of the labor of the head of the executive body of the legal entity and other members of the collegial executive body of the legal entity, as well as employees of the internal audit service and the corporate secretary, the founder, owner of the property of the legal entity has the right to make a decision during the term of the employment contract on the early termination of the powers of the head of the executive body, members of the collegial executive body of the legal entity or powers of an individual member of the executive body of a legal entity, as well as in accordance with the Law "On Joint-Stock Companies" employees of the internal audit service and the corporate secretary by decision of the founder, owner of the property of the legal entity or the person (body) or authorized body of the legal entity authorized by the founder, owner.

According to subparagraph 2) of paragraph 2 of Article 43 of the Law "On Limited and Additional Liability Partnerships", the exclusive competence of the general meeting of participants includes "the formation of the executive body of the partnership and the early termination of its powers".

In accordance with paragraphs 7 and 8 of Article 58 of the Law "On Joint-Stock Companies", the right to challenge the decision of the Board of Directors in court belongs to the members of the Board of Directors of the company or to the shareholder.

The contested decision of the Board of Directors is not an act of the employer.

The decision of the Board of Directors is binding on the head of the executive body of the legal entity and other members of the collegial executive body of the legal entity.

Therefore, termination of an employment contract on the grounds provided for by subparagraph 23) of paragraph 1 of Article 52 of the Labor Code is allowed on the basis of a decision of the founder, owner of the property of a legal entity or a person (body) or authorized body of a legal entity authorized by the founder, owner of the person (body) or authorized body of the legal entity in accordance with the regulatory legal acts of the Republic of Kazakhstan.

On the basis of the decision of the Board of Directors on the early termination of the powers of the head of the executive body, members of the collegial executive body of a legal entity or the powers of an individual member of the executive body of a legal entity, as well as in accordance with the Law of the Republic of Kazakhstan "On Joint Stock Companies", an order is issued to terminate the employment contract on the grounds provided for in subparagraph 23) Paragraph 1 of Article 52 of the Labor Code.

In accordance with paragraph 4 of Article 140 of the Labor Code, the employer's act on termination of an employment contract at the initiative of the employer is signed by a person authorized to do so by the decision of the founders, the owner of the property of the legal entity or authorized by the founders, the owner of the person (body) or the authorized body of the legal entity or by documents approved by them.

The restriction on the possibility of termination of an employment contract at the initiative of the employer, provided for in Article 54 of the Labor Code, does not apply to the above categories of employees.

On April 28, 2017, the sole participant of the Partnership decided to elect B. as a director for a period of three years. On March 16, 2020, by the decision of the sole participant of the Partnership, B. was relieved of the post of director.

B. motivated his claims by the fact that the requirements of labor law were violated during his dismissal: he was not warned about the termination of the employment contract one month in advance, the employment contract was terminated in violation of the requirements of Article 53 of the Labor Code.

The court of first instance, dismissing the plaintiff's claims, concluded that the formation of the executive body of the Partnership and the early termination of its powers were attributed to the exclusive competence of its sole participant.

On the day of the decision to dismiss, B. had reached retirement age, so the employer did not need to comply with the provisions of paragraph 1 of Article 53 of the Labor Code.

Changing the court's decision and partially satisfying the claim, the appellate instance, referring to paragraph 4 of Article 30 of the Labor Code, pointed out that the decision of the sole participant did not contain grounds for terminating the employment contract, at the time of its adoption there was a ban on the GSE to change the head of the Partnership, in connection with which the contested decision of the Partnership participant is illegal.

The judicial panel of the Supreme Court reversed the decision of the appellate instance and upheld the decision of the court of first instance, pointing out the inconsistency of the conclusions of the appellate panel on the violation of the requirements of paragraph 4 of Article 30 of the Labor Code, since this provision of the law provides for the term of the employment contract and the actions of the parties upon its expiration.

The panel recognized the conclusions of the court of first instance that the decisions taken by the GSI to prohibit the change of the head of the Partnership violate the rights of the latter and contradict the norms of the Constitution of the Republic of Kazakhstan and the Labor Code.

The plaintiff's arguments about the termination of the employment contract in violation of the requirements of Article 53 of the Labor Code without a positive decision of the commission created from an equal number of representatives from the employer and employees were rightfully declared untenable by the court of first instance.

This rule is not applicable to the plaintiff, since on the day of the decision to dismiss him, he turned 64 years old and had already reached retirement age. 

Compliance with the pre-trial dispute resolution procedure 

           Practice of applying the requirements of Article 159 of the Labor Code Article 148 of the Civil Procedure Code contains a list of requirements for the form and content of the claim.

According to Part 6 of Paragraph 1 of Article 148 of the Civil Procedure Code, the application must contain information about compliance with the pre-trial procedure for applying to the defendant, if it is established by law or provided for by the contract.

In accordance with paragraph 1 of Article 159 of the Labor Code, individual labor disputes are considered by conciliation commissions, with the exception of disputes arising between an employer and an employee of a micro-entrepreneurial 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 body of a legal entity, and in case of unresolved issues or non-execution of the decision of the conciliation commission – by the courts.

That is, in disputes arising between an employer and an employee of a micro-entrepreneurial 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, compliance with the preliminary consideration of the dispute in the conciliation commission is not required.

The requirement to apply to the conciliation commission also does not apply to certain categories of employees whose work is regulated by the Labor Code of the Republic of Kazakhstan with the features provided for by special laws and other regulatory legal acts of the Republic of Kazakhstan, including those in military service, employees of special state and law enforcement agencies, civil servants.

           However, there are cases when this requirement of the law is violated, employees' applications are returned without legal grounds.

K. filed a lawsuit against LLP for the recovery of wages, compensation payments in case of staff reduction, pension contributions, social health insurance payments, penalties and moral damage. By the decision of the Balkhash City Court of the Karaganda Region dated August 19, 2022, K.'s claim was returned to the plaintiff with all the documents due to his failure to provide a certificate of wage arrears, as well as the absence of a decision of the conciliation commission.

After a second appeal, by the decision of the Balkhash City Court of the Karaganda region dated September 27, 2022, the application was again returned to the plaintiff due to non-compliance with the pre-trial settlement of the dispute. Returning the application, the court pointed out that the case file contains a copy of the application of the plaintiff to the conciliation commission.

However, there is no document confirming its proper delivery to the employer for consideration, and there is no decision of the conciliation commission. On October 14, 2022, the plaintiff again filed a lawsuit with the court.

By the decision of the Balkhash City Court of the Karaganda Region dated October 27, 2022, a mediation agreement was approved between the parties.

However, the case file contains a letter from the state labor inspector, from which it follows 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 according to the certificate on the category of the subject of entrepreneurship of the Ministry of National Economy of the Republic of Kazakhstan, the LLP is registered as a subject of microentrepreneurship.

Due to the fact that the LLP belongs to the subject of microentrepreneurship, a pre-trial procedure for resolving a labor dispute in the conciliation commission was not required. By the ruling of the court No 2 of the city of Uralsk dated July 4, 2022, D.'s claim against Kurylys Company LLP for the recovery of wage arrears was returned to the plaintiff due to violation of the pre-trial procedure for applying to the court.

By the decision of the Judicial Chamber for Civil Cases of the West Kazakhstan Regional Court dated August 9, 2022, the ruling of July 4, 2022 was canceled and the case materials were sent to the same court for consideration of the dispute on the merits.

The court of first instance, when returning the statement of claim, was guided by paragraph 1 of Article 159 of the Labor Code, referring to the need for the LLP to apply to the conciliation commission.

At the same time, the court did not take into account the fact that the plaintiff is the sole founder and head of this legal entity, accordingly, the need to apply to the conciliation commission was not required.

By the ruling of the court No 2 of the Baiterek district dated November 1, 2021, U.'s claim against LLP for the recovery of wages was returned due to the indisputability of the claims and the need to comply with the pre-trial procedure for resolving the dispute by applying to a notary.

By the ruling of the court of appeal dated January 20, 2022, the ruling of the district court dated November 1, 2021 was canceled and the case materials were sent to the same court for consideration of the dispute on the merits.

In accordance with the requirements of subparagraph 9) of paragraph 2 of Article 92-1 of the Law of the Republic of Kazakhstan "On Notaries", an executive endorsement or a corresponding resolution is issued by a notary on indisputable claims for the recovery of accrued but not paid wages and other payments to the employee.

As follows from the content of the claim, no employment contract was concluded between the parties to the dispute, therefore, the plaintiff was not paid a salary, the claim for its recovery is based on the timesheet and the waybill.

These circumstances indicate the existence of a dispute between the parties related to the implementation of labor relations by the plaintiff with the defendant and the existence of wage arrears.

Consequently, the dispute was subject to consideration in court.

Deadlines for Applying for Consideration of Individual Labor Disputes (Article 160 of the Labor Code)

The following deadlines are established for applying to the conciliation commission or to the court for the consideration of individual labor disputes:

1) for disputes on reinstatement at work – one month from the date of delivery or sending by registered mail with acknowledgment of delivery of a copy of the employer's act on termination of the employment contract to the conciliation commission, and for applying to the court – two months from the date of delivery or sending by registered mail with acknowledgment of delivery of a copy of the decision of the conciliation commission when applying for unresolved disputes or in case of non-fulfillment of its decision by a party to the employment contract;

2) for other labor disputes – one year from the date when the employee, including those who were previously in labor relations, or the employer learned or should have learned about the violation of his right.

The flow of the period for applying for the consideration of individual labor disputes is suspended during the validity period of the mediation agreement for the labor dispute under consideration, as well as in the absence of a conciliation commission until its creation.

In the event that the deadline for applying is missed for valid reasons, the conciliation commission for labor disputes may restore the deadline for applying to the conciliation commission if there are valid reasons for the omission and resolve the dispute on the merits.

The conciliation commission independently determines whether the reasons for which the employee, including those who were previously in labor relations, did not apply to the conciliation commission within the established time limits, are considered valid.

The following deadlines are established for participants in labor relations who are entitled, in accordance with the Labor Code, to apply to the court without applying to the conciliation commission for the consideration of individual labor disputes:

 for disputes on reinstatement at work – three months from the date of delivery or sending by registered mail with acknowledgment of delivery of a copy of the employer's act on termination of the employment contract;

for other labor disputes – one year from the date when the employee, including those who were previously in labor relations, learned or should have learned about the violation of his right.

It follows from the above provisions of the law that for the consideration of individual labor disputes between the parties to an employment contract, the law establishes a procedure for pre-trial settlement of the dispute, with the exception of certain categories of employees, namely, an appeal to the conciliation commission and only after receiving a copy of the decision when applying for an unresolved issue or if a party to the employment contract fails to comply with its decision – to the court.

At the same time, in the absence of a conciliation commission, the period for applying is suspended until its creation, which does not entail the expiration of the period for applying for consideration of an individual labor dispute.

In accordance with paragraph 3 of Article 159 of the Labor Code, the procedure for the formation and activities of the conciliation commission are determined by the Agreement on the Work of the Conciliation Commission or the collective agreement.

M. filed a lawsuit against LLP No1, LLP No2 to recognize the dismissal orders as illegal, to recover wage arrears, the obligation to transfer mandatory pension contributions, deductions to the Social Health Insurance Fund.

By the decision of the Kordai District Court of the Zhambyl region dated December 2, 2021, the claim was dismissed in full.

The court of first instance motivated the dismissal of the claim by the fact that M., on the basis of employment contracts dated May 13, 2020, was hired as a supplier at LLP No1 and LLP No2.

Orders for the dismissal of the plaintiff were issued on the basis of his statements. According to the act of July 14, 2020, M. refused to familiarize himself with the order.

In court, the plaintiff's representative confirmed that the resignation letters were written by M. After the dismissal, the employer made a full settlement with him.

 In the court session, the defendant's representative filed a motion for the application of the statute of limitations, since the claim was filed after more than one year from the date of dismissal.

The plaintiff filed a lawsuit to challenge the dismissal orders on September 16, 2021, while the dismissal order was issued on July 13, 2020.

By the decision of the court of appeal dated March 5, 2022, the court decision was changed, the orders of LLP No1 and LLP No2 on the dismissal of the plaintiff from the position of a supplier were declared illegal, and wage arrears were recovered from the defendants.

Changing the decision of the court of first instance in the case, the judicial panel pointed out that the plaintiff applied to the court with a claim for the recovery of wages, subsequently with a claim to recognize the orders as illegal, as evidenced by the judicial acts of the Kordai District Court dated May 18, 2021, July 1, 2021. In this regard, the plaintiff did not miss the statute of limitations.

The claims were filed by the plaintiff within a one-year period. In connection with the recognition of dismissal orders as illegal, claims for the recovery of wages are subject to satisfaction.

According to the act of July 14, 2020, M. was acquainted with the dismissal orders, but refused to sign the act.

It follows from the judicial acts that M. filed a lawsuit to recover wage arrears in March 2021. By a court decision of May 18, 2021, the claim was dismissed.

However, he filed a lawsuit with the court to challenge the dismissal orders on September 16, 2021, i.e. more than 1 year and 2 months after the issuance of the orders.

The plaintiff did not provide the court with sufficient and reliable evidence indicating the validity of the lapse of the statute of limitations for applying to the court.

In this regard, the conclusions of the court of appeal on the cancellation of the judicial act of the court of first instance are unlawful. 

Jurisdiction 

In accordance with paragraph 5 of the regulatory resolution of the Supreme Court of the Republic of Kazakhstan "On Certain Issues of Application of Legislation by the Courts in the Resolution of Labor Disputes" dated October 6, 2017 No 9 (hereinafter referred to as the NP), claims on disputes arising from labor relations are subject to filing with the court under the general rules of civil procedure at the location of the defendant – the body of a legal entity or at the place of residence of the employer of an individual.  acting as a defendant in a dispute.

In accordance with Part 2 of Article 29 of the Civil Procedure Code, a claim against a legal entity is filed with the court at the location of the legal entity in accordance with the constituent documents and (or) the address entered in the National Register of Business Identification Numbers.

In case of filing claims at the location of a branch or representative office in the manner prescribed by Part 3 of Article 30 of the Civil Procedure Code, only legal entities may be defendants.

Issues of jurisdiction in cases of the generalized category do not cause difficulties. Thus, by the ruling of the Ust-Kamenogorsk City Court, the civil case on the claim of Zh. against LLP for the recovery of damages, payment for overtime work, compensation for moral damage was transferred to the jurisdiction of the Inter-District Court for Civil Cases of the city of Astana, for consideration on the merits. The court's ruling is correct, since it is established that the defendant is a legal entity located and registered at the address:

Astana, D. Konayev Street, claims on disputes arising from labor relations are subject to submission to the court according to the general rules of civil procedure at the location of the defendant In addition, I consider it necessary to draw the attention of the courts 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 obligations of the employer on behalf of this legal entity.

Therefore, the employee has the right to file a claim at the location of the branch of a foreign legal entity, having previously checked the rights of the head of the branch to represent the interests of the legal entity.

The issue of determining the jurisdiction of labor disputes in the event of rehabilitation or bankruptcy of the employer.

           Thus, by virtue of the provisions of Part 8 of Article 35 of the Civil Procedure Code, cases on disputes arising within the framework of the rehabilitation procedure and bankruptcy proceedings, including on the invalidation of transactions concluded by the debtor or a person authorized by him, on the return of the debtor's property, on the recovery of receivables under the claims of the bankruptcy or rehabilitation manager, are considered by the same judge who made the decision on the application of the rehabilitation procedure or on declaring the debtor bankrupt.  with the exception of cases on disputes, the jurisdiction of which is established by Article 31 of the Civil Procedure Code.

By the ruling of the court of the city of Aktobe dated February 15, 2021, Zh.'s claim against LLP for the cancellation of orders for suspension from work, dismissal, reinstatement at work, recovery of wages for overtime work, recovery of wages for the period of forced absenteeism, recovery of penalties, moral damage was returned on the basis of subparagraph 2 of part 1 of Article 152 of the Commercial Code due to the lack of jurisdiction of the dispute to this court.

Returning the claim, the court pointed out that by the decision of the SIEC of the Aktobe region, a rehabilitation procedure was applied to the Partnership, in connection with which, in accordance with Part 8 of Article 35 of the Civil Procedure Code, the case is subject to consideration by the economic court.

Indeed, by the decision of the SIEC of the court of the Aktobe region dated October 14, 2016, which entered into force, a rehabilitation procedure was applied to the Partnership.

By virtue of the provisions of subparagraphs 5, 7 of Article 67 of the Law of the Republic of Kazakhstan "On Rehabilitation and Bankruptcy", the court in the rehabilitation procedure accepts for its consideration cases on property disputes, in which the debtor acts as a defendant, and also resolves disputes between the participants in the rehabilitation procedure.

According to subparagraph 16) of paragraph 1 of Article 1 of the Labor Code, a labor dispute is a disagreement between an employee (employees) and an employer (employers), including those who were previously in labor relations, on the application of labor legislation of the Republic of Kazakhstan, the implementation or amendment of the terms of agreements, labor and (or) collective agreements, acts of the employer.

It has been established that the dispute between the parties arises from labor relations, is based on the norms of labor legislation and the terms of employment contracts and is 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, the ruling of the judicial panel dated March 12, 2021 canceled the court's ruling and transferred the issue for a new trial to the court of first instance.

In cases of declaring the employer bankrupt or applying the rehabilitation procedure, disputes arising from labor relations (on reinstatement at work, recovery of wages, etc.) are subject to consideration and resolution in 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 

According to the requirements of paragraph 7 of Article 610 of the Tax Code, the state duty is charged on non-property claims in the amount of 0.5 MCI.

Based on the requirements of paragraph 1 of Article 951 of the Civil Code, moral damage is a violation, derogation or deprivation of personal non-property benefits and rights of individuals.

In accordance with the requirements of Article 149 of the Civil Procedure Code, a document confirming the payment of the state duty shall be attached to the claim.

In accordance with subparagraph 1) of Article 616 of the Tax Code, plaintiffs are exempt from payment of state duty in courts - in claims for the recovery of wages and other claims related to labor activity.

If the claim is satisfied, the court, in accordance with Article 117 of the Civil Procedure Code, is obliged to collect the state duty to the state from the defendant who is not exempt from its payment.

There are some cases when the courts, in violation of subparagraph 2) of part 1 of Article 149 of the Civil Procedure Code, accept claims for consideration by the court without payment of the state duty.

It follows from the case materials that A. filed a lawsuit against LLP for the recovery of wages, compensation for downtime, penalties, compensation for moral damage.

By the decision of the Zhetysu District Court of Almaty dated April 13, 2022, upheld by the decision of the Judicial Chamber for Civil Cases of the Almaty City Court, from LLP in favor of A.  wage arrears, penalties, compensation for moral damage, expenses for the payment of the assistance of a representative were collected.

The LLP is obliged to make pension contributions and other mandatory payments for the period of A.'s employment from June 22, 2021 to August 2021. 

Limitation period for labor disputes 

In accordance with paragraph 2 of Article 179 of the Civil Code, the limitation period is applied by the court only at the request of a party to the dispute, made before the court makes a decision

The court is obliged to accept the claim for consideration regardless of the expiration of the limitation period.

Refusal or return of the application due to the expiration of the statute of limitations is unacceptable. Compliance with the statute of limitations or their expiration, the presence of valid reasons for missing the deadline for applying to the court must be checked during the consideration of the dispute.

In the absence of an application for the application of the limitation period before the decision is made, the dispute is resolved on the merits.

Thus, the plaintiff S. filed a lawsuit against the Institution for reinstatement at work and recovery of wages for the period of forced absenteeism. By the decision of the District Court No 2 of the Baiterek District of the West Kazakhstan Region dated November 29, 2021, the claim was reasonably dismissed due to the lapse of the statute of limitations on the basis of the defendant's application.

The court motivated its conclusions by the fact that the plaintiff filed a lawsuit with the court on October 27, 2021, while the order to terminate the contract was issued on June 11, 2020.

The plaintiff did not provide sufficient and reliable evidence of the validity of the reasons for missing the deadline for applying to the court.

The case was not considered on appeal. 

Regulatory framework The main regulatory legal acts to be applied in the consideration of cases of the generalized category are 

1.            Constitution of the Republic of Kazakhstan; The Civil Code of the Republic of Kazakhstan (General Part) dated December 27, 1994;

2.            Civil Code of the Republic of Kazakhstan (Special Part) dated July 1, 1999 (hereinafter referred to as the Civil Code);

3.            Civil Procedure Code of the Republic of Kazakhstan dated October 31, 2015 No 377-V (hereinafter referred to as the CPC);

4.            Labor Code of the Republic of Kazakhstan dated November 23, 2015 No 414-V ZRK (hereinafter referred to as the Labor Code);

5.            On Taxes and Other Obligatory Payments to the Budget (Tax Code) dated December 25, 2017 No 120-VI ZRK (hereinafter referred to as the TC);

6.            Entrepreneurial Code of October 29, 2015 No 375-V ZRK; Code of the Republic of Kazakhstan dated July 7, 2020 No 360-VI of the Law of the Republic of Kazakhstan "On the Health of the People and the Health Care System";

7.            Law of the Republic of Kazakhstan "On Trade Unions"; Law of the Republic of Kazakhstan dated April 2, 2010 No. 261-IV "On Enforcement Proceedings and the Status of Bailiffs";

8.            Law of the Republic of Kazakhstan dated July 14, 1997 No. 155-I "On Notaries"; Law of the Republic of Kazakhstan dated April 22, 1998 No. 220-1 "On Limited and Additional Liability Partnerships";

9.            Law of the Republic of Kazakhstan dated May 13, 2003 No. 415 "On Joint-Stock Companies";

regulatory resolutions of the Supreme Court of the Republic of Kazakhstan:

1.            "On Certain Issues of Application of Legislation by Courts in the Settlement of Labor Disputes" dated October 6, 2017 No 9;

2.            "On the Application by the Courts of the Legislation on Compensation for Moral Damage" dated November 27, 2015 No 7;

3.            "On the Judicial Decision in Civil Cases" of July 11, 2003 No 5;

4.            "On the Application by the Courts of the Republic of Kazakhstan of the Legislation on Legal Costs in Civil Cases" dated December 25, 2006 No 9. 

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