Grounds for termination of an employment contract at the initiative of the employer

Termination of an employment contract based on a reduction in the number or staff of employees (subparagraph 2) of paragraph 1 of Article 52 of the Labor Code)

N. filed a lawsuit with the NAO (University) and the University's Board of Directors to declare illegal the decision of the University's Board of Directors dated November 25, 2021, to cancel the order to terminate the employment contract, reinstate the Vice-rector for Student Affairs and Social Work, and to collect wages for the time of forced absenteeism.

By a ruling of the Taraz City Court dated June 9, 2022, the claim regarding the cancellation of the order to reinstate the plaintiff in his former position and to collect wages was left without consideration on the basis of subparagraph 1) of Article 279 of the CPC.

By the decision of the Taraz City Court of June 9, 2022, the claim for recognition of the unlawful decision of the University's Board of Directors of November 25, 2021 was dismissed.

By the ruling of the judicial board for civil cases of the Zhambyl Regional Court of September 23, 2022, the ruling of the court of first instance was canceled, the case in this part was sent for a new hearing to the same court in a different composition.

By the decision of the judicial board for civil cases of the Zhambyl Regional Court dated September 23, 2022, the decision of the Taraz City Court was changed, regarding the refusal to satisfy the claim, it was canceled with the issuance of a new decision on the satisfaction of the claim. The decision of the University's Board of Directors dated November 25, 2021 regarding the exclusion of the position of Vice-rector for Student Affairs and Social Work from the staff was declared illegal. The rest of the court's decision remains unchanged.

By a decision of March 25, 2023, the Cassation Judicial Board of the Supreme Court, canceling the decision of the judicial board of the regional court, upheld the decision of the court of first instance, disagreeing with the conclusions of the appellate instance on the plaintiff's right to appeal the decision of the Board of Directors based on paragraph 7 of Article 12 of the Labor Code.

According to the University's charter, the governing body is the Board of Directors.

By a protocol decision of the Board of Directors dated November 25, 2021, the position of Vice-Rector for Student Affairs and Social Work was excluded from the Board.

By order of the Chairman of the University Board, the employment contract with N. was terminated due to the reduction of the staff of the Vice-rector for Student Affairs and Social Work, in accordance with subparagraph 2) of paragraph 1 of Article 52, paragraph 2 of Article 96, subparagraph 2) paragraph 1 of Article 131 of the Labor Code.

According to paragraphs 7, 8 of Article 58 of the Law of the Republic of Kazakhstan "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 the shareholder.        

The Taraz City Court motivated the refusal to satisfy the claim by the fact that N., not being a shareholder, a member of the Board of Directors, does not have the authority to challenge the decision of the Board of Directors.

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

In addition, the Labor Code does not contain mandatory requirements for the organizational structure and staffing of a particular legal entity, it only provides for the procedure and restrictions on the possibility of termination of an employment contract at the initiative of the employer, including in case of staff reductions.

Thus, when challenging the decision of the management body of a joint-stock company, the courts need to proceed from whether the employee who has been reduced in staff is a proper plaintiff in this case.

In addition, upon termination of the employment contract on the initiative of the employer on the grounds provided for in subparagraph 2) According to paragraph 1 of Article 52 of the Labor Code, the courts need to find out whether there are legitimate grounds for making a decision to reduce the number or staff of employees, whether this is due to a real reduction in the amount of work due to objective circumstances that the employer must submit to the court.

According to paragraph 6 of Article 53 of the Labor Code, termination of an employment contract on the grounds provided for in paragraphs 8), 9), 10), 11), 12), 14), 15), 16), 17) and 18) of paragraph 1 of Article 52 of the Labor Code, is carried out in compliance with the procedure for applying disciplinary penalties provided for by article 65, and the requirements of Article 66 of the Labor Code.

In accordance with subparagraph 8) of paragraph 1 of Article 52 of the Labor Code, an employment contract may be terminated at the initiative of the employer if the employee is absent from work without a valid reason for three or more consecutive hours in one working day (work shift).

R. filed a lawsuit with the LLP demanding reinstatement at work, recovery of wages for the time of forced absenteeism, and recovery of moral damage.

The parties signed an employment contract dated June 10, 2020, according to which the working time is 48 hours per week. During shift work; the shift duration is 12 hours (1 shift from 08.00 to 20.00; 2 shift from 20.00 to 08.00), the official salary is 70,000 tenge, after payment of mandatory taxes and pension contributions.

By the order of the General Director of LLP dated April 21, 2020, the employment contract with the plaintiff was terminated due to absence from the workplace for more than three working hours from April 19 to April 20, 2020.

It follows from the case file that the grounds for termination of the employment contract with the employee were the memo of the TB engineer dated April 21, 2021 and the employee's absence from the workplace dated April 21, 2021.

However, the court was provided with an act dated April 20, 2021, and not April 21, 2021, from the contents of which it follows that R. was absent from her workplace from 01:00 to 3:30 on April 19, 2021. No other act, including that of April 21, 2021, was provided to the court.

The Court was also not provided with the memo of the TB engineer and dated April 21, 2021. It follows from the memo of the TB engineer and dated April 16, 2021, that Engineer R. was verbally severely reprimanded and subsequently dismissed.

In addition, the defendant, in violation of the requirements of paragraphs 1, 2 of Article 65 of the Labor Code, has not submitted an act on the plaintiff's refusal to give an explanation, there is no evidence of the plaintiff's familiarization with the order or sending them to the plaintiff through the postal (courier) service.

Having recognized the termination of the employment contract as illegal, the court of first instance pointed out that these circumstances were not grounds for satisfying the claim, since the plaintiff was asking to reinstate her at work, but she did not dispute the order to terminate the employment contract. Whereas, according to paragraph 10 of the NP, the employer's act, in accordance with the Labor Code, must specify the basis for termination of the employment contract. In addition, the courts should invalidate the employer's act of termination or termination of the employment contract and only then resolve the issue of reinstatement of the employee at work. Due to the fact that at the time of consideration of this dispute, the order dated April 21, 2021 has not been challenged, canceled or declared illegal, the court cannot resolve the issue of reinstatement of the plaintiff.

The claim was dismissed by the decision of the Bostandyk District Court of Almaty dated November 8, 2021.

By virtue of paragraph 1 of Article 9 of the Civil Code, the protection of civil rights is carried out by the court by recognizing the rights; restoring the situation that existed before the violation of the right; suppressing actions that violate the right or threaten to violate it, as well as by other means provided for by legislative acts.

According to article 6 of the Labor Code, everyone has equal opportunities to exercise their rights and freedoms at work. No one may be restricted in their rights at work, except in cases and in accordance with the procedure provided for by the Labor Code and other laws of the Republic of Kazakhstan.

It follows from the content of paragraph 10 of the NP that, in accordance with the Labor Code, the employer's act must specify the basis for termination of the employment contract. In this regard, the courts should invalidate the employer's act of termination or termination of the employment contract and only then resolve the issue of reinstatement of the employee at work.

In this regard, the absence of an independent requirement to declare illegal an order to terminate an employment contract with a proven violation of the employee's labor rights cannot serve as a basis for refusing to satisfy the claim.

Another example

I. appealed to the court with a claim to the LLP for the cancellation of the order to terminate the employment contract, reinstatement at work, and recovery of lost earnings.

By the decision of the Petropavlovsk City Court No. 2 dated September 7, 2022, I.'s claim was denied.

Rejecting I.'s claim, the court pointed out that the fact of absence from the workplace for more than three hours in a row was confirmed by the evidence presented to the court. In the absence of evidence of the validity of the reasons for the plaintiff's absence from the workplace, failure to comply with the procedure provided for in paragraph 2 of Article 65 of the Labor Code for the application of disciplinary action in the form of failure by the employee to provide an explanation is an insignificant circumstance and does not prevent the application of disciplinary action in the form of dismissal. The contested order is lawful, and there are no grounds for reinstating the plaintiff and collecting wages for the time of forced absenteeism.

In addition, the court concluded that I. had missed the deadline for applying to both the conciliation commission and the court. The plaintiff did not provide any valid reasons for missing the deadline.

By the decision of the Judicial Board for Civil Cases of North Kazakhstan Region dated December 7, 2022, the decision of the Petropavlovsk City Court No. 2 dated September 7, 2022 was canceled, and a new decision was made. The claim of I. to the LLP is satisfied.

In accordance with paragraph 3 of Article 61 of the Labor Code, a copy of the employer's act on termination of the employment contract is handed to the employee or sent to him by registered mail with a notification of its delivery within three working days from the date of publication of the employer's act. Article 23 of the Labor Code provides for other ways to familiarize oneself with the acts of the employer by sending them by courier mail, fax, e-mail and other information and communication technologies.  

According to paragraph 2 of Article 65 of the Labor Code, before applying disciplinary action, the employer is obliged to request from the employee an explanation in writing (on paper or in the form of an electronic document certified by means of an electronic digital signature) or in electronic form with authorization and identification of the employee. A request for an explanation of a disciplinary offense is made in writing (on paper or in the form of an electronic document certified by an electronic digital signature) and is delivered to the employee personally or by courier mail, postal service, fax, e-mail and other information and communication technologies confirming receipt of the employer's request. In case of evasion or refusal of an employee from receiving a claim, an appropriate act is drawn up by the employer's representative. If the employee does not provide an explanation after two working days from the date of receipt of the claim or drawing up an act of evasion or refusal to receive the claim, then the relevant act is drawn up by the employer's representative. Failure by an employee to provide an explanation is not an obstacle to disciplinary action.

According to paragraph 17 of the NP, an employee's refusal to give a written explanation is drawn up two working days after the request for a written explanation. The requirement to provide an explanation on the fact of the offense committed is made in writing.

By Order No. 286 of June 9, 2021, the employment contract with I. was terminated on the basis of subparagraph 8) of paragraph 1 of Article 52 of the Labor Code, due to her absence from work without a valid reason on June 9, 2021.

On June 23, 2021, the employer drew up an act on the plaintiff's refusal to give an explanation for his absence from work.

I. reviewed the order on June 23, 2021, refused to sign it.

The plaintiff was dismissed in violation of the requirements of paragraph 2 of Article 65, paragraph 3 of Article 61 of the Labor Code. The plaintiff was not informed of the dismissal order in a timely manner.

The dismissal order was issued on June 9, 2021, while the act stating that the plaintiff refuses to give an explanatory note was drawn up on June 23, 2021. The employer did not provide evidence indicating that the plaintiff had requested an explanation for the fact of the committed disciplinary misconduct, i.e. for the fact of absence from the workplace.

In addition, in violation of paragraph 3 of Article 61 of the Labor Code, the employee was not sent a copy of the order to terminate the employment contract.

The employer violated the procedure for applying disciplinary penalties provided for in paragraph 2 of Article 65 of the Labor Code. After handing over or otherwise sending a request for an explanation on the fact of a committed disciplinary offense from an employee, the employer had to provide the employee with at least two working days to submit an explanatory note on the fact of a committed disciplinary offense, and only after two working days have elapsed from the date of receipt of the request or drawing up an act of evasion or refusal to receive the request, an act of absence is drawn up explanations. In this case, the requirement to provide an explanation on the fact of a committed disciplinary offense, an act on the employee's evasion or refusal to receive a request, or an act on refusal to provide an explanation on the fact of a committed disciplinary offense, is signed by the employer's representative. In accordance with subparagraph 40) paragraph 1 of Article 1 of the Labor Code, employer representatives are individuals and (or) legal entities authorized on the basis of constituent documents and (or) a power of attorney to represent the interests of the employer.

Only if the above-mentioned procedure for the imposition of disciplinary punishment is followed, an act of the employer on the imposition of disciplinary punishment is issued, which is announced to the employee against signature within three working days from the date of its issuance, or a copy of the order must be sent to the employee by courier mail, postal, fax, e-mail and other information and communication technologies, or in the form of an electronic document certified by an electronic digital signature.

Due to violations of the disciplinary procedure committed by the employer, the board came to the correct conclusion about the validity of the stated requirements.

Compliance with the pre-trial dispute settlement procedure

The practice of applying the requirements of Article 159 of the Labor Code

Article 148 of the CPC 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 CPC, the application must contain information on compliance with the pre-trial procedure for contacting the defendant, if this is established by law or provided for by 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 microenterprise 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. a legal entity, and for unresolved issues or non–fulfillment of the decision of the conciliation commission - by the courts.

That is, in disputes arising between an employer and an employee of a microenterprise 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 specifics 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.

Jurisdiction

In accordance with paragraph 5 of the regulatory resolution of the Supreme Court of the Republic of Kazakhstan "On certain issues of the application of legislation by courts in the resolution of labor disputes" dated October 6, 2017 No. 9 (hereinafter referred to as NP), claims for disputes arising from labor relations are subject to filing with the court according to the general rules of civil procedure at the location of the defendant, a legal entity the person or place of residence of the employer of the individual acting as a defendant in the dispute.

According to Part 2 of Article 29 of the CPC, a claim against a legal entity is filed in court at the location of the legal entity according to the constituent documents and (or) the address entered in the National Register of Business Identification Numbers.

When lawsuits are filed at the location of a branch or representative office in accordance with the procedure provided for in part three of Article 30 of the CPC, only legal entities may be defendants.

Questions 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. The claim for recovery of damages, payment for overtime, compensation for moral damage has been transferred to the jurisdiction of the inter-district Court for Civil Cases of Astana city for consideration on the merits.

The court's ruling is correct, since it has been established that the defendant is a legal entity located and registered at the address: Astana, D.Konaeva Street, claims for disputes arising from labor relations are subject to filing with the court according to the general rules of civil procedure at the defendant's location.

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 rights and performs all duties of the employer on behalf of this legal entity. Consequently, an employee has the right to file a claim at the location of a branch of a foreign legal entity, having previously verified 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 case of rehabilitation or bankruptcy of the employer.

Thus, by virtue of the provisions of Part 8 of Article 35 of the CPC, cases on disputes arising within the framework of rehabilitation and bankruptcy procedures, including the recognition of transactions concluded by the debtor or a person authorized by him, as invalid, on the return of the debtor's property, on the recovery of receivables from claims of a bankrupt or rehabilitation manager, are considered by the same judge, which have issued a decision on the application of a rehabilitation procedure or on declaring the debtor bankrupt, with the exception of dispute cases, the jurisdiction of which is established by Article 31 of the CPC.

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

Returning the claim, the court pointed out that the decision of the Council of Ministers of the Aktobe region applied a rehabilitation procedure to the Partnership, and therefore, in accordance with part 8 of Article 35 of the CPC, the case is subject to consideration by the economic court.

Indeed, a rehabilitation procedure was applied to the Partnership by the decision of the Council of Ministers of the Aktobe region Court of October 14, 2016, which entered into force.

By virtue of the provisions of sub-paragraphs 5, 7 of Article 67 of the Law of the Republic of Kazakhstan "On Rehabilitation and Bankruptcy", the court in the rehabilitation procedure accepts cases on property disputes in which the debtor acts as a defendant, and also 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 is a disagreement between an employee (employees) and an employer (employers), including those who previously had an employment relationship, on the application of labor legislation of the Republic of Kazakhstan, the fulfillment 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 an employment relationship, is based on the norms of labor legislation and the terms of employment contracts and is not related to the implementation of a rehabilitation procedure.

Since the court incorrectly applied the provisions of part 8 of Article 35 of the CPC, by the ruling of the judicial board of March 12, 2021, the court's ruling was canceled and the issue was referred 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 an employment relationship (about 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 CPC do not apply to labor disputes.

State duty

According to the requirements of paragraph 7 of Article 610 of the Tax Code, a state fee is charged for 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 harm is a violation, diminution or deprivation of personal non–property benefits and rights of individuals.

According to the requirements of Article 149 of the CPC, a document confirming payment of the state fee is attached to the claim.

In accordance with subparagraph 1) of Article 616 of the Tax Code, plaintiffs are exempt from paying state duties in courts for claims for recovery of wages and other claims related to work.

In case of satisfaction of the claim, the court, in accordance with Article 117 of the CPC, is obliged to collect a state fee to the state revenue from the defendant, who is not exempt from its payment.

There are individual cases when courts, in violation of subparagraph 2) of part 1 of Article 149 of the CPC, accept claims for court proceedings without paying a state fee.

It follows from the case file that A. filed a lawsuit against the LLP to recover wages, compensation for downtime, penalties, and 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 Board for Civil Cases of the Almaty City Court, with LLP in favor of A. wage arrears, penalties, compensation for moral damage, and expenses related to the representative's assistance have been collected.

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

Regulatory framework

The main regulatory legal acts to be applied in the consideration of cases of the generalized 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 CC);

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

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

On Taxes and other mandatory payments to the Budget (Tax Code) dated December 25, 2017 No. 120-VI SAM (hereinafter – NK);

Business Code of October 29, 2015 No. 375-V SAM;

The Code of the Republic of Kazakhstan dated July 7, 2020 No. 360-VI SAM "On the health of the people and the healthcare system";

The Law of the Republic of Kazakhstan "On Trade Unions";

The Law of the Republic of Kazakhstan dated April 2, 2010 No. 261-IV "On enforcement proceedings and the status of bailiffs";

The Law of the Republic of Kazakhstan dated July 14, 1997 No. 155-I "On Notary";

The Law of the Republic of Kazakhstan dated April 22, 1998 No. 220-1 "On Limited and Additional Liability Partnerships";

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

Normative resolutions of the Supreme Court of the Republic of Kazakhstan: "On certain issues of the application of legislation by courts in the resolution of labor disputes" dated October 6, 2017 No. 9; "On the application by courts of legislation on compensation for moral damage" dated November 27, 2015 No. 7; "On judicial decision in civil cases" dated July 11, 2003 No. 5; "On the application by the courts of the Republic of Kazakhstan of legislation on court costs in civil cases" dated December 25, 2006 No. 9.

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