Termination of an employment contract at the initiative of the employer in the event of the commission of culpable acts or inaction of the employee in the interests of a third party contrary to the interests of the employer

Termination of an employment contract at the initiative of the employer in the event of culpable actions or inaction by an employee serving monetary or commodity valuables, as well as using his official position in his own interests or in the interests of a third party contrary to the interests of the employer in return for obtaining material or other benefits for himself or others, if these actions or inaction give grounds for loss of trust to him from the employer (subparagraph 13) of paragraph 1 of Article 52 of the Labor Code)

The Law of the Republic of Kazakhstan dated May 4, 2020 No. 321-VI SAM amended and supplemented some legislative acts of the Republic of Kazakhstan on labor issues.

The amendments to the Labor Code of November 23, 2015, deleted the number "13)" in paragraph 6 of Article 53.

Thus, in accordance with 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) paragraph 1 of Article 52 of the Labor Code, is carried out in compliance with the procedure for applying disciplinary action provided for in article 65 and the requirements of article 66 of the Labor Code.

That is, upon termination of an employment contract under subparagraph 13) of paragraph 1 of Article 52 of the Labor Code, compliance with the preliminary procedure for applying disciplinary penalties provided for in articles 65 and 66 of the Labor Code is not required.

K. worked as a representative of JSC

By an order dated December 22, 2022, the employment contract with her was terminated on the basis of subparagraph 13) of paragraph 1 of Article 52 of the Labor Code.

In satisfying K.'s claim, the court of first instance concluded that the plaintiff had been disciplined in violation of the procedure for applying disciplinary penalties provided for in article 65 of the Labor Code, since termination of an employment contract on the grounds provided for in subparagraph 13) of paragraph 1 of Article 52 of the Labor Code was classified as disciplinary action. The employer violated the deadline for disciplinary liability.

By overturning the decision of the court of first instance and dismissing the claim, the judicial board for civil cases of the Astana City Court proceeded from the fact that the court applied subparagraph 4) of paragraph 1 of Article 64 of the Labor Code in the old version as a rule of substantive law, according to which subparagraph 13) of paragraph 1 of Article 52 of the Labor Code until May 2020 it referred to disciplinary action, for which the employer has the right to apply disciplinary action in the form of termination of the employment contract.

By the same Law of May 4, 2020, subparagraph 13) of Article 52 of the Labor Code was supplemented with the following words, "as well as using his official position in his own interests or in the interests of a third party contrary to the interests of the employer in return for obtaining material or other benefits for himself or others."

In addition, article 53 of the Labor Code has been supplemented with paragraph 7-2 as follows: termination of an employment contract on the grounds provided for in subparagraph 13) of paragraph 1 of Article 52 of the Labor Code must be confirmed by an internal investigation report indicating the reasons confirming the commission of culpable acts or omissions by the employee. The internal investigation procedure is established by an act of the employer.

This law entered into force ten calendar days after the date of its first official publication, that is, from May 16, 2020.

Thus, in accordance with subparagraph 13) of paragraph 1 of Article 52 of the Labor Code, an employment contract with an employee at the initiative of the employer may be terminated in the following cases: committing culpable acts or omissions of an employee serving monetary or commodity values, as well as using his official position in his own interests or in the interests of a third party contrary to the interests of the employer in return for receiving material or other benefits for himself or others, if these actions or omissions give grounds for the loss of confidence in him on the part of the employer.

However, when considering the case, the courts did not take into account these changes in the law, which was the basis for the cancellation of the court decision.

A. filed a lawsuit against the LLP to declare illegal and cancel the order dated June 13, 2022, reinstate him as a category I engineer in the eastern operational district of the LLP, and collect wages for the time of forced absenteeism.

By the decision of the Almaly district Court No. 2 of Almaty dated October 21, 2022, which was left unchanged by the decision of the Judicial Board for Civil Cases of the Almaty City Court dated February 1, 2023, the claim was denied.

According to the employment contract dated March 19, 2007, A. was hired by LLP as a locksmith for the maintenance of heating networks of the 4th group. His last position in the LLP is an engineer of the 1st category of the eastern operational district.

By the order of LLP dated June 13, 2022, the employment contract with A. was terminated under subparagraph 13) of paragraph 1 of Article 52 of the Labor Code, as the basis for the protocol of June 7, 2022, which was missing in the case file.

The publication of the contested order dated June 13, 2022 was preceded by a memo addressed to the General Director of LLP on the audit of the recalculation performed by the Consumer Service Center (hereinafter referred to as the PSC) in relation to the Consumer.

As a result of the inspection, it was established that on April 11, 2022, the engineer of the eastern operational district, A., bypassing the electronic system (using which internal document management is carried out), sent via WhatsApp messenger to the chief specialist of the PSC, M. Act No. 002515 of November 5, 2021 on disconnecting the Consumer from the heat supply system and Act No. 037946 of February 1, 2022 on connecting the Consumer to the heat supply system.

The refusal to satisfy the claim was motivated by the local courts' conclusions that the application of disciplinary punishment in the form of termination of the employment contract against A. was lawful, and disciplinary liability took place without violating the procedure and time limits for disciplinary punishment established by the Labor Code.

By the decision of the judicial board of the Supreme Court of the Republic of Kazakhstan, the decision of the Almaly district court of Almaty dated October 21, 2022 and the decision of the judicial board for Civil Cases of the Almaty City Court dated February 1, 2023 were canceled, and a new decision was made to satisfy the claim.

The reason for the cancellation of the judicial acts in the case was that the local courts had incorrectly applied the norms of substantive law.

Thus, in the legal assessment of the legality of A.'s dismissal, with the wording "for committing culpable acts related to using his official position for his own selfish interests or in the interests of a third party contrary to the interests of the employer in return for obtaining material or other benefits for himself or others, if these actions give grounds for the loss of confidence in him on the part of the employer" They ignored the fact that A. does not belong to the category of LLP employees with whom termination of an employment contract is permissible on the grounds provided for in subparagraph 13) of paragraph 1 of Article 52 of the Labor Code.

Thus, the following categories of employees who have committed culpable acts or omissions giving grounds for loss of trust on the part of the employer are classified by the legislator as subjects of labor relations, an employment contract with which can be terminated using subparagraph 13) of paragraph 1 of Article 52 of the Labor Code: 1. employees who serve monetary or commodity values; 2. employees who using their official position in their own interests or in the interests of a third party contrary to the interests of the employer in return for obtaining material or other benefits for themselves or others.

As established, by virtue of his official (functional) powers and duties, A. was not an employee who serviced monetary or commodity valuables and had direct access to monetary transactions.

Also, the case did not establish that A., when executing acts No. 002515 of November 5, 2021, No. 037946 of February 1, 2022, used his official position in his own interests or in the interests of a third party contrary to the interests of the employer in return for obtaining material or other benefits for himself or others.

After making additions to subparagraph 13) of Article 52 of the Labor Code as follows, "as well as using his official position in his own interests or in the interests of a third party contrary to the interests of the employer in return for obtaining material or other benefits for himself or others," paragraph 23 of the regulatory decree of the Supreme Court of the Republic of Kazakhstan should also be supplemented.

When terminating an employment contract at the initiative of the employer under subparagraph 13) of paragraph 1 of Article 52 of the Labor Code, the courts should pay attention to the employer's compliance with the internal investigation procedure, which must be regulated in advance by the employer's act in the form of a Provision on conducting an investigation.

The basis for issuing an order to terminate an employment contract on the grounds provided for in subparagraph 13) of paragraph 1 of Article 52 of the Labor Code must be an act of internal investigation indicating in it the justifications confirming the commission of culpable acts or omissions by the employee.

Termination of the employment contract is possible in the presence of the following circumstances: 1) committing culpable acts or omissions of an employee serving monetary or commodity valuables, if these actions or omissions give grounds for the loss of confidence in him on the part of the employer; 2) or using his official position in his own interests or in the interests of a third party contrary to the interests of the employer in return for obtaining material or other benefits for himself or others if these actions or omissions give grounds for the loss of confidence in him on the part of the employer; 3) committing culpable acts or omissions of an employee serving monetary or commodity valuables, as well as using his official position in his own interests or in the interests of a third party contrary to the interests of the employer in return for obtaining material or other benefits for himself or others, if these actions or omissions give grounds for loss of confidence in him on the part of the employer.

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, the state duty is levied 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 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 Civil Code);

The 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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