Termination of Employment by an Employee with an Active Disciplinary Sanction
Termination of the Employment Contract Due to Repeated Failure or Improper Performance of Job Duties by an Employee with a Disciplinary Sanction (Subparagraph 16), Paragraph 1, Article 52 of the Labour Code)
According to Subparagraph 16), Paragraph 1, Article 52 of the Labour Code of the Republic of Kazakhstan, the employer may unilaterally terminate an employment contract if an employee, who has an active disciplinary sanction, repeatedly fails or improperly performs their job duties without valid reasons.
Termination under this provision is lawful only if the following conditions are met:
- The employee has committed a disciplinary offense, meaning a failure or improper performance of job duties.
- The employee has an active (unremoved and unexpired) disciplinary sanction at the time of the repeated violation.
- The rules and timeframes for imposing disciplinary sanctions have been observed.
In other words, the legislator has established an enhanced form of disciplinary liability—dismissal—for an employee who commits a repeated offense while having an outstanding disciplinary sanction.
Case of A.:
Employee A. filed a lawsuit against the University, seeking annulment of termination orders, reinstatement, and recovery of wages for the period of forced absence.
It was established that A. was subjected to three disciplinary sanctions:
- Reprimand issued on November 30, 2022;
- Severe reprimand on January 5, 2023;
- Termination of employment on February 2, 2023, under Subparagraph 16), Paragraph 1, Article 52 of the Labour Code.
The reprimand from November 30, 2022, was lawfully imposed. However, the local courts failed to consider the lack of fault on the part of A. regarding the delayed repair of medical equipment when rejecting the annulment of the severe reprimand issued on January 5, 2023.
The termination order dated February 2, 2023, cited improper performance of duties identified during an audit. While these violations were confirmed, the audit covered the period from July 1, 2021, to July 31, 2022, during which A. had no active disciplinary sanctions. The first sanction was only imposed on November 30, 2022.
Thus, the element of repetition was absent, and the employer had no legal grounds to terminate A.’s employment under Subparagraph 16), Paragraph 1, Article 52 of the Labour Code.
The Supreme Court’s Cassation Panel reversed the lower courts’ decisions, annulled the orders from January 5, 2023, and February 2, 2023, and reinstated A. to his former position.
Case of M.:
Employee M. filed a lawsuit against a National Joint-Stock Company seeking annulment of disciplinary sanctions, reinstatement, payment of back wages, bonuses, and compensation for moral damages.
By a decision of the Kostanay City Court dated November 3, 2021, the claim was partially satisfied.The disciplinary orders were annulled, M. was reinstated, and the employer was ordered to pay back wages and compensation for moral damages.
However, the appellate court reversed this decision and dismissed the claim in the satisfied portion. The Supreme Court subsequently overturned the appellate decision and sent the case back for a new trial.
Upon retrial, the court correctly concluded that there was no repeated misconduct, but M.’s reinstatement was denied for the following reasons:
According to Paragraph 11 of the Supreme Court Regulatory Resolution, when resolving employment disputes, courts must distinguish between fixed-term and indefinite-term employment contracts.
Under Subparagraph 2), Paragraph 1, Article 30; Subparagraph 2), Article 49; and Paragraph 1, Article 51 of the Labour Code, the expiration of a fixed-term employment contract constitutes grounds for its termination.
Thus, reinstatement of an employee with a fixed-term contract is only possible within the effective period of that contract. If the contract has already expired by the time the dispute is reviewed, the employee is entitled to receive average wages only for the period from the date of unlawful dismissal to the date the employment contract expired.
In this case, M.’s employment contract was valid until November 25, 2021, and its expiration constituted a lawful basis for termination.
According to Paragraph 1, Article 161 of the Labour Code, an employer must pay a reinstated employee their average wages for the entire period of forced absence, but for no more than six months.
Accordingly, the court properly awarded M. average wages for the specified period.
Proposal for Uniform Judicial Practice:
To ensure consistency in the application of labour laws, it is proposed to amend the Supreme Court’s Regulatory Resolution as follows:
“Reinstatement of an employee whose fixed-term employment contract—concluded for at least one year, for a specific job, to temporarily replace an absent employee, or for seasonal work—was unlawfully terminated or ceased, is permissible only within the term of such contract. If the contract term has expired by the time the dispute is reviewed, the employee shall receive wages for the period from the date of unlawful dismissal to the expiration date of the employment contract.”
Here is the professional legal translation of the provided text:
Compliance with the Pre-Trial Dispute Resolution Procedure
Practice of Applying Article 159 of the Labour Code
Article 148 of the Civil Procedure Code (CPC) outlines the requirements for the form and content of a statement of claim. According to Part 6, Paragraph 1, Article 148 of the CPC, the statement of claim must indicate whether the pre-trial procedure for resolving the dispute has been followed if such a requirement is established by law or contract.
In accordance with Paragraph 1, Article 159 of the Labour Code of the Republic of Kazakhstan, individual labour disputes are subject to review by conciliation commissions, except for disputes between employers and employees of micro-business entities, non-profit organizations employing no more than fifteen workers, domestic workers, sole executive bodies of legal entities, heads of executive bodies of legal entities, and other members of collective executive bodies of legal entities. Unresolved issues or failure to comply with the decisions of conciliation commissions are subject to judicial review.
Thus, in disputes involving micro-business entities, non-profit organizations with no more than fifteen employees, domestic workers, and executive officials of legal entities, preliminary consideration by a conciliation commission is not required.
This requirement also does not apply to specific categories of workers whose labour relations are governed by the Labour Code of the Republic of Kazakhstan with particularities set by special laws and other regulatory legal acts, including military personnel, employees of special state and law enforcement agencies, and civil servants.
Jurisdiction
According to 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 Resolving Labour Disputes” dated October 6, 2017, No. 9, lawsuits arising from labour relations must be filed with the court based on the general rules of civil procedure at the defendant’s location—either the registered office of a legal entity or the residence of an individual employer.
Pursuant to Part 2, Article 29 of the CPC, claims against legal entities must be filed at the registered address indicated in the founding documents or in the National Business Identification Number Register.
When filing claims at the location of a branch or representative office under Part 3, Article 30 of the CPC, the defendants can only be legal entities.
Jurisdictional questions in this category of cases typically do not raise any difficulties.
For example, the Ust-Kamenogorsk City Court transferred a case brought by J. against an LLP concerning damages, overtime payment, and compensation for moral harm to the Interdistrict Civil Court of Astana for proper jurisdiction, as the defendant legal entity is registered at the address: Astana, D. Konayev Street.
Additionally, courts are advised to consider Article 19 of the Labour Code, which stipulates that the head of a branch or representative office of a foreign legal entity exercises all rights and fulfills all obligations of the employer on behalf of the foreign legal entity. Therefore, employees may file lawsuits at the location of the branch of the foreign legal entity after verifying the authority of the branch manager to represent the company.
Jurisdiction of Labour Disputes in Cases of Rehabilitation or Bankruptcy of the Employer
According to Part 8, Article 35 of the CPC, cases arising from rehabilitation or bankruptcy proceedings—including cases on invalidation of transactions made by the debtor or its authorized persons, recovery of the debtor’s assets, and collection of receivables by the bankruptcy or rehabilitation manager—must be considered by the judge who issued the decision on applying the rehabilitation procedure or declaring bankruptcy, except for cases under Article 31 of the CPC.
By a ruling of the Aktobe City Court dated February 15, 2021, the claim filed by J. against an LLP seeking annulment of dismissal orders, reinstatement, recovery of overtime wages, wages for forced absence, penalties, and compensation for moral harm was returned on the grounds of lack of jurisdiction under Subparagraph 2, Part 1, Article 152 of the CPC.
The court determined that a rehabilitation procedure had been applied to the LLP by a legally binding decision of the Specialized Interdistrict Economic Court (SIEC) of the Aktobe Region on October 14, 2016, and therefore, the case should be considered by the economic court in accordance with Part 8, Article 35 of the CPC.
However, according to Subparagraphs 5 and 7, Article 67 of the Law of the Republic of Kazakhstan "On Rehabilitation and Bankruptcy," the court handling the rehabilitation procedure accepts for its consideration disputes of a property nature in which the debtor is the defendant, as well as disputes between participants of the rehabilitation procedure.
According to Subparagraph 16), Paragraph 1, Article 1 of the Labour Code, a labour dispute is defined as a disagreement between an employee (or employees) and an employer (or employers), including those previously in an employment relationship, regarding the application of labour legislation, execution or modification of agreements, employment or collective contracts, and employer acts.
It was established that the dispute in this case arises from labour relations, is governed by labour legislation and employment contract terms, and is unrelated to the rehabilitation procedure.
Due to incorrect application of Part 8, Article 35 of the CPC, the Judicial Board overturned the lower court’s ruling on March 12, 2021, and remanded the case for reconsideration by the court of first instance.
In cases where the employer has been declared bankrupt or is undergoing rehabilitation, labour disputes (including those related to reinstatement, wage recovery, etc.) fall under the jurisdiction of general courts. The provisions of Part 8, Article 35 of the CPC do not apply to such disputes.
Here is the professional legal translation:
State Duty (Court Fees)
According to Paragraph 7, Article 610 of the Tax Code of the Republic of Kazakhstan (TC), a state duty is charged for non-property claims in the amount of 0.5 of the Monthly Calculation Index (MCI).
In accordance with Paragraph 1, Article 951 of the Civil Code of the Republic of Kazakhstan (CC), moral damage is defined as the violation, diminution, or deprivation of personal non-property rights and benefits of individuals.
As per Article 149 of the Civil Procedure Code of the Republic of Kazakhstan (CPC), a statement of claim must be accompanied by proof of payment of the state duty.
However, according to Subparagraph 1), Article 616 of the Tax Code, plaintiffs are exempt from paying the state duty in courts for claims related to the recovery of wages and other employment-related demands.
If the claim is satisfied, under Article 117 of the CPC, the court is obligated to recover the state duty from the defendant who is not exempt from such payment.
There are instances where courts have improperly accepted statements of claim without the payment of state duty, in violation of Subparagraph 2), Part 1, Article 149 of the CPC.
Case materials show that A. filed a claim against an LLP seeking recovery of wages, compensation for downtime, penalties, and compensation for moral damage.
By the decision of the Zhetysu District Court of Almaty city dated April 13, 2022, which was upheld by the Judicial Panel for Civil Cases of the Almaty City Court, the court ordered the LLP to pay A. outstanding wages, penalties, compensation for moral damage, and legal expenses.
The LLP was also ordered to make pension contributions and other mandatory payments for A.’s employment period from June 22, 2021, to August 2021.
Legal Framework
The key legal acts applicable to cases of this category include:
- 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;
- The Civil Procedure Code of the Republic of Kazakhstan, dated October 31, 2015, No. 377-V;
- The Labour Code of the Republic of Kazakhstan, dated November 23, 2015, No. 414-V ZRK;
- The Tax Code of the Republic of Kazakhstan, dated December 25, 2017, No. 120-VI ZRK;
- The Entrepreneurial Code of the Republic of Kazakhstan, dated October 29, 2015, No. 375-V ZRK;
- The Code on Public Health and Healthcare System of the Republic of Kazakhstan, dated July 7, 2020, No. 360-VI ZRK;
- The Law of the Republic of Kazakhstan “On Trade Unions”;
- The Law of the Republic of Kazakhstan “On Enforcement Proceedings and Status of Court Bailiffs,” dated April 2, 2010, No. 261-IV;
- The Law of the Republic of Kazakhstan “On Notaries,” dated July 14, 1997, No. 155-I;
- The Law of the Republic of Kazakhstan “On Limited and Additional Liability Partnerships,” dated April 22, 1998, No. 220-I;
- The Law of the Republic of Kazakhstan “On Joint Stock Companies,” dated May 13, 2003, No. 415;
- Regulatory Resolutions of the Supreme Court of the Republic of Kazakhstan:
- “On Certain Issues of the Application of Legislation by Courts in Resolving Labour 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 Decisions in Civil Cases,” dated July 11, 2003, No. 5;
- “On the Application by Courts of the Legislation on Court Expenses in Civil Cases,” dated December 25, 2006, No. 9.
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