The procedure for the provision of personnel services  

Starting from 2021, labor legislation provides for a different form of labor relations within the framework of the provision of personnel as one of the types of borrowed labor. In accordance with article 137-1 of the Labor Code, it is allowed to involve employees through the sending party, which is one of the parties to the contract for the provision of personnel services.

It is worth drawing the attention of the courts to the fact that only a legal entity or a branch of a foreign legal entity registered in accordance with the procedure established by the legislation of the Republic of Kazakhstan, engaged in the provision of personnel services, can act as a sending party.

According to subparagraph 69-1) of paragraph 1 of Article 1 of the Labor Code, the provision of personnel is the referral of an employee under a contract for the provision of personnel services by the sending party to the receiving party in order for him to perform a labor function in the interests, under the management and control of the receiving party.

The relationship between the sending party and the receiving party is determined by the contract for the provision of personnel services, which is concluded between the sending party and the receiving party in accordance with the civil legislation of the Republic of Kazakhstan. At the same time, the provisions of the contract for the provision of personnel services should not contain provisions that worsen the rights of employees of the sending party in comparison with the labor legislation of the Republic of Kazakhstan. If such cases are identified, the courts should recognize these provisions as invalid and not applicable.

The sending party acts as an employer in relation to the employee of the sending party, despite the fact that the employee of the sending party actually performs the labor function defined in the employment contract with the receiving party, in the interests, under the management and control of the receiving party.

On the basis of subparagraph 52-1) of paragraph 1 of Article 1 of the Labor Code, the receiving party is an individual or a legal entity, an individual entrepreneur, including a peasant or farm, who employs employees of the sending party in accordance with a contract for the provision of personnel services. The contract for the provision of personnel services specifies the criteria for attracting employees and the terms of payment for employees of the sending party, which should not be lower than the basic salary of employees of the receiving party in a similar position, appropriate qualifications, specialty or profession, complexity, quantity and quality of work performed (Article 103 of the Labor Code).

Sending employees of the sending party to the receiving party is allowed in the following cases::

1) to perform household work for individuals;

2) for the duration of a certain job;

3) for the duration of the replacement of a temporarily absent employee;

4) for the duration of seasonal work.

In practice, it is common to conclude an employment contract for employees from the sending party for a period during the performance of a certain job in accordance with the terms of the contract for the provision of personnel services. Within the term of the contract for the provision of personnel services, the receiving party has the right to refuse the services of a specific employee of the sending party, which will entail termination of the employment contract upon expiration on the basis of subparagraph 2) of Article 49 of the Labor Code.

In this case, the date of completion of work by the employee of the sending party at the receiving party is determined by the receiving party without explaining the reasons.

In accordance with paragraph 4 of Article 137-1 of the Labor Code, the date of completion of work by an employee of the sending party is the day indicated in the notification sent by the receiving party to the sending party on the expiration of the period for attracting employees of the sending party by the receiving party. The sending party, on the basis of a notification from the receiving party on the date specified in the notification of termination of work by an employee of the sending party, issues an order to terminate the employment contract, regardless of the fact that the contract for the provision of personnel services continues to be valid and another employee of the sending party may be involved. If a labor dispute arises to challenge an order to terminate an employment contract or other controversial issues, the person who previously had an employment relationship applies to the conciliation commission from the sending party with whom the employment contract was concluded.

The receiving party is not a party to the employment relationship, however, it is obliged to respect the rights of employees of the sending party when regulating the work and rest regime provided for by the labor legislation of the Republic of Kazakhstan, as well as to comply with the requirements for safe performance of work in accordance with Article 182-1 of the Labor Code.

The employment relations of the employees of the sending party are carried out in accordance with the Labor Code, the laws of the Republic of Kazakhstan, the acts of the receiving party and the employment contract.

B. filed a lawsuit with the LLP, a third party on the side of the defendant, the Office of Labor Inspection, with a claim for recognition as illegal and cancellation of the order to terminate the employment contract, reinstatement at work, and recovery of compensation for the time of forced absenteeism.

It follows from the judicial acts that on February 1, 2018, an employment contract was concluded between the LLP and the plaintiff, according to which the employee was hired as a driver for a level II mobile repair shop. The term of the employment contract is until February 1, 2019, in accordance with the employment application.

On January 1, 2019, an additional agreement was concluded between the parties, which amended the main agreement in terms of the term and indexation of wages. The term of the employment contract has been extended for the duration of certain work under the contract with the customer of the office with which the employer has signed a contract for the provision of payroll administration services for local staff.

On July 7, 2020, the employer concluded another additional agreement with the employee, which amended the main employment contract. The term of the employment contract is set for the duration of a certain job in accordance with the employment application.

On October 26, 2022, the employer issued an order to terminate the employment contract dated February 1, 2018, effective November 1, 2022, due to the expiration of the employment contract.

The courts motivated the refusal to satisfy the claim as follows.

In accordance with paragraph 2 of Article 49 of the Labor Code, one of the grounds for termination of an employment contract is the expiration of an employment contract.

As follows from the case file, the plaintiff, according to the employment contract dated February 1, 2018, was hired by LLP as a "machinist-driver of a level II mobile repair shop."

By an additional agreement dated July 7, 2020, paragraph 2.1. of the employment contract dated February 1, 2018 was amended to establish the plaintiff's job for "the duration of a certain job, in accordance with the employment application."

The defendant, in accordance with the terms of the supplementary agreement dated July 7, 2020, according to the Contract for the provision of services, sent employees to another organization, namely to the Office.

At the same time, the plaintiff was aware that another organization represented the work in the supplementary agreement. The refusal of the services of this organization should be sent to the LLP.

On October 21, 2022, the executive director of the LLP received a notification from the Office that they no longer needed the services of the plaintiff, therefore they asked to terminate their employment relationship with him.

On October 26, 2022, the plaintiff was notified that the employment contract with him was terminated on November 1, 2022 due to the expiration of the employment contract. About which a notification was sent to him.

On October 27, 2022, the plaintiff was informed in writing of the order to terminate the employment contract and terminate the employment contract due to the expiration of the employment contract.

It follows from the judicial acts that on November 1, 2017, a contract was signed between the parties of the JSC and LLP for the provision of payroll administration services for local staff.  In accordance with paragraph 1 of the Annex to the Contract, "the Contractor provides the Company with services for the search and recruitment of local personnel, administration and payroll for local personnel."

In accordance with clause 5.4 of the Annex to the Contract, "The Company has the right to dismiss an individual from the contractor's staff at any time without giving reasons. In the event of such a refusal, the authorized representative of the Company shall send a written notification to the contractor indicating the date on which such an individual from among the contractor's staff must cease providing services and leave the Company."

According to paragraph 3 of the annex to the Contract: "The Company appoints an authorized representative of the Company (CPC), who will be responsible for all matters of this Contract."

In this regard, the Company exercised its right provided for in paragraphs 5.4 of the Annex to the Contract and refused the services of the personnel of the contractor, in particular, plaintiff B.

In this case, the employment relationship with the plaintiff was terminated legally.

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 against 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, the claim of Zh. The LLP was returned to the LLP on 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 on the basis of subparagraph 2 of part 1 of Article 152 of the PC due to the jurisdiction of the 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 Civil Code);

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";

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

"On some 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 the court decision on 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.

Attention!  

      The Law and Law Law Firm draws your attention to the fact that this document is basic and does not always meet the requirements of a specific situation. Our lawyers are ready to assist you with legal advice and drafting any legal document that suits your situation.  

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Attention!   

       Law and Law Law Law draws your attention to the fact that this document is basic and does not always meet the requirements of a particular situation. Our lawyers are ready to assist you in legal advice, drawing up any legal document suitable for your situation.  

 For more information,  please contact a Lawyer / Attorney by phone: +7 (708) 971-78-58; +7 (700) 978 5755, +7 (700) 978 5085. 

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