Recovery of Wages, Severance Payments, Pension Contributions, Social Medical Insurance Payments, Penalties, and Moral Damages
K. filed a lawsuit against LLP seeking recovery of wages, severance payments due to staff reduction, pension contributions, social medical insurance payments, penalties, and moral damages.
By a ruling of the Balkhash City Court of the Karaganda Region dated August 19, 2022, K.'s claim was returned with all accompanying documents due to the failure to provide a certificate of wage arrears and the absence of a decision from the conciliation commission.
Upon refiling, by a ruling of the Balkhash City Court of the Karaganda Region dated September 27, 2022, the application was again returned to the claimant due to non-compliance with the pre-trial dispute resolution procedure. In returning the application, the court noted that the case file contained a copy of the claimant's application to the conciliation commission. However, there was no document confirming its proper submission to the employer for review, nor was there a decision from the conciliation commission.
On October 14, 2022, the claimant refiled the lawsuit. By a ruling of the Balkhash City Court of the Karaganda Region dated October 27, 2022, a mediation agreement between the parties was approved.
However, the case file contained a letter from a state labor inspector indicating that, according to the Unified Register of Inspection Subjects and Objects (ERSOP) of the General Prosecutor’s Office of the Republic of Kazakhstan and a certificate on the category of business entity from the Ministry of National Economy of the Republic of Kazakhstan, the LLP was registered as a microenterprise.
Since the LLP was classified as a microenterprise, pre-trial resolution of the labor dispute through the conciliation commission was not required.
By a ruling of Court No. 2 of the city of Uralsk dated July 4, 2022, D.'s claim against LLP "Qurylis Company" for wage arrears was returned to the claimant due to a violation of the pre-trial procedure for filing a lawsuit.
By a ruling of the Judicial Panel on Civil Cases of the West Kazakhstan Regional Court dated August 9, 2022, the ruling of July 4, 2022, was annulled, and the case materials were returned to the same court for substantive consideration.
The first-instance court, in returning the claim, relied on Article 159(1) of the Labor Code, citing the requirement for LLPs to refer disputes to a conciliation commission.
However, the court did not consider that the claimant was the sole founder and director of the legal entity, meaning that referral to the conciliation commission was unnecessary.
By a ruling of Court No. 2 of the Bayterek District dated November 1, 2021, U.’s claim against LLP for wage recovery was returned due to the indisputability of the claims and the requirement to comply with the pre-trial dispute resolution procedure through a notary.
By a ruling of the appellate court dated January 20, 2022, the district court's ruling of November 1, 2021, was annulled, and the case materials were returned to the same court for substantive consideration.
According to Article 92-1(2)(9) of the Law of the Republic of Kazakhstan "On Notaries," a notary issues an executive inscription or a corresponding ruling for indisputable claims for accrued but unpaid wages and other payments due to an employee.
As indicated in the claim, no employment contract was concluded between the parties, meaning that wages were not formally accrued. The wage recovery claim was based on the work time sheet and travel log. These circumstances indicate the existence of an employment relationship between the claimant and the defendant and the presence of wage arrears. Therefore, the dispute should be resolved in court.
Compliance with Pre-Trial Dispute Resolution Procedures
Practice of Applying Article 159 of the Labor Code
Article 148 of the Civil Procedure Code (CPC) specifies the requirements for the form and content of a claim. According to Article 148(1)(6) CPC, an application must include information on compliance with the pre-trial dispute resolution procedure if required by law or contract.
According to Article 159(1) of the Labor Code, individual labor disputes are reviewed by conciliation commissions, except for disputes involving employees of microenterprises, non-profit organizations with fewer than fifteen employees, domestic workers, sole executive bodies of legal entities, heads of executive bodies of legal entities, and other members of collegial executive bodies of legal entities. Unresolved issues or non-compliance with conciliation commission decisions are referred to courts.
Thus, disputes between employees and employers of microenterprises, non-profit organizations with fewer than fifteen employees, domestic workers, sole executive bodies of legal entities, heads of executive bodies of legal entities, and other members of collegial executive bodies do not require prior consideration by a conciliation commission.
This requirement also does not apply to certain categories of employees whose work is regulated by the Labor Code of the Republic of Kazakhstan with specific provisions in 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 Normative Resolution of the Supreme Court of the Republic of Kazakhstan "On Certain Issues of the Application of Legislation by Courts in Resolving Labor Disputes" dated October 6, 2017, No. 9, lawsuits arising from labor relations must be filed under the general rules of civil procedure at the location of the defendant—the legal entity’s governing body or the individual employer’s place of residence.
According to Article 29(2) CPC, a claim against a legal entity is filed at the entity’s registered location as per its founding documents and/or address listed in the National Business Identification Number Register.
When filing claims at the location of a branch or representative office under Article 30(3) CPC, only legal entities can be defendants.
Jurisdictional issues in cases of this category do not present significant difficulties.
For instance, by a ruling of the Ust-Kamenogorsk City Court, a civil case in a lawsuit by Zh. against LLP for damages, overtime payment, and moral damages was transferred for jurisdiction to the Interdistrict Civil Court of Astana for substantive review.
The ruling was correct as it was established that the defendant—a legal entity—was registered at an address in Astana, and lawsuits arising from labor relations must be filed under the general civil procedure rules at the defendant’s location.
Furthermore, courts should consider Article 19 of the Labor Code, which states that the head of a branch or representative office of a foreign legal entity exercises all employer rights and obligations on behalf of the entity. Consequently, an employee may file a claim at the location of the foreign legal entity’s branch, verifying the branch head’s authority to represent the entity.
Jurisdiction of Labor Disputes in Cases of Rehabilitation or Employer Bankruptcy
According to Article 35(8) CPC, cases related to rehabilitation or bankruptcy procedures, including challenges to transactions made by the debtor or its authorized representative, recovery of debtor assets, and collection of accounts receivable by the bankruptcy or rehabilitation manager, are handled by the same judge who ruled on the rehabilitation procedure or bankruptcy declaration, except for cases whose jurisdiction is specified by Article 31 CPC.
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