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Introduction of Reduced Day (Week)

In present conditions of economic recession any employer naturally desires to reduce a payroll fund.

Subject to specified provisions of the Labor Code of the Russian Federation, the employer has a right to introduce part time day (shift) and/or reduced week (art. 74 of the Labor Code of the Russian Federation). In this type of employment the salary amount is figured proportionally to hours worked, i.e. degressive salary (art. 155 of the Labor Code of the Russian Federation) allows to reduce labor costs.

Conditions for Introduction of Reduced Day (Week)

The introduction of reduced time is not authorized unless the following conditions are present simultaneously:

1. First, introduction of reduced time is unilateral (at initiative of employer) amendment to labor agreement. Such amendment is authorized by law only for the reasons related to organizational or processing changes in working conditions which do not allow to continue the initial terms of labor agreement.

Therefore, the first condition for introduction is change in working conditions which are not due exclusively to finance reduction. It can be, for example, subdivision (department) liquidation, discontinuance of a particular (several) production lines. In the case of court proceedings the employer has to prove the event of organizational or processing changes occurred as well as impossibility to continue the initial terms of agreement in the changed conditions.

2. Second, introduction of reduced time is authorized only if it allows to avoid mass dismissals. The legislator asserts work position preservation as an objective of reduced time.

Introduction of reduced time can be held illegal in case if organizational or processing changes will result will result in dismissal of particular workers but not in mass lay-offs.

The criteria for a dismissal to be mass are provided by "Statute on organizational management in assistance to employment in conditions of mass release" approved by the Order of the Government of the Russian Federation on February 5, 1993 #99.

The principal criteria of mass release are headcount of persons dismissed due to enterprise liquidation or staff redundancy during a specified calendar period as follows:

  • liquidation of enterprise of any legal form with staff numbers 15 and more persons;
  • staff redundancy in the following numbers: 50 or more persons in course of 30 calendar days; 200 and more persons in course of 60 calendar days; 500 and more persons in course of 90 calendar days;
  • dismissal of more than 1% of total staff number due to liquidation of enterprise or staff redundancy in course of 30 calendar days in regions where the total number of employed is less than 5 000 persons.

It is obvious that mass criteria do not apply to small business where the numbers of employed are below the marked figures. In default of mass criterion they are not authorized to introduce reduced time.

Indeed this provision was incorporated in the Labor Code of the Russian Federation in order to prevent a one-time release of a great number of workers on a labor market. In the actual situation the practice can handle this matter in a different way: in view that reduced time is preferable to dismissal due to staff redundancy, appreciation of mass criteria can be considered as labor discrimination and violation of small business employees' rights. Thus, I believe, while deciding on introduction of reduced time in small business the mass criteria should be appreciated with due consideration of enterprise particularities, i.e. on the basis of the particular enterprise staff numbers.

Employer's decision and its justification are to be executed in written.

The reduced time deadline is set by law and equals to 6 months. The employer sets in his order a specific term which can not exceed the deadline. By the period expiracy the employees should be changed to full time.

Procedures for Introduction of Reduced Day (Work)

In view to prevent the event when the introduction of reduced time is held illegal the employer has to follow the following procedure:

  1. Formalization of arrangements related to organizational or processing changes in work conditions (production cutback, liquidation of subdivision, etc.)
  2. Evaluation of mass criterion and formalization of such decision.
  3. Notification of employees on future day (work) reduction against signature. The notification should be done by a general local act (order) which provides causes for labor agreement amendments and their effective date.
  4. 2 months prior to introduction of reduced time the employer has to notify the relevant local inspection on work and employment. The notification should specify number of persons introduced to reduced time,list of positions, causes for introduction of reduced time.
  5. 2 months posterior to official notification on introduction of reduced time the employer introduces reduced time by his order and notify employees against signature.

At employee's refusal to continue work on condition of reduced time the labor agreement terminates in virtue of art. 81.1.2 of the Labor Code of the Russian Federation, i.e. staff redundancy procedures. Herewith the employee is entitled to all the guarantees and compensations provided under art. 178, 180 of the Labor Code of the Russian Federation:

  • dismissal payment in the amount of average monthly salary;
  • retention of average monthly salary during the period of placement which can not exceed two months upon the date of dismissal (inclusive of dismissal payment);
  • in exceptional cases when a worker applies to employment service authority within a two-weeks period upon the date of dismissal and the named authority fails to employ him, by the decision of the named authority he retains his average monthly salary for the third month upon the date of dismissal.

COVID-19, Employment Disputes, Employment Law, Foreign Labor, HR Records Keeping, Reduction of Staff

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