Court Guidance for Dealing With Redundancies / Reductions in Force

In recent years Russian courts have seen an increase in the number of dismissed employees claiming reinstatement. Most cases involve redundancy dismissals, reflecting a growth in the number of employers dealing with restructurings, reductions in force, and cost reductions.

As a result, courts have been able to issue a considerable amount of legal precedent. From that, employers that comply with some basic principles are likely to prevail in a dispute.

Courts are likely to support an employer who can show with evidence that the employer fully complied with redundancy procedures, specifically:

1. an internal staff order confirming the decision to make the position(s) redundant was issued;
2. the employee was notified of the forthcoming redundancy in writing no later than two months before the planned termination date;
3. the employer offered the employee in writing all suitable vacant positions;
4. the employer notified the State Employment Center no later than two months before the employment termination;
5. the shop-floor trade union’s reasoned opinion was requested (where there is a formed trade union);
6. where applicable, an appropriate selection procedure was followed and any pre-emption right or protected employee category was observed;
7. a severance payment was paid to the employee; and
8. HR formalities to be completed on the last day of the employee’s work were observed.

A court will usually disregard an employee’s arguments on the unfairness of the dismissal where the employer has complied with this procedure. It is the exclusive right of the employer to take a decision to change the personnel structure, staffing, number of employees, etc. The rationale for this cannot be challenged by the employee. To stand a realistic chance of success in a claim, an employee will need to show a failure to comply with the redundancy procedure.

Comment

Case law has made it clear that employers that terminate for redundancy reasons will stand a very good chance of defending a legal claim brought by an employee as the court should not interfere with that reasoning. However, this is conditional on the employer very accurately complying with the statutory redundancy procedures referred to above—just one omission from which may lead to a finding of illegal dismissal and reinstatement.

Written by Irina Anyukhina of ALRUD Law Firm and Roger James of Ogletree Deakins