In its recent Ruling1, the Russian Constitutional court clarified the provisions of the Labor Code regarding the conclusion of a fixed-term employment contract with persons who are employed to perform certain work when the date of completion of work cannot be determined by a specific date (paragraph 8, part 1 of article 59 of the Labor Code).
A private security company concluded an employment contract with its employee for 1 year. Employee’s job duties were based on security services agreements concluded by the employer with its clients. At the end of each term, the employer signed new employment contracts with the employee for each subsequent calendar year with a period of validity from January 1 to December 31. The employer justified this approach by the fact that contracts with counter-parties were limited by a certain period of service provision, which causes the conclusion of a fixed-term employment contract with an employee in accordance with paragraph 8, part 1 of article 59 of the Labor Code.
In the course of judicial proceedings on the employee’s claim for reinstatement and recognition of an employment contract concluded for an indefinite period, the courts supported the employer.
The Constitutional court recognized this position as a violation of the balance of constitutional rights and freedoms of the employee and employer. The main conclusions of the Constitutional court are as follows:
- Limited duration of services contracts concluded by the employer while continuing to carry out its statutory activities:
- does not justify the fixed employment period for employees, who are involved in providing services under such contracts,
- does not imply that it is impossible to establish an employment relationship for an indefinite period,
- and therefore, cannot serve as a sufficient basis for concluding fixed-term employment contracts with employees whose employment function is related to the performance of relevant contractual obligations.
- Linking the term of an employment contract with the term of the service agreement concluded by the employer would actually lead to the fact that the employee’s status would depend solely on the result of the commercial negotiations between the employer and its counter-party. Thus, the employee would be forced to share the employer’s business risks, which would lead to distortion of the essence of labor relations and violation of the balance of constitutional rights and freedoms of the employee and the employer.
- The fact that multiple fixed-term employment contracts are concluded to perform work in the same position (profession, specialty), as a rule, indicates the absence of circumstances that objectively prevent the establishment of employment relations for an indefinite period. A similar conclusion was made earlier by the Plenum of the Supreme Court of the Russian Federation in its ruling of March 17, 2004 No. 2 (paragraph 4 of clause 14).
1Ruling of May 19, 2020 No. 25-П