On August 11, 2025, amendments to the Labor Code of the Russian Federation (hereinafter referred to as the "LC of the RF") entered into force. These amendments concern the provision of guarantees to part-time employees upon termination of an employment contract with them at their primary place of work due to the liquidation of the organization or redundancy or staff cuts at the organization.
The amendments were introduced by Federal Law No. 306-FZ of July 31, 2025 No. 306-FZ in order to implement the provisions of the Ruling of the Constitutional Court of the Russian Federation of November 22, 2024 No. 54-P (hereinafter referred to as the "Ruling"). The case was initiated by a compliant from a part-time employee who, upon dismissal from his primary place of work due to the redundancy or staff cuts, received severance pay in the amount of the average monthly earnings but was denied payment of the average monthly earnings for the period of job placement.
Resolving the issue of providing additional monetary guarantees to a part-time employee, the courts came to the conclusion that the applicant was employed by another employer, he was considered to be employed and, therefore, not entitled to the payment of the average monthly earnings for the second to sixth months from the day of dismissal. However, the Constitutional Court of the Russian Federation clarified that the continuation of work of a part-time employee dismissed from his or her primary place of work does not deprive the employee of the right to receive average monthly earnings for the period of job placement.
In its Ruling, the Constitutional Court of the Russian Federation held that until the relevant amendments are made to the LC of the RF, the provisions of Articles 178 and 318 should be applied taking into account the clarifications set forth in the Ruling. Consequently, from November 25, 2024 (the date on which the Ruling entered into force), part-time employees are recognized as having the right to receive all payments provided for upon dismissal from their primary place of work due to the liquidation of the organization or redundancy or staff cuts at the organization, including compensation for average earnings for the period of job placement.
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Before amendments were made to the LC of the RF |
The absence of clear statutory regulation had resulted in two directly opposite approaches taken by the courts:
1. Employees who continue to work part-time after dismissal from their primary place of work are considered employed and, therefore, cannot claim severance pay.
2. The fact of having a part-time job cannot be considered as grounds for depriving an employee of the guarantees provided by law upon dismissal from his or her primary place of work.
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After amendments to the LC of the RF |
Article 178 of the LC of the RF was supplemented by Part 4, which establishes the right of part-time employees to receive guarantees upon dismissal in the same scope as those guaranteed to employees at their primary place of work:
— severance pay in the amount of the average monthly earnings; — average monthly earnings for the second month from the day of dismissal if a period of job placement exceeds one month (or part of the average monthly earnings for the second month in proportion to a period of job placement falling on this month); — average monthly earnings for the third month from the day of dismissal by decision of a public employment service agency, if the employee applied to this agency within fourteen working days from the day of dismissal and was not employed within two months from the day of dismissal (or part of the average monthly earnings for the third month in proportion to a period of job placement falling on this month). |
The legislative consolidation of additional guarantees provided to part-time employees upon dismissal from their primary place of work eliminates ambiguous interpretation of the provisions of the LC of the RF and reduces the risk of potential litigation concerning the entitlement of dismissed employees to severance pay for a period of up to three months, which previously existed in the absence of clear statutory regulation. However, the expansion of the category of employees entitled to an additional monetary guarantee in the form of average monthly earnings for the period of job placement increases the financial burden on employers, since in carrying out measures related to the liquidation of the organization or redundancy or staff cuts at the organization, employers are now required to take into account additional expenses for payments to part-time employees.
Recommendations for employers:
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Update local regulatory acts and personnel documentation in accordance with the requirements of labor legislation;
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Review the company's budget expenses related to payments in cases of liquidation of the organization or redundancy or staff cuts at the organization;
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Develop and implement internal control procedures to verify the grounds for payment of severance pay and average monthly earnings for the period of job placement (part-time employee status) and the correct calculation of such payments;
- Conduct an audit of previously implemented redundancy measures in order to identify cases that may potentially fall under the new requirements for granting additional monetary guarantees, and, if necessary, resolve them in an out-of-court manner.