In this article we are answering two frequently asked questions among our clients: I. How to dismiss an employee in Russia? What are the methods of dismissal? II. What method of dismissal is the most effective, least risky, and best avoids conflicts to the maximum extent possible, both within the Company and with judicial bodies; how is it possible to dismiss an employee in the shortest period of time?

1. ACCOUNTOR
Sadovnicheskaya nab. 79 Moscow Stockholm
115035 Moscow, Russia St. Petersburg Oslo
+7 495 788 00 05 Kyiv Copenhagen
accountor.ru Helsinki Utrecht
info@accountor.ru
How to dismiss an employee in Russia?
In this article we are answering two frequently asked questions among our clients:
I. How to dismiss an employee in Russia? What are the methods of dismissal?
II. What method of dismissal is the most effective, least risky, and best avoids conflicts
to the maximum extent possible, both within the Company and with judicial bodies;
how is it possible to dismiss an employee in the shortest period of time?
For these cases we would like to suggest the following answers proceeding from the
current Labor laws:
I. How to dismiss an employee who has worked for the Company for many years
and has had no official deficiency reports or complaints from the Management
concerning his/her work? What are the methods of dismissal?
According to the Labor code of the Russian Federation, there are a number of
alternatives to terminate the employment contract, especially at the employer’s
initiative; following on from the information obtained in our research, the following
variants possible:

2. ACCOUNTOR
Sadovnicheskaya nab. 79 Moscow Stockholm
115035 Moscow, Russia St. Petersburg Oslo
+7 495 788 00 05 Kyiv Copenhagen
accountor.ru Helsinki Utrecht
info@accountor.ru
1. Reduction in the number of employees or staff size
(Clause 2 of Part 1 of Article 81of the Labor code of the
Russian Federation):
1.1. The employer shall:
А. Issue an administrative order on the planned reduction in the number of employees
in connection with cutting financial costs, specifying which of the employees in equal
positions should be dismissed in connection with the reduction of the number of
employees.
In this case it is necessary to take into consideration the primary factors for keeping
the employee.
These include:
 First and foremost employees with a higher proficiency and those whose dismissal
is prohibited.
 Among those who have an equal labor performance and proficiency, the following
persons shall have preference for keeping the job: married persons having two or
more dependents (unemployable members of the family fully supported by the
employee or receiving assistance from the latter which is their constant and basic
source of the means of sustenance); persons in whose family there are no other
employees with independent earnings; employees having suffered a labor injury or
been affected by an occupational illness (Part 2 of Article 179 of the Labor code of
the Russian Federation).
The decision to allow the employees to keep their jobs is taken by the employer's
Commission, established to determine which of the employees should be dismissed
and why.
B. Issue an order on the approval of a new list of staff without the position of the
employee subject to dismissal.
С. Give the employee a written notice of dismissal no later than two months in advance.
This should be proved by the handwritten signature of the employee in the notice of
the employment contract termination.

3. ACCOUNTOR
Sadovnicheskaya nab. 79 Moscow Stockholm
115035 Moscow, Russia St. Petersburg Oslo
+7 495 788 00 05 Kyiv Copenhagen
accountor.ru Helsinki Utrecht
info@accountor.ru
The employer's failure to do so entails the reinstatement of the employee in his/her
job.
With the written consent of the employee the employer has the right to dismiss him/her
before the expiry of the term of notice paying compensation pro rata for the remaining
term of the said notice (Part 3 of Article 180 of the Labor code of the Russian
Federation). If the employee does not give his/her written consent, dismissal before
the notice period expires will be illegal;
D. Notify the employment service body of the personnel reduction no less than 2
months prior to dismissal.
E. Offer the employee in writing another available job (vacant post or position according
to his/her qualifications or a lower paid job) taking into account his/her state of health.
All vacancies meeting the indicated requirements which the employer has in the given
locality, and also vacancies in other localities if envisaged by the employment contract,
shall be offered to the employee. The employer is obliged to offer the employee another
job (position) available during the whole period of measures taken to reduce the
personnel number from the moment of giving notice on the forthcoming dismissal until
the moment of termination of the employment contract, if the employer has vacant
positions on their staff. If there are no vacant positions, the employer informs the
employee of the absence of the possibility to offer another job as there are no
vacancies left on the staff.
In reply to the employer's written vacancy offer the employee shall give his/her written
consent or disagreement with the new position.
The employer's failure to perform this obligation entails reinstatement of the employee
in his/her job.
1.2. Payments to the employee at the termination of the employment contract in
connection with a reduction in the number of employees or staff size
 Severance pay at the rate of an average monthly salary of the employee is to be
given on the day of his/her dismissal
 Monthly average salary for the period of the employee searching for a job, which is
payable two months after the dismissal. The employee shall write an application for
the payment and submit the work record card original showing that he/she has not
been gainfully employed from the moment of the dismissal.

4. ACCOUNTOR
Sadovnicheskaya nab. 79 Moscow Stockholm
115035 Moscow, Russia St. Petersburg Oslo
+7 495 788 00 05 Kyiv Copenhagen
accountor.ru Helsinki Utrecht
info@accountor.ru
 The average monthly salary for the third month shall be paid by the employer with
an expiry date of three months after the dismissal if the employee turns to the
employment body within a fortnight after the dismissal and is not placed in a new
job by the said body.
Please note:
Following on from the above, when reducing the number of personnel or staff, the
employer on average pays the employee 5 average monthly salaries: two months’
salary (wages) from the moment of reception of the notice on the forthcoming
reduction, and three average monthly salaries as guaranteed payments in connection
with the personnel reduction.
Besides this, the staff reduction procedure is a lengthy process requiring no less than
2 months, and also means much work for the employer connected with due execution
of paper documents.
If the employer breaches procedure, the Court will reinstate the employee in his/her
job obliging the employer to pay compensation for the forced absenteeism.
In addition, it’s also necessary to consider situations where there is one employee who
has been employed for a longer period than another, both working in similar positions.
In such circumstances it will be necessary to give reasons to prove why this particular
employee and not the other is subject to dismissal.
If the Court establishes the presence of a bias in keeping the other person employed,
the dismissed employee will also be reinstated in his/her job and the employer will be
obliged to pay compensation for the employee's forced absenteeism.
In cases of personnel reduction, if procedure is not strictly followed then the risks of
having the employee reinstated in his/her job are very great.
Besides, one should take into consideration that there is a certain circle of people
protected from dismissals in accordance with the law.

5. ACCOUNTOR
Sadovnicheskaya nab. 79 Moscow Stockholm
115035 Moscow, Russia St. Petersburg Oslo
+7 495 788 00 05 Kyiv Copenhagen
accountor.ru Helsinki Utrecht
info@accountor.ru
2. Repeated failure of the employee to perform his/her
labor duties without a valid excuse, if the employee was
subjected to disciplinary sanctions (Clause 5 of Part 1
of Article 81 of the Labor code of the Russian
Federation)
For a minor offence, when an employee does not perform well, if at all, the job
functions assigned to him/her through his/her own fault, the employer has the right to
apply the following disciplinary sanctions:
1)Warning; as a rule applied for the first time, when there have been no other official
sanctions resorted to;
2)Reprimand; as a rule after a prior warning;
3)Dismissal based on the relevant grounds – if the employee has had more than one
disciplinary sanction applied.
Note: When applying disciplinary sanctions one should take into account the gravity of
the misdeed and the circumstances under which it was committed.
Actions of the employer when applying the disciplinary sanction:
1)Before applying the disciplinary sanction the employer should request a written
explanation from the employee. (Order from the employer that the employee should
submit a written explanation).
2)Written explanation from the employee concerning the cause of his/her misdeed. If
no explanation is given by the employee within two working days, a corresponding
act shall be drawn.
The employee not giving an explanation does not prevent the application of disciplinary
sanctions.
Note: Disciplinary sanctions can be applied no later than one month from the date the
offence is detected and no later than 6 months from the date of its occurrence,
excluding periods of sick leave or holiday leave of the employee.

6. ACCOUNTOR
Sadovnicheskaya nab. 79 Moscow Stockholm
115035 Moscow, Russia St. Petersburg Oslo
+7 495 788 00 05 Kyiv Copenhagen
accountor.ru Helsinki Utrecht
info@accountor.ru
3) The Order of the employer on disciplinary sanctions is announced to the employee
in exchange for a signed receipt within three working days from the date of its issue,
excluding periods of the employee's absence from the place of work.
If the employee does not agree to receive the order (instruction) in exchange for a
signed receipt, a corresponding act shall be drawn.
Please note:
On the basis of the above one may conclude that the procedure for dismissing an
employee following a disciplinary sanction requires the employer to strictly observe the
time limits and order of imposing the disciplinary sanctions. It is also important to take
into account the gravity of the misdeeds of the employee, before taking the decision
on the employment contract termination for the said reason.
In addition, an entry will be made in the work record card of the employee stating that
he/she is dismissed in connection with repeated non-performance of his/her job
duties. (A list of the relevant functions should be clearly stated in his/her duty
regulations).
At such a dismissal the employee, as a rule, goes to the court to appeal against the
acts of the employer and to be reinstated in his job, as such a dismissal entry in the
work record card will make it very difficult for the employee to find another job. The
court considers all circumstances of the case, and if any breach in applying disciplinary
sanctions or abuse of the employer’s powers in office are detected, then the court will
reinstate the employee in his/her job obliging the employer to pay compensation for
the induced absenteeism, as well as for the moral harm suffered.

7. ACCOUNTOR
Sadovnicheskaya nab. 79 Moscow Stockholm
115035 Moscow, Russia St. Petersburg Oslo
+7 495 788 00 05 Kyiv Copenhagen
accountor.ru Helsinki Utrecht
info@accountor.ru
3. Employment contract termination by an agreement
of the parties (Clause 1 of Part 1 of Article 77 of the
Labor code of the Russian Federation)
The employment contract can be terminated at any moment by an agreement of
parties. Termination of the contract on this basis can be initiated either by the
employee, or the employer. The arrangement of the parties is registered in the form of
a separate document, an agreement on the employment contract termination.
As a rule, when both parties agree to terminate the employment contract, the said
parties agree on the compensation payment to be given by the employer to the
employee. For an amount which does not exceed three times an average monthly
salary, it shall not be subject to Personal income tax; any amount exceeding three
months’ worth of salary shall be subject to Personal income tax withheld by the
employer.
The compensation payment effected in connection with the termination of the
employment contract can be established as any amount, its exact size not specified in
the law. However, according to the current practice such payment usually depends on
the length of service of the employee in the Company, his/her achievements,
experience, etc, and if the employee has worked for the Company for 10 years and
more, he/she can ask for 3 to 5 average monthly salaries. As a rule, the maximum
sum of such a payment is 5 average monthly salaries, corresponding to the average
amounts due and payable when reducing the number of staff of the Company.
However, the employer can establish the payment amounts at their own discretion and
as agreed with the employee.
It should be noted that it would be very difficult for the employee to challenge the
dismissal when there is an agreement of parties, as it is not only on the initiative of the
employer, but also on the initiative of the employee: a mutual agreement of the two
parties to the employment contract. The employee also receives monetary
compensation for the dismissal. The court in this case will in most instances protect
the employer.

8. ACCOUNTOR
Sadovnicheskaya nab. 79 Moscow Stockholm
115035 Moscow, Russia St. Petersburg Oslo
+7 495 788 00 05 Kyiv Copenhagen
accountor.ru Helsinki Utrecht
info@accountor.ru
II. What method of dismissal is the most effective, least risky, and best avoids
conflicts to the maximum extent possible, both within the Company and in judicial
bodies; how is it possible to dismiss the employee within the shortest period of
time?
Proceeding from the above, the most effective, fast and safe method of the employee's
dismissal is the dismissal agreed to by both parties.
Accountor is a preferred legal advisory services partner for international companies
operating in Russia. We have been on the Russian market since 1992 and employ
more than 200 professionals in Moscow and St. Petersburg.
If you have any questions or require any explanation, please do not hesitate to
contact us:
Samuli Pesu
Deputy CEO
Mobile: +7 926 710 43 61 / +358 50
553 20 34
Office: +7 495 788 00 05
Email: Samuli.Pesu@accountor.ru
Daniil Berlizov
Senior Business Development
Manager
Mobile: +7 916 539 68 66
Office:+7 495 788 00 05
Email: Daniil.Berlizov@accountor.ru
Pertti Särösalo
Sales Director Nordics
Mobile: +358 40 590 7603
E-mail: Pertti.Sarosalo@accountor.ru