Country Focus

Russian Employment Law, By the Book

In Russia, it’s important for HR to do things by the book. The book, in this case, is the work-record book, a document that tracks each worker’s employment history throughout his/her career. Once someone has worked for a company for more than five days, the employer must start the book and record positions held, promotions, work achievements and finally, the reason for dismissal. The book is given to the employee when he/she do longer workers for that company.

Russia may be bureaucratic, but it is easing into the 21st-century business practices. Last year a draft law was designed to adopt the use of electronic employment record books, starting Jan. 1, 2021.

According to Article 7 of the Constitution of the Russian Federation, the Russian Federation “shall protect the work and health of its people, establish a guaranteed minimum wage, provide state support for family, motherhood, fatherhood and childhood, and also for the disabled and for elderly citizens, develop a system of social services and establish government pensions, benefits and other social security guarantees.”

The central piece of employment law legislation that HR professionals must be concerned with is the Labor Code of the Russian Federation, which went into effect in 2002. It applies to all types of companies, national or foreign, and also to all employees regardless of their citizenship. The history of labor codes in Russia goes back to the codes of 1918, 1922 and 1971. 

Employment legislation “tends to fall quite heavily in favor of the employee, with a number of minimum guarantees and protections for employees,” Jo Faragher, wrote in the article “Employment law in Russia: six things you need to know,” which appeared in Personnel Today

Faragher noted that employees can only be dismissed on certain grounds, which are specified in the code. The main reasons that employment contracts may be terminated are: the liquidation of the company; redundancy or workforce reduction; the employee’s failure to meet the requirements of their position; violations of work duties; or the production of fake documents. 

Any employee who wants to make a claim that the dismissal was unfair has only one month to make the claim. 

The Labor Code prohibits discrimination on the basis of sex, race, color, nationality and political views. In addition, “employers must not discriminate against staff on the basis of their property status – for example, whether they own property or not – social status or family status,” she wrote.

Women in the workplace have certain protections that their male counterparts do not have. It is illegal to refuse to hire an employee on the basis that she is pregnant or has children. Also, according to Faragher, “pregnant women cannot be asked to work overtime, asked to work on their days off or be sent on business trips. Female workers are also banned or restricted from working in arduous, harmful or dangerous conditions, or in jobs involving manual lifting of heavy objects.”

Trade Union Power
After the collapse of the Union of Soviet Socialist Republics (USSR) in 1991 a new organization emerged as the successor of the Soviet trade union – the Federation of Independent Trade Unions (FNPR). Now it is the largest trade union organization in Russia, with a membership of 21 million people.

Collective disputes are strictly regulated by the Labor Code and there are a number of mandatory conciliation procedures – for example, around strikes, according to Faragher. “A conciliation commission will first attempt to resolve any workplace disputes, and if this is not achieved in three days the case will go to a labor arbitration tribunal. There is a strong obligation to inform union representatives of any major changes to the company’s ownership or legal form three months in advance of changes; in cases of collective redundancy, failure to inform the trade union could make the terminations invalid.”

Close and Complicated 
Despite the geographical proximity, trade relations between Russia and Japan has been historically on the low side, with political dynamics affecting economic cooperation between the two countries. 

Japanese companies have also cited the following as the top three major challenges of doing business in Russia, according to a report by the Japan Business Federation (Keidanren): inefficient, “highly complicated” paperwork and required processes; lack of transparency and clarity in import and export rules; and difficulty understanding the local laws, in huge part due to lack of English translations of civil and tax codes.

In some markets though, a solid, sustainable relationship can be found. For instance, Japan is one of Russia’s top 3 suppliers of rubber, the Journal of Comparative Economic Studies reported. According to its paper Japan's Trade and FDI Intensities with Russia: “Japan supplies the Russian market with high-value added products, primarily vehicles, machinery, equipment, rubber, and miscellaneous manufactured articles,” adding that Russia is “highly dependent on the import of Japanese vehicles.”

Since 2016, Prime Minister Shinzo Abe has been committed to an approach that aims to spark deeper political and economic engagement between the two countries. He has launched a series of initiatives to encourage more Japanese companies to invest in Russia, the most recent of which is the Arctic LNG 2 investment deal signed in September 2019 between Mitsui & Co with Japan Oil, Gas, and Metals National Corporation (JOGMEC) and Novatek Russia. It may be worthwhile for Japanese companies interested in doing business in Russia to identify which markets and product groups showed the strongest partnerships between the two countries, and study how to leverage Prime Minister Abe’s continued efforts for cooperation.


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