In Russia, the relationship between an employer and an employee is primarily governed by two main types of agreements: Labor Contracts and Civil Law Contracts. Each offers distinct regulations and protections.

Labor Contracts

Labor Contracts are the standard form of employment agreement in Russia, outlined in the Russian Labor Code (RLC). These contracts establish a full employer-employee relationship, granting employees a comprehensive set of rights and protections under Russian labor law.

Key characteristics of Labor Contracts include:

• Written Form: RLC mandates Labor Contracts to be concluded in writing.
• Open-Ended vs. Fixed-Term: While open-ended contracts are the norm, fixed-term contracts can be established for specific projects or positions.
• Notice Periods: Termination requires adherence to specific notice periods depending on the employee's tenure and circumstances.
• Employee Benefits and Protections: Labor Contracts provide employees with a range of benefits and social protections, including minimum wage, standard working hours, overtime regulations, paid leave, and health and safety standards.

Civil Law Contracts

Civil Law Contracts, governed by the Russian Civil Code (RCC), offer an alternative form of agreement for engaging individuals for specific services. These contracts differ from Labor Contracts in several aspects:

• Focus on Deliverables: Civil Law Contracts center on the completion of a specific task or project, with less emphasis on ongoing employment.
• Fewer Employee Protections: Individuals engaged under Civil Law Contracts receive fewer social and employment benefits compared to Labor Contracts.
• Tax Implications: The tax implications for both parties can differ between these contract types.

Misclassifying an employee under a Civil Law Contract to avoid labor law obligations is illegal in Russia.

Special Types of Labor Contracts

The RLC also acknowledges various specializations within Labor Contracts to cater to specific work arrangements:

• Remote Work Contracts: These contracts acknowledge the employee's right to work remotely.
• Part-Time Contracts: Agreements can be established for part-time work with adjustments to working hours and benefits.
• Fixed-Term Employment for Seasonal Work: For seasonal positions, fixed-term contracts with specific durations are permissible.

Employment agreements in Russia are legally binding documents that establish the rights and obligations of both employers and employees. The Russian Labour Code (RLC) mandates that all employment contracts must be in writing. To ensure a comprehensive and legally sound agreement, several essential clauses should be included.

Core Employment Details

• Parties to the Agreement: Clearly identify the employer and the employee.
• Job Title and Description: Specify the employee's job title and provide a brief description of their duties and responsibilities.
• Start Date and Term: Outline the commencement date of employment and the duration of the contract.

Compensation and Benefits

• Salary and Payment Schedule: State the agreed-upon salary amount, currency, and payment frequency.
• Benefits: Enumerate any benefits offered, such as paid time off, health insurance, or social security contributions.
• Overtime Pay: Outline the terms and rates of compensation for overtime work, night shifts, and work on weekends or holidays.

Work Schedule and Leave

• Working Hours: Define the standard working hours per day, week, and any potential flexible work arrangements.
• Vacation and Sick Leave: Specify the entitlement to paid annual vacation leave and sick leave according to Russian law.

Termination of Employment

• Notice Period: Outline the required notice period for termination by either party, adhering to the minimums set by law.
• Grounds for Termination: Enumerate the grounds for termination by the employer as stipulated by the RLC.
• Severance Pay: Specify any severance pay obligations based on the reason for termination.

Additional Clauses

• Intellectual Property: Address ownership rights over any intellectual property created by the employee during employment.
• Dispute Resolution: Outline the process for resolving any disagreements arising from the employment contract.

Probationary periods are a common feature in Russian employment contracts, allowing both employers and employees to assess suitability for the role.

Duration of Probation

The maximum probationary period in Russia is generally three months, as outlined in Article 70 of the Labour Code of the Russian Federation. Exceptions exist for specific high-level positions. The probationary period can be extended to six months for roles like Chief Executive Officers (CEOs) and their deputies, chief accountants and their deputies, or heads of branches or separate divisions. For fixed-term contracts lasting between 2 and 6 months, the probationary period is capped at two weeks as per Article 289 of the Labour Code. Notably, probationary periods are not applicable to employment contracts with a duration less than 2 months.

Legal Requirements

The inclusion of a probationary period requires it to be explicitly mentioned in both the employment contract and the employee's hiring order. Certain categories of employees are legally protected from probationary periods. These include pregnant women, women with young children, employees under 18, and recent graduates seeking their first job within a year of graduation.

Termination During Probation

If, during the probationary period, the employer finds the employee unsuitable, they can terminate the employment with just three days' written notice and without severance pay. However, the employer is obligated to provide a reason for termination. Employees also have the right to terminate the contract during the probationary period with a two-week written notice, as stipulated in the Labour Code.

Confidentiality clauses are a common feature in Russian employment agreements. They are designed to protect an employer's confidential information, as defined by Article 139 of the Civil Code of the Russian Federation. This information, which can include commercial secrets, is characterized by its actual or potential commercial value, its unknown status to third parties, its inaccessibility on legal grounds, and its subject to a confidentiality regime implemented by the employer.

Employees who are bound by a confidentiality clause are required to protect this information both during and after their employment. This typically involves not disclosing the confidential information to unauthorized individuals, using the information solely for job-related purposes, and taking reasonable steps to prevent unauthorized access to the information.

Non-Compete Clauses

In contrast to confidentiality clauses, non-compete clauses are generally unenforceable in Russia. This is due to Article 37 of the Russian Constitution, which guarantees freedom of labor, and Article 64 of the Labor Code, which prohibits restrictions on an employee's right to work after termination of employment.

This means that an employee cannot be prevented from taking a job with a competitor after leaving their current position. However, there are a few limited exceptions. For example, senior executives may be subject to a competition restriction, but this requires a separate agreement with specific limitations. These limitations must be reasonable in scope and duration, and the employer must provide compensation to the employee.

Alternative Approaches

Despite the unenforceability of non-compete clauses, employers can still use other strategies to protect their interests. For instance, they can implement strong confidentiality agreements to help safeguard sensitive information. They can also restrict certain activities during employment, such as soliciting clients or employees for a competitor. However, these restrictions cannot extend beyond the employment period. Additionally, employers can enter into separate non-disclosure agreements with employees for specific projects or information.