Liability of the employee
An employee who breaches obligations established in his/her employment agreement may be subject to disciplinary sanctions and/or bear material liability.
The Labour Code strictly regulates the disciplinary procedure, and non-compliance may result in the employee successfully challenging the disciplinary sanction in court.
An employee’s material liability is generally restricted to compensation for the direct damage caused to the employer’s property at the employee’s fault or negligence. This liability is limited to an amount equivalent to the employee’s monthly average salary.
However, the Labour Code sets out some exceptions to the limitation of material liability rule. It provides that an employer may, under certain conditions, impose full material liability where an employee:
- fails to protect valuable items entrusted to him/her, as evidenced by documents signed by the employee;
- intentionally damages property;
- causes damage when in a state of alcoholic, drug or other intoxication;
- causes damage as a result of criminal actions for which he/she has been sentenced by a court;
- causes damage as a result of an administrative offence as determined by the relevant state body;
- divulges confidential information;
- causes damage outside of his/her work duties; and/or
- has entered into an individual or a collective agreement on full material liability with the employer.
Full material liability extends to all damage incurred by the employer as a result of the fault of the employee.
Also, in the employment agreement, an employer may provide for full material liability for certain categories of employees (e.g. chief accountant, deputy general director, etc.). The general director of a legal entity is always subject to full material liability regardless of whether his/her employment agreement includes such a provision.
If the employer wishes to be compensated for the damage it suffered, it must follow a specific procedure and request from the employee a written explanation of the cause of the damage. Following this, the employer must specify the amount and cause of any damage inflicted within one month of the alleged damage having occurred. If the employer does not exercise its right within this time period, compensation may only be recovered with the voluntary consent of the employee or through legal proceedings.
Liability of the employer
The limitation period within which an administrative claim can be brought against an employer for failure to comply with labour laws is one year from the date that the violation was committed or, with respect to ongoing violations, from the date that the violation was discovered by the authorities. The maximum administrative fine that may be imposed on an employer’s official for non-compliance with labour law requirements has been increased to RUB 30,000 (EUR 429). Furthermore, in the event of a recurring offence, the official may be disqualified for a term of up to three years. The maximum administrative sanctions that may be imposed on legal entities include an administrative fine of RUB 200,000 (EUR 2,860) and/or administrative suspension of activities up to 90 calendar days.
Notably, in accordance with the current law-enforcement and court practice, the penalty for the same offence may be imposed simultaneously on both the company and the general director or other authorised officer of the company. Moreover, if the same offence is simultaneously committed against a number of employees, the total amount of administrative fine imposed on the official or the entity for such offences may in some cases be calculated taking into account the total number of employees affected by the relevant offence.
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