Decision of the Constitutional Court of the Russian Federation changes the current law enforcement practice regarding the possibility of concluding fixed-term employment contracts

Ruling of the Constitutional Сourt of the Russian Federation changes the current implementation of the law in practice. The conclusion of an employment contract for a certain period in connection with the performance of work in pursuance of the civil law contract of the employer is in question.

Previously, the courts allowed the possibility of concluding a fixed-term employment contract with an employee to carry out work on a specific project related to the execution of a civil law contract by the employer. This possibility is provided for in paragraph eight of the first part of Article 59 of the Labor Code of the Russian Federation (hereinafter – the “Labor Code of the Russian Federation”).The Constitutional Court of the Russian Federation judged that this statute of the Labor Code of the Russian Federation:

1.     does not imply the conclusion of a fixed-term employment contract (including the multiple conclusion of an employment contract for the same position) in order to ensure the fulfillment of the obligations of the employer under civil contracts for the provision of services related to his statutory activities

2.     does not allow determining the urgent nature of labor relations by the exclusively limited duration of the civil law contracts of the employer

Thus, taking into consideration the position of the Constitutional Court of the Russian Federation, the considered basis for the urgency of the employment contract cannot be applied by the employer if:

• an organization acts as an employer, whose statutory activity involves the provision of any services to third parties
• employees are hired for a specified period to fulfill the obligations of the employer to customers of services
• the employee’s labor function is determined by the nature of the related services

The Court notes that the fulfillment of the obligation by the employer to provide the employee with work requires, inter alia, the timely conclusion of paid services contracts.

The expiration of a separate civil contract, as a rule, does not indicate the termination by the employer of its statutory activities. It also does not confirm the completion of work by its employees, ensuring the fulfillment of the obligations of the employer under a civil contract.

In this case, if it is impossible to provide the employee with work and a forced suspension of work occurs, the employer must pay the employee idle time in accordance with the law.

This Ruling of the Constitutional Court of the Russian Federation significantly changes the course of law enforcement practice. In this regard, we recommend revising the company’s approach to hiring employees for a certain period of time to implement projects under civil law contracts. Moreover, it is also recommended to study existing employment contracts with the view of making the necessary adjustments or additions to them.