The current market requires more flexibility regarding the workplace since many professionals are able to work from a location other than their employers’ offices, i.e. home, local café, etc.  Remote employment offers a number of advantages, including cost savings for both employer and employee.  Moreover, it also gives employers access to professionals whom they might otherwise not easily employ (due to mobility problems or living outside the commuting area).

What does working remotely mean?

To work remotely, as defined in the Labour Code, means to work outside the employer’s place of operation (meaning any place under the employer’s control), to use networks (eg the internet) to interact with the employer, and to enter into a special remote employment agreement (the “REA“).

An REA can be concluded through electronic document exchange.  The law requires a protected qualifying electronic signature to be used in all document exchanges between the employer and the remote employee, which will cost about US$200 for the employer and US$100 for the employee.  The law covers specific instances when a document is to be provided in hard copy, for example, the employer is obliged to send an original hard copy of the executed REA to the employee, and the employee is to provide his employment record book (a document showing individual’s employment history, which is an obligatory document for Russian employees) to the employer.  Moreover, each party may also require that the other party provides any document in hard copy.

By way of exception, it is allowed to not record information regarding the employee’s remote job in his employment record book if both parties so agree.  In this case, his employment history will be confirmed by the employee’s counterpart of the REA.

An employer may indicate in the REA that the employee is to use specific hardware or software while carrying out his duties.  As for the employer’s obligations to ensure workplace safety, they are very limited and include, amongst other things, an obligation to familiarise remote employees with the workplace safety requirements relating to the hardware and software recommended or provided to them by the employer.

The remote employees may set their work and rest schedule themselves, however granting vacations is still subject to Labour Code procedures.

The REA may contain additional grounds for the employee’s dismissal in addition to the list provided by the Labour Code.  Having these grounds in employment agreements with the employees (except in those with the CEO) is not generally allowed in Russia.

Effects on tax regime

Generally, Russian companies are obliged to register their separate subdivisions with the tax authorities if they have employees with fixed work places at locations different from their headquarters.  As the changes to the Labour Code contemplate that no such fixed work places should exist for the remote employees, we believe that the employers of such employees would not be obliged to register separate subdivisions as generally required for normal employees for those remote employees with the tax authorities (irrespective of the place where remote employees actually work).

Formal reading of the tax legislation brings us to the conclusion that the same logic should apply in respect of foreign companies having remote employees in Russia.  This means that, formally, foreign companies should not register with the Russian tax authorities as a result of employing Russia-based remote employees. However, without registering with the tax authorities, the relevant foreign company would technically be unable to pay Russian payroll taxes which it is obliged to pay as a result of employing personnel in Russia.  Consequently, and depending on the circumstances in question, foreign companies which intentionally employ remote personnel in order to avoid registration with the tax authorities (and payroll taxes) may be accused of tax evasion.  While no guidance from the tax authorities is available on the matter as of yet, we expect it to be issued later this year.

To sum up

Remote employment, often referred to in Russia as teleworking, has become a common practice in many developed jurisdictions and there has been much debate about its advantages.  By putting remote working as an option of conducting employment activities into the Labour Code, the Russian lawmaker keeps apace with global trends and satisfies the demands of the Russian labour market.

This article has been writen by Marat Agabalyan, Daniil Ruderman, Sergei Eremin and Ilsur Mavlekeev.

Asia-Pacific Guide

The guide includes a detailed summary of the ‘need-to-know’ elements of employment law in 18 jurisdictions across the Asia-Pacific region, covering Australia, Cambodia, Hong Kong SAR, India, Indonesia, Japan, Korea, Laos, Macau, Malaysia, Mongolia, Myanmar, People’s Republic of China, The Philippines, Singapore, Taiwan, Thailand and Vietnam.

The guide captures the latest employment law developments across the Asia-Pacific region.

Examples of key developments in this edition of the guide include:

• significant amendments to Vietnam’s Labour Code, including changes to laws governing probationary periods of employees, termination and retrenchment of employment, technology or business secrets, overtime entitlements, and outsourcing arrangements
• the introduction of privacy/data protection legislation in the Philippines, Singapore and Taiwan
• amendments to the PRC’s Labour Contract Law which will have significant impacts on the PRC’s labour dispatch rules including the introduction of an ‘equal pay for equal work’ principle, limitations on the range of positions for which dispatch workers can be engaged, and an increase to the registered capital requirements for labour dispatch service providers
• new legislation on age discrimination and aged employment promotion enacted in Korea and raised retirement ages in various jurisdictions including Japan and Malaysia, and
  paternity leave entitlements introduced or extended in various jurisdictions including Hong Kong SAR, Korea and Singapore.

For more information please contact Magdalena Flynn.

Key provisions of the new law for employers include: greater certainty in relation to the timing of collective redundancies but also stricter requirements to actively seek out a buyer in the event of the proposed closure of a site.

The new law also delivers in particular new provisions in relation to employee representation at board level in larger companies/groups and increased obligations in relation to the subjects for information and consultation of works councils.

The law has not yet been officially published – the text has been referred to the Constitutional Court (on 15 May 2013) and a decision of the Constitutional Court is pending.

Our briefing  sets out the principal provisons of the new law.

For more information, or to discuss how the changes may affect you business, please contact Sophie Brézin or Emma Röhsler in our Paris office.

With the expansion of global companies into Asian economies, the employment laws in Asia-Pacific have been evolving rapidly to address social and economic issues. Unlike the West, where changes happen gradually over decades, Asia is seeing enormous change taking place over much shorter time-frames. The challenge for companies and lawyers is to ensure compliance with changes in each country and each system.

Our speakers, Gareth Thomas, partner in our Hong Kong office, and Tara Grossman, returning to the UK from a two-year secondment in Asia, will give a brief overview of the recent significant developments across the region, including:

• review of recent interesting cases,
• new approach to discrimination and harassment,
• tightening of privacy and data protection rules,
• changes to employment and pensions rights,
• outsourcing and workers dispatch rules, and
• increased importance of industrial relations.

Gareth and Tara will also discuss current trends in the employment market and will foreshadow the key upcoming changes.

The event will be of interest to employment lawyers, HR heads, and in-house generalists, with responsibilities for dealing with employment law and HR issues.

Date: 11 June 2013
Time: 9.00 – 10 am (breakfast served from 8.30 am)
Venue: Exchange House, Primrose Street, London, EC2A 2EG

About speakers

Gareth Thomas is a litigator with extensive experience in advising international companies on employment litigation and discrimination claims. Gareth advises financial institutions and corporates in various sectors on executive severances, board reorganisations, workforce restructurings and redundancies. Gareth has been working in Hong Kong for 15 years.

Tara Grossman is an English and Hong Kong dual qualified lawyer. She has spent the last two years advising international clients on all aspects of employment law in Asia, and, according to Chambers Asia-Pacific, “she is particularly rated for her expertise in contentious issues”.

Gareth and Tara contribute a monthly column on employment law issues to South China Morning Post.

About the Guide

Our Asia-Pacific Employment Law Guide is comprehensive collection of country-specific Q&A on employment law and practice in 18 jurisdictions, covering: Australia, Cambodia, Hong Kong SAR, India, Indonesia, Japan, Korea, Laos, Macau, Malaysia, Mongolia, Myanmar, People’s Republic of China, The Philippines, Singapore, Taiwan, Thailand and Vietnam. Copies of the Guide will be available to collect at our breakfast launch on 11 June.
Earlier this year events to promote our guide have been held in Melbourne, Sydney, Singapore and Hong Kong.

About our practice

Our Asia-Pacific employment practice is a part of our Global Employment, Pensions and Incentives team of over 150 lawyers in over 15 offices worldwide. 

Our Asia-Pacific team supports regional HR managers and in-house counsel, assisting clients on national and multi-jurisdictional and cross-border employment law issues that arise in the region, and provide clients with access to a vast network of local employment law experts for any jurisdiction-specific employment law issues that may arise.

For more information about our Global Employment, Pensions and Incentives practice, and to register to attend, please contact Magdalena Flynn.

Below we highlight some features of Russian migration laws in the context of the present economic climate.

For the purposes of this article, a procedure applicable to employees from CIS countries is not covered.

General
While Russian and non-Russian personnel are to be treated equally from an employment law perspective, a company intending to use foreign personnel in Russia should brace itself for the Russian bureaucratic migration regime. In particular, Russian migration laws require both the company and the foreign employee to obtain special permits from the relevant migration authorities (representative offices and branches of foreign companies are also subject to this requirement). 

Under Russian migration laws, there are two procedures for the employment of foreign personnel:

• the standard procedure for employment of foreign personnel; and
• the simplified procedure for employment of a highly qualified specialist (an ‘HQS’).

Standard procedure

Russia’s migration policy is based on the principle that the employment of Russian citizens should be prioritised. For this reason, the number of foreign citizens who may be employed in Russia at any one time is limited by quotas. The standard procedure is rather time consuming and it can be roughly divided into the following key steps:

• Firstly, a company files an application for a determination as to the number of foreign employees it may employ, or quota, with a competent regional authority. Such application should be filed by 1 May each year for the purposes of determining the quota for the subsequent year. The quotas are finally approved by the Russian government and allocated among the regions.
• Secondly, the company informs the employment centre of job vacancies assigned for foreign employees. An application to employ a foreign employee may be rejected by the employment centre if it finds an adequately qualified Russian citizen available to perform the same job. 
• Thirdly, the company applies to the Federal Migration Service or its regional bodies for a permit to engage foreign employees (hiring permission). This document allows a company to employ a particular number of foreign employees and includes, among other things, information about particular jobs and regions where employment of foreign employees is allowed. It is valid for a period of one year and can be reissued upon the company’s application.
• Finally, a company should obtain an individual work permit for each employee. To obtain a work permit, a foreign citizen is required to undergo a medical examination and submit certain documents. An individual work permit is issued for one year.

In addition, each foreign employee must receive an employment visa which is granted for up to a period not exceeding the work permit term. The company must notify a number of state authorities of the engagement of a foreign employee. Foreign employees are required to register with Russian migration authorities within seven business days following their arrival in Russia. It should be noted that as a general rule, a foreign employee is not allowed to work outside a particular region. However, foreign employees can be sent on business trips to other regions for up to ten days per year or, if the employment agreement provides for work of an itinerant nature, up to 60 days per year.

This is only a high-level description of the standard procedure and it is worth noting that each of the key steps includes additional obstacles. In practice, the standard procedure generally takes three or four months depending on the region. State duty costs for the standard procedure amount to RUB 9,500 (approximately US$300).

Simplified procedure for an HQS

On 1 July 2010, the concept of a ‘Highly Qualified Specialist’ was introduced into Russian migration laws consistent with a trend towards simplifying the relatively document heavy and bureaucratic standard procedure.

To qualify for the HQS status, a person must be an experienced specialist with skills or achievements in a specific area (which is a more formal requirement), earning at least:

• for scientists or lecturers proposed to be employed by scientific institutions, state academies or higher education institutions and persons proposed to be employed by residents of certain types of special economic zones, RUB 1m (approximately US$32,300) per year;
• for persons proposed to be employed by residents of technology development special economic zones, RUB 700,000 (approximately US$22,600); and 
• for anyone else, RUB 2m (approximately US$64,600) per year.

The requirement as to the minimum yearly salary does not apply to people invited to work on the special Skolkovo project approved by the Russian government.

There is a simplified quota-free one-step application procedure for hiring HQSs (with some exceptions (specified below) depending on the nature of the company). Advantages enjoyed by HQSs can be summarised as follows:

• their employers are not required to obtain hiring permissions;
• invitations and work permits issued to an HQS’s family members will not count towards quotas that limit the issue of these documents;
• they enjoy an accelerated procedure for obtaining work permits (14 business days);
• the maximum term for a work permit and employment visa for them is three years (both documents may be extended when their term expires);
• their work permits allow them to work in multiple Russian regions;
• they and members of their families are required to register with Russian migration authorities only after expiration of 90 days following their arrival in Russia;
• they and their families can get a Permanent Residence Permit  (vid na zhitelstvo) without having to live in Russia for a year (a Permanent Residence Permit will instead be issued for the term of the HQS’s work permit);
• they benefit from a favourable tax rate of 13 per cent, compared to 30 per cent for other non-residents (however, it works only when an HQS earns more than RUB 2m salary per year under their current employment agreement); and
• generally, an HQS can be sent on business trips for up to 30 days per year. If the employment agreement provides for an itinerant nature of the work, the term of business trips is not limited at all.

To employ an HQS, an employer, whether a Russian company or an accredited branch of a foreign company (as opposed to representative offices of foreign companies which are not permitted to use this procedure), has to file an application with the Federal Migration Service or its regional bodies. Permission is usually granted automatically if all formal requirements are met. The list of grounds for refusal is very limited and not discretionary. State duty costs for the simplified procedure amount to RUB 2,500 (approximately US$80).

Liability

Failure to comply with the procedures for employment of foreign personnel may lead to the imposition of an administrative fine on the company in the amount of up to RUB 800,000 (approximately US$25,700). Violations include hiring foreigners without having hiring permission or an individual work permit and failing to notify competent authorities of the employment of a foreign employee.

Summary

To sum up, the Russian government is constantly taking steps to improve current Russian migration laws in recognition that this is a prerequisite for further development of the Russian economy. A good example of this is the simplified procedure for employment of an HQS which is relatively new and is an especially advantageous option for employers. However, despite this change, Russian migration laws still remain a challenge for both employers and foreign employees.

This article first appared in May 2013 issue of the IBA Immigration and Nationality Law Committee newsletter. 

The EAT upheld the strike out of a disability discrimination claim where there was no evidence that the managers making the relevant recruitment decision knew of the claimant’s disability. The hope that the managers might admit to knowledge under skilled cross-examination was not sufficient to allow the claim to proceed. Presumably a claimant would have to show that the chance of something probative turning up on cross-examination – or perhaps in disclosure – was realistic. (Patel v Lloyds Pharmacy)

Such victimisation often consists of an employer giving an unfairly negative reference or refusing to give a reference (when it is normal practice to do so) for an ex-employee because they made a discrimination claim.

The conflicting decisions derive from a drafting error in the Equality Act. The government did not intend to exclude protection from such conduct, but the EAT has reached conflicting conclusions as to whether the wording can be interpreted to provide it or, if not, whether words can be read in to comply with EU law. The issue will have to be resolved by the Court of Appeal, due to hear Rowstock later this year.

The ECJ has ruled that homophobic remarks about the recruitment of gay players, made by a shareholder in a football club in an interview to a journalist, shifted the burden of proof to the employer to show that a recruitment decision was not discriminatory.  This was because, although the shareholder had no power to make binding recruitment decisions, he was perceived by the media and public as playing a leading role in the club and the club had failed to distance itself from the remarks. (Asociatia ACCEPT v Consiliul National C-81/12)

The ECJ also confirmed that the origin of the disability is irrelevant – it can be caused by a temporary illness if the disability is sufficiently long-term. A reduction in working hours can be a reasonable adjustment if it enables the individual to remain in employment.

Finally, the Court considered that a national law allowing termination on reduced notice after 120 days’ absence in one year was potentially indirect discrimination. The ECJ ruled that it might be appropriate to adopt such a rule to achieve the Member State’s legitimate aim of giving employers the confidence to recruit and retain employees likely to have repeat absences – but this was for the national court to decide.

Directors’ service contracts often contain this type of early termination provision and the ruling serves as a reminder of the potential for indirect disability discrimination claims when operating such a clause; justification will be key and the ECJ view on potentially legitimate aims is therefore of interest. The same potential for indirect discrimination (unless justified) applies to absence control policies given that disabled workers have the additional risk of disability-related illness and therefore a greater risk of accumulating days of absence and reaching the absence control policy limit. (HK Danmark v Dansk, C-335 & 337/11)