COVID-19 in Kazakhstan: The Labor Code and Employers’ Actions During the State of Emergency

April 24, 2020

The Labor Code of the Republic of Kazakhstan, No. 414-V, dated 23 November 2015 (the “Labor Code”) provides employers with the right to take certain actions towards employees in connection with the state of emergency in the country that was declared in response to the coronavirus (COVID-19) pandemic.

Providing paid vacation to employees

Employees use their annual paid leave during a period of economic downturn.

  • Sending an employee on a paid vacation requires the employee's consent. In most cases, this option is the most preferable for employees, in comparison with other measures that employers may take, such as transfer to idle time.
  • If there is a business rationale, the employer may unilaterally change the vacation schedule, but this requires a notice to the employee two weeks before the start of the vacation.
  • Employees may also be sent on an unpaid vacation (only by the parties' agreement).

Transfer of employees to idle time

  • In the case of temporary suspension of work, including due to economic reasons, the employer has the right to transfer employees to idle time.
  • The procedure for introduction of idle time, as well as the terms of payment for idle time, are determined by employment agreement and collective agreement. Payment for idle time cannot be lower than KZT 42,500 (in the absence of fault of any party).
  • Ministry of Labor and Social Protection of the Population of Kazakhstan provided clarifications on this issue in a letter dated April 14, 2020 No. 01-1-4-04 / 246-И. The letter recommends that employers introduce idle time rather than forced annual leave or unpaid leave.

Grounds for termination of the employment agreement with the employee

  • Termination is possible by mutual agreement of the parties. It is important that such “mutual agreement” may be reached in advance, upon execution of the employment agreement (with payment of compensation, for example, in the amount of one monthly salary). Although technically termination will be by mutual agreement, in substance it will be by the initiative of the employer.
  • The employer may unilaterally terminate the employment agreement with the employee, for example, on one of the following grounds: (1) reduction in the number or staff size of employees; or (2) decrease in production that resulted in a downturn of the employer's economic condition; as well as subject to certain mandatory conditions (including actual closure of the structural division; the impossibility to transfer the employee to another job; a timely written notice to the employee).
  • In case of termination of the employment agreement at the initiative of the employer, there is a risk of the employee filing a claim for reinstatement. The courts, while considering such cases, check whether there has been an actual reduction in the number or staff size of employees, verify compliance with all procedures, and verify the actual decrease of production or downturn of the employer's economic condition.
  • Termination of the employment agreement with employees who are citizens of the Republic of Kazakhstan may lead to a decrease in the percentage of permits that are issued for foreign workers (the “Permits”). In case of such violations, Permits are not issued and existing Permits are not extended, and the last Permits issued are revoked.

Alternatives provided by the Labor Code

  • Amending the labor conditions: in case of a change in the current economic conditions or a reduction in the volume of work, in order to preserve jobs, the employer may offer the employee to amend the labor conditions (e.g., transfer to part-time work, reduce salary), subject to a 15-days' advance notice to the employee and execution of an additional agreement to the employment agreement (employee's refusal may constitute a ground for termination of the employment agreement).
  • Temporary transfer to another job: the employer has the right, without the employee's consent, to transfer the employee to another job for a period of not more than three months in the same organization (the previous position and salary are reserved for the employee).
  • Transfer to remote work: the employer has the right to introduce a remote work mode. The employer introduces fixed recording of all working time for employees engaged in remote work, methods of control over which are determined in the employment agreement.

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If you have any questions or would like more information on the issues discussed in this LawFlash, please contact the following Almaty-based members of Morgan Lewis’s corporate and business transactions practice: Aset Shyngyssov and Bakhytzhan Kadyrov.