Member Article

On January 1, 2010 the Federal law “On amendment the Federal Law “On the employment of the population in the Russian Federation” (hereinafter – the “Law”) came into force. The Law provides for the equal rights to the dismissed citizens, who worked under employment contract with individual entrepreneurs and to those who were dismissed from legal entities. This concerns dismissals in connection with the liquidation (wind up) of organizations or termination of actitivites of individual entrepreneurs as well as in connection with reducing the staff of an organization or an individual entrepreneur.

Pursuant to the prior provisions of the Federal Law “On the employment of the population in the Russian Federation” the citizens dismissed from the legal entities were entitled to the unemployment allowance calculated pro rata to their average earnings (if they were dismissed under non-guilty grounds and worked for a certain term before dismissal). At the same time former employees of the individual entrepreneurs obtained the unemployment allowance in the amount of its statutory minimum value.

Moreover the citizens employed with the individual entrepreneurs before dismissal were not entitled to receive a retirement pension before retirement age unlike former employees of the legal entities.

In October 2009 the above stated provisions were disputed at the Constitutional Court of the Russian Federation and declared unconstitutional as long as they prevent from paying the unemployment allowance and do not provide for pre-term age retirement pension on equal grounds for citizens, who were employed with individual entrepreneurs and those who were employed with legal entities.

According to the decision of the Constitutional Court the said provisions are considered to lose effect as of the moment of the new legislative regulation is implemented.

The recently enacted Law is aimed at elimination of imparity between these two groups of citizens in the sphere of social unemployment protection, particularly:

1. unjustified differentiation of citizens’ rights with regard to receiving the unemployment allowance depending on employers’ legal form (individual entrepreneurs or legal entities) is excluded;
   
2. citizens are provided with the equal opportunities regarding granting pre-term age retirement pension.