Legal alerts / 26.03.2020

Coronavirus and days off from March 30 in Russia: legal consequences for business

On March 25, the President of Russia signed a decree introducing emergency measures to fight the coronavirus epidemic. The week from March 30 to April 3 has been declared a non-working week.

We have prepared answers to the most frequently asked questions about: who is covered by the decree and who should continue to work; whether it is possible to engage individuals under a contract of a civil law nature; when salaries are payable; and how to deal with rental payments during this period.

What does this decree mean?

Labor legislation prohibits the involvement of workers in labor activities during non-working days. Thus, even though the presidential decree does not prohibit organizations from undertaking their activities within this period, such activity will generally cease due to employees not attending work.

At the same time, companies have to pay salaries in full during this period.

Who fall under this decree?

The decree covers all organizations in Russia, with the some exceptions:

  • organizations operating non-stop, which include factories with a continuous technical cycle that cannot be suspended (other organizations with a non-stop working schedule, such as shops, do not qualify here);
  • medical and pharmacy organizations;
  • organizations providing the population with food and essential goods;
  • organizations performing urgent emergency works;
  • organizations performing emergency repair, and loading and unloading operations;
  • government agencies and the media (with reduced staffing levels).

There are no changes for companies that qualify for one of these exceptions – they continue to work as usual and on the standard terms of employment with their employees.

A company does not fall under the exceptions. Can it continue to work?

The decree does not explain how its provisions correspond with the general conditions of labor legislation. Meanwhile, the latter contains a number of grounds to work on weekends and during holidays, namely:

  • with the consent of the employee for urgent and unforeseen work;
  • without the consent of the employee for the prevention of disasters or in emergency circumstances;
  • to perform work related to the necessity to serve the population.

Moreover, categories of employers qualifying for exceptions within the presidential holiday program are vague. For example, it is unclear what products are considered “essentials”. Most likely, this issue will be resolved on a case-by case basis taking into account specific facts relating to and features of the organization in question. In the light of this, we recommend that you:

  • obtain legal advice before proceeding in contentious situations;
  • in any case, formalize the engagement of workers for work during this period in accordance with article 113 of the Labor Code of the Russian Federation: issue a written order justifying the need for work during non-working days; obtain the employee’s written consent to this; and ensure increased salary for the non-working period as specified by law.

Is it possible to continue engaging individuals under a contract of a civil-law nature?

The decree does not apply to individual entrepreneurs, self-employed persons and individuals performing work under civil law contracts. However, engaging them to work during this period gives rise to some risks:

  • much work by its nature is not supposed to be performed at weekends;
  • labor legislation prohibits a civil law contract from substituting for what is substantially a labor relationship; an employer breaching this rule may face serious sanctions. In the current environment, companies requiring their self-employed contractors to continue to work seriously increase the risk of being liable for breaching this rule.

Other consequences

  • Salaries that are due in the week from March 30 to April 3 must be paid no later than Friday, March 27.
  • The cessation of work due to the emergency presidential decree will most likely be treated as a force majeure in terms of performing agreements with counterparties during this period (for more details on force majeure, see our alert). In this case, liability arising for delays during this period will be excluded.
  • At the same time, there are no grounds for not paying for leased premises during the non-working period. The decree itself does not preclude tenants from the intended use of such premises.
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