The Constitutional Court of Russia defended the right of employees to severance pay upon dismissal by agreement of the parties

The Constitutional Court of Russia ruled that an employee is entitled to a severance pay upon dismissal by agreement of the parties, even if the employer did not take into account the financial capabilities of the organization when concluding an employment contract. This was reported press office KS.

“If the head of an organization, when signing an employment contract or an agreement on its termination, acted in bad faith and unreasonably, without taking into account the financial capabilities of the organization and contrary to its interests, then he must be held liable for the losses caused by such actions. The court does not have the right to refuse an employee who quit by agreement of the parties to recover from the employer a severance pay in the amount established by the employment contract and (or) agreement on its termination, ”the court’s published position says.

The reason for the consideration of the case was the complaint of Natalya Nesterenko, who in August 2020, by agreement of the parties, resigned from the municipal unitary enterprise of the urban district of Shchelkovo “Zagoryanskaya Municipal Housing and Utilities Service”. Her employment contract provided for the payment by her employer of a severance pay in the amount of three months’ salary. Ms. Nesterenko did not receive money – the courts considered that the director of the organization, who signed employment contracts with several employees with the same conditions shortly before leaving the enterprise, abused the right. Claims of Mrs. Nesterenko with the requirement to pay the allowance were not satisfied. At the same time, the courts satisfied similar claims of her colleagues.

The position of the Constitutional Court states that the employer is not obliged to pay the employee severance pay, however, such a clause may be included in the employment contract. In this case, the employee has a reasonable expectation of payment of benefits, according to a press release. The Constitutional Court emphasized that, based on the position of the Constitutional Court, the court decisions in the case of Ms. Nesterenko should be reviewed.

Erdni Kagaltynov