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Secondment agreements, Russian style

Secondment agreements, Russian style

If you do business in Russia, then you need to know about the country’s new employee secondments law, due to come into force in January 2016.

Secondment arrangements have always existed in Russia, but they were largely unrecognised by the law. The new legislation seeks to change this.

The starting point is that the new legislation will prohibit all secondment arrangements in Russia, except in two specific circumstances:

  • Secondments organised by Russian recruitment agencies (in other words, not foreign recruitment agencies), or

  • Secondments from an employer to a related company.

For international businesses sending staff into Russia, the second option is likely to be the more relevant. As to this, the following conditions will apply:

  • The secondee must only be seconded to an affiliate of the employer (which may include a joint venture partner)

  • The employee must consent to being seconded

  • Trade unions of the host company must give their consent if more than 10% of the total number of the company’s workforce are secondees.

The new legislation also requires secondees to be paid the same as comparable employees of the host entity. The host entity will also be liable for any failure of the employer to pay salary, severance, vacation payment or other payments due to secondees. These rules cannot be waived.

One positive aspect of the law is that international secondees to a Russian affiliate will no longer need a local employment agreement for immigration purposes, which has always caused headaches in the past.

Finally, there will be a total bans on secondments in the following situations:

  • To replace employees on strike

  • In the event of an insolvency of the host entity

  • to replace employees who stopped working in cases provided by law, due to non-payment of salary for a period exceeding 15 days.