Latest Amendments to Kazakhstan Labour Legislation

The President of the Republic of Kazakhstan signed Law No. 321-VI, On Amendments into Certain Labour-Related Legislative Acts of the Republic of Kazakhstan (Amendment Law) on 4 May. The law entered into force on 16 May and amended a number of legislative acts of the of the Republic of Kazakhstan, including Criminal Code, Criminal Procedure Code, Code on Administrative Offences, and Law of the Republic of Kazakhstan “On Trade Unions.” The key amendments were made into Kazakhstan Labour Code dated 23 November 2015, No. 414-V (Labour Code).

This law flash summarizes the most important novelties in the Labour Code.

Exclusion of Employment Termination by Parties’ Agreement with Compensation Paid

One of the key changes is exclusion of Article 50.3 of the Labour Code, under which one could provide in the employment contract the employer’s right for early termination of the employment, without complying with the requirements of Article 50.2 of the Labour Code (i.e., serving a notice to, and agreeing termination conditions with the employee), but subject to payment to the employee of a compensation, amount of which was pre-agreed in the relevant employment contract.

Due to the exclusion of Article 50.3 of the Labour Code, with the enactment of amendments at issue (i.e., from 16 May 2020) employer and employee can no longer agree in advance in the employment contract the terms of employment early termination with payment of the pre-agreed compensation. Such terms may only be discussed and agreed pursuant to the procedure set forth in Article 50.2 of the Labour Code when either party intends to early terminate the employment.

The Amendment Law does not provide for retroactive effect of its provisions, therefore with respect to employment contracts that as of 16 May 2020 already contain provisions on early termination of the employment subject to payment of compensation, there is a ground to argue that such provisions would remain in effect and may be applied by the parties.

Implementation of Unified System for Employment Contracts Recording and Electronic Documenting

The unified system for employment contracts recording (USECR) was launched by the Ministry of Labour and Social Protection of the Republic of Kazakhstan as early as in 2018 as a pilot project and was used by employers optionally (i.e., was not compulsory)via the website of the electronic labour exchange (enbek.kz). According to the definition given in the Labour Code, the USECR is “…the information system designed to automatize the recording of employment contracts, labour activity and number of employees”.

The Amendment Law provides for the employer’s obligation to use USECR starting 16 May 2020. In particular, it requires that the employers enter into the USECR the information about execution and termination of employment contracts with employee, any changes and/or amendments thereto such as parties’ details, work to be performed and/or labour function, term of the contract, commencement date and workplace description, execution date and number assigned to relevant employment contract (Article 23.1(26) of the Labour Code). The Amendment Law also provides for the employee’s right to receive from USECR the information about his/her activity, as well as the employer’s right to receive from USECR the information about employment background of job seekers (subject to their prior consent) and employees.

As of the date of this lawflash, the website of electronic labour exchange (enbek.kz) enables its registered users - employers to register employment contracts in the USECR. However, the competent labour authority has not yet approved the rules for submission and retrieval of employment information from USECR. Pursuant to clarifications from officials of the Ministry of Labour and Social Protection of the Republic of Kazakhstan, USECR use by employer on a compulsory basis will be implemented step by step in accordance with the above mentioned rules for submission and retrieval of employment information from USECR.

The Amendment Law also addresses the imminent need to implement electronic recording. Thus, changes introduced to Article 11 and Article 33.1 of the Labour Code allow to execute employer’s acts, enter into employment contract, make changes and amendments thereto, in the form of an electronic document certified by electronic digital signature.

Specific Regulation for Employees of Internal Audit Service, Corporate Secretary, and Management Board Members

The special procedure for regulation of employment of a legal entity’s executive body (management board members) (i.e., execution and termination of employment contract, payment of remuneration, financial and disciplinary responsibility, dismissal, etc.) as per procedure and conditions set out in Article 52.1(23) and Article 140 of the Labour Code is now extended to employees of internal audit service and corporate secretary of joint stock companies. Further, to avoid disputes on interpretation of Articles 52.1(23) and 140 of the Labour Code, these articles are amended to confirm application thereof to each member of the management board.

Amendments regarding Conciliation Commissions’ Competence

The Amendment Law introduces express obligation of the employer to establish conciliation commissions and expands the list of disputes that may be considered by state court without recourse to conciliation commission (Articles 23.1(27) and 159 of the Labour Code). Such disputes include (in addition to those on failure to execute decisions of the conciliation commission or issues not resolved by the commission): disputes arising between employer and employee of micro businesses (formerly, small-scale businesses only), disputes between non-profit organization with less than 15 employees and its employees, labour disputes with a domestic worker, sole executive body of legal entity, chief of the executive body of legal entity, and other members of collegial executive body of legal entity (formerly, dispute with head of executive body only). Moreover, the requirement to establish a conciliation commission does not apply as far as certain special categories of employees are concerned, such as military men, employees and officers of special state and law-enforcement authorities, and public officials.

In view of the amendments at issue, the Labour Code also envisages the competence of the conciliation commission to independently resolve the issues regarding reinstatement of missed procedural deadlines, and establishes special procedural deadlines for the parties that may bring an action with the court without recourse to the conciliation commission (Article 160 of the Labour Code).

Other Novelties

Other significant amendments to the Labour Code include the following:

• Amendments regarding the grounds and procedure for termination of employment contract at employer’s initiative (i.e., amendments to Articles 52.1(10), 52.1(11), 52.1(13), 52.1(18) and Article 53 of the Labour Code). For instance, termination of the employment contract for a cause set out in Article 52.1(13) of the Labour Code is subject to confirmation by an internal investigation report with indication of rationale in such report confirming the commitment of guilty actions or inactions by employee. Thus, employers are required to develop and approve the relevant policies on internal investigations.
• Extension (up to three times) of any fixed term employment contract. According to a literal interpretation of Article 30.1.2 of the Labour Code, such extension was previously allowed only for an employment contract executed for one year.
• Amendments regarding work on rotation. In particular,

• Employer’s obligation to temporarily transfer a pregnant woman who is working on rotation, on the basis of a certificate of pregnancy with the term of 12 weeks or more, to a five-day or six-day working week regime and to pay salary for performance of the new work in the amount not less than the average salary of pregnant employee at her last position (Article 44 of the Labour Code). Prior to these amendments, general rules on temporary transfer applied to the pregnant employees without taking into consideration the specificity of rotation work;
• Employer’s obligation to ensure provision of rotational employees with all necessary conditions, both at the work site and in properly equipped accommodation areas (rotation camps), in accordance with the employment contract, collective bargaining agreement and/or employer’s internal regulations on rotation work (Article 135.2 of the Labour Code). Necessary conditions referred to above mean conditions of life and work, i.e., labour conditions required for rotational employee at his/her workplace, including provision of welfare facilities and conditions for having rest and meal;
• it is the first time that work regime of a substitute rotational employee is specifically addressed in the Labour Code (Article 135.5 of the Labour Code).

• Increased penalty (up to 1.25-fold official refinancing rate of the National Bank of Kazakhstan) for late payment of salary. This penalty will also apply to an employer in case of delayed payment of amounts due to employee at employment termination.
• Improvement of army draftees’ status. Subject to availability of the relevant calling-up notice, an employer must reserve the place of employment (position) and salary for an employee - army draftee while passing medical examination commission, (formerly, only the place of employment was reserved for army draftees passing medical examination). The place of employment (position) is also reserved for the entire period of compulsory military service or reservist training of an army draftee.
• Safety requirements when working remotely. With enactment of the amendments at issue, the Labour Code explicitly provides (Article 138.5) that the procedure for observation by remotely working employees of health and safety requirements, and safe execution of work duties, are now determined by an employer’s act. Thus, the employers that shifted employees to remote work, but have no relevant internal rules and policies yet, are required as a matter of priority, to develop and communicate such rules and policies to their remotely working personnel.
• Secondment-related amendments (Article 140 of the Labour Code). The Amendment Law expands the list of entities to which the seconded employee may be assigned. Such entities are now not only the parent and/or subsidiary companies of the seconded employee’s employer, but also branches, representative offices, and other structural divisions thereof, as well as sister companies (including branches and representative offices) of the employer. Further, the conditions and procedure of secondment, including the secondment period, list of positions and number of seconded employees must be established by a civil law agreement between legal entities from and to which the employee is assigned (i.e., employer and accepting entity). Formerly, this was formalized a by a tripartite agreement with the participation of a seconded employee.

CONTACTS

We hope that you find this LawFlash useful. If you have any questions or would like more information on the issues discussed in this LawFlash, please contact the following Morgan Lewis lawyers:

Almaty
Aset Shyngyssov