New position of the Russian Constitutional Court on payments to dual job holders upon dismissal

The Russian Constitutional Court heard a case[1] of an employee who had been dismissed from his principal place of work due to redundancy. The employer paid the employee a severance allowance, but refused to pay the employee’s average monthly earnings for the period of finding a new job [2]. The employer believed that the employee was a dual job holder and, therefore, such an employee was not entitled to a guarantee in the form of payment of his average monthly earnings. The courts sided with the employer in a dispute with the employee.

However, the Russian Constitutional Court ruled that such a reading of the law was inconsistent with the Constitution. Upon dismissal from the principal place of work, an employee loses part of the total labor income (which may be significant). This leads to the need to find a new job. Moreover, dismissal from the principal place of work does not transform a dual job employment contract into a principal one. Therefore, taking into account these factors, it is impossible to deprive dual job holders of guarantees in the form of payment of average monthly earnings for the period of finding a new job.

Thus, the Russian Constitutional Court held that the failure to pay average monthly earnings to a dual job holder upon dismissal from the principal place of work due to liquidation or downsizing/redundancy is contrary to the Constitution. This means that the employer is obligated to pay such an employee average monthly earnings for the period of finding a new job, even if the employee has another paid job with another employer.

What are the implications of this ruling for employers and employees?

First, until changes are made to applicable Russian laws, the employer will be obligated to follow the position of the Russian Constitutional Court. Second, an employee may apply to the employer asking for the payment of the employee’s average monthly earnings, if such earnings have not been paid. And the employer will be obligated to pay them. Third, there is a high risk that valid decisions on similar disputes between employees and employers will be overturned. These are decisions that contradict the position of the Russian Constitutional Court.

The Forte Tax & Law team will be pleased to advise you on labor law issues and the resolution of labor disputes.

If you have any questions or you would like to discuss something, please send an email to Julia Talagaeva or Ekaterina Beliaeva.

[1] Ruling No. 54-П of the Russian Constitutional Court dated November 22, 2024 In the case of the verification of the constitutionality of parts two and three of Article 318 of the Russian Labor Code in connection with the complaint filed by citizen V. V. Sergeev.

[2] Average monthly earnings can be paid for up to six months.