Labour Code Amended

Law No 675-VQD, dated 31 May 2017, of the Republic of Azerbaijan amending the Labour Code of the Republic of Azerbaijan was adopted. The amendments come into force as of 1 January 2018.

Term of Employment Agreement

Under the new amendments, an employment agreement shall be made indefinite and termed. A termed employment agreement is made for a period agreed between the parties. Under the presently applicable rule, however, an employment agreement is made without determining its term in advance (indefinite) and for a period up to five years (termed).

Notice Periods

Under the presently applicable law, upon downsizing and staff reduction, an employer must notify the employee at least two months in advance of terminating the employment agreement. To enable the employee to find a new job, the employee is allowed not to report for work with pay one working day each week during the notice period. Under the new adopted amendment, upon downsizing and staff reduction, an employer making notifications of employment termination must be taking into account employees' years of service, i.e., as opposed to notifying the employee two months in advance of termination of employment, the employer will formally notify the employee in time periods according to the years of service based on his/her employment agreement (employment agreements).

Under the amendment, should the employee's years of service be less than one year, he/she shall be notified of downsizing and termination of his/her staff unit at least two calendar weeks in advance, should the years of service be one to five years, in at least four calendar weeks, should the years of service be five to ten years, in at least six calendar weeks, and, should the years of service be in excess of ten years, in at least nine calendar weeks in advance.

Severance Pays

Another amendment made to the Code relates to severance pays to employees upon termination of employment. As amended, severance pays, upon termination of employment following termination of an enterprise and downsizing and staff reduction, shall be paid depending on the years of service. If an employee's years of services are less than one year, the severance pay shall equal the average monthly salary, should years of service be one to five years long, 1.4 times the monthly average salary amount, should years of service be five to ten years, 1.7 times the monthly average salary amount, and, should the years of service be in excess of ten years, the...