New Labor Code: Employment Agreement Termination

In 2015, the head of the state signed the new Labour Code of the Republic of Kazakhstan, which came into force on 1 January 2016.

Provisions of this Code introduced amendments to many aspects of employment relationships, and one major issue, both for employers and employees, shall be whether the grounds and procedure for the termination of employment agreements have changed.

In this connection, we decided to take a closer look at the procedure for termination of employment agreements in view of changes in legislation.

Grounds for termination of employment agreement

Several grounds for the termination of employment agreements at the initiative of employers, as well as the transfer of an employee to another employer, have become fundamentally new.

Other than that, the general grounds for termination of employment agreements remain the same and include such items as termination of employment contracts upon mutual agreement of the parties, upon expiry of the agreement, at the initiative of employer, at the initiative of employee and other grounds in compliance with Article 49 of the Labour Code.

Another considerable difference between the old and the new edition of the Labour Code is the change in the procedure for termination of employment agreements. We'd like to further review this procedure in detail in individual cases of employment agreement termination, as well as risks associated with violation of the established procedure for termination.

Termination of employment agreement upon mutual agreement of the parties

Parties in the employment agreement may decide to terminate the employment agreement upon mutual agreement in two cases.

In the first case, the party that indicated its willingness to terminate the employment agreement must send a written notification and await the decision of the other party within three working days. In case of a positive response, the parties sign an according agreement, and the employer issues an order on the termination of the employment agreement upon mutual agreement of the parties.

If no positive response follows, then the grounds for terminating the labour agreement cannot be applied.

In the second case, the parties may provide in the employment agreement for the employer's right to terminate the agreement without notification but with payment of compensation. Whereas the old edition of the Labour Code in this scenario specified the amount of compensation as not less than the average wage of the employee for the calendar year, the new Labour Code determines the amount of compensation in accordance with the employment agreement.

If the employment agreement contains such an item, the employer may, without any preliminary notifications, issue an order to terminate the employment agreement with payment of previously agreed amount of compensation to the employee.

Termination of employment agreement upon expiry of agreement

According to the regulations of the new Labour Code, upon expiry of the employment agreement the party that expressed willingness to terminate the employment agreement must file a written notification to terminate the agreement with the other party on the last working day.

If neither of the parties are notified about the termination of the employment...

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