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Employment relations

Labour Law

 

The principal legal act regulating employment  relations is the Labour Code of the Kyrgyz Republic.

 

 Treaties and other international law instruments ratified by the Kyrgyz Republic constitute  an integral part of the current Kyrgyz law and are binding in their entirety and directly applicable in the Kyrgyz Republic. It must be noted that the rules of the  treaties ratified by the Kyrgyz Republic which are more favourable to  employees shall prevail over the rules set forth in the  laws and other regulatory acts of the Kyrgyz Republic, contracts  or collective agreements .   

 

Employment Contract

 

An employment contract  is an agreement between an employee and an employer whereby the employer undertakes to provide the employee with the work agreed on, to ensure proper working conditions  as required by Kyrgyz law, collective agreement, contracts, internal regulations containing labour law provisions, to timely and fully pay salary to  the employee, and  the employee undertakes to personally perform his/her job functions in the relevant area of practice or official capacity and to observe the internal working regulations. 

 

An employment contract is executed in writing, in two counterparts  signed by both parties. The hire of an employee is completed within three days by the order (instruction or resolution) of the employer based on the employment contract.

 

An improperly executed employment contract may nevertheless be deemed concluded, if an employee has actually set  to work with the consent and on the instruction of the employer or its representative. However, permitting the employee to work does not relieve the employer  of the obligation to execute  a written employment contract  with such employee.  

 

Employment contracts are executed for an indefinite period or definite period (of not more than 5 years for fixed-term employment contracts) or such other period as may be set forth in Kyrgyz law. 

 

The fixed-term employment contract is entered into if employment relationship cannot be established for an indefinite period given the nature and conditions of the work to be performed, unless otherwise provided by Kyrgyz law.

 

Unless the term of the employment contract is specified therein in writing, such contract is deemed executed for an indefinite period. If neither party demands the termination of the fixed-term employment contract due to its expiration, and the employee continues to work after its expiration the employment contract is deemed executed for an indefinite period.  

 

Employers are prohibited from executing fixed-term employment contracts without good cause to avoid offering  employee rights and benefits guaranteed under Kyrgyz law. 

 

Probationary Period

 

When executing an employment contract, the parties may agree to a probationary period to determine if an employee is suitable for a particular job. The probationary period must be stipulated in the employment contract and may not exceed three months for general staff and six months for executive staff including senior managers and their deputies, senior accountants and their deputies, chiefs of branches, representative offices and other standalone subdivisions, unless otherwise provided by Kyrgyz law. The probationary period may not be extended even with the employee’s consent.

 

If the employee’s performance on probation is not satisfactory, the employer may terminate the employment contract by giving at least 3 days’ prior written notice to the employee stating the reasons for considering the employee to have failed to satisfactorily complete the probationary period.

 

If during the probationary period the employee determines that this job is not suitable for them, the employee may terminate the employment contract by giving 3 days’ prior written notice to the employer without stating the reasons for such termination.

 

If before expiration of the probationary period the employer made no decision to terminate employment, the employee is considered to have satisfactorily completed the probationary period and the employment contract can be subsequently terminated on the general grounds.

 

The probationary period does not include temporary disability and other periods when an employee is actually absent from work (e.g. blood donors are permitted one day off).

 

Job Transfer 

 

A transfer to a different permanent position with the same employer at the employer’s initiative, i.e. a change in employment functions or material terms of the employment contract, as well as a transfer to a permanent position with another employer or to another location together with the employer  is allowed  only with the written consent of the employee. The transfer of an employee to a job contraindicated for that employee due to their health condition is prohibited.  

 

Termination of Employment Contract

 

Kyrgyz law provides a conclusive list of the grounds for terminating an employment contract. The termination of the employment contract is made by a respective order (instruction, resolution) of the employer.

 

Working Time and Rest Time

 

Working time is the period of time during which an employee performs their employment duties in accordance with the internal working regulations  or work schedule or terms of the employment contract.   

 

The legislation limits the working hours per day, per week, per month. 

 

Working time may vary as follows:

 

  • Normal working hours;
  • Short-time working;
  • Part-time working.

 

Normal working hours may not exceed 40 hours per week, with the exceptions specified in the Kyrgyz Labour Code. Fewer hours per week may be specified in employment contracts by agreement of the parties.      

 

Short-time working means working fewer hours than normal ones. It is limited to the following maximum working hours for the following categories of employees:

 

  • maximum 24 hours per week for employees aged 14 to 16; maximum 36 hours per week for employees aged 16 to 18;
  • maximum 36 hours per week for workers engaged in physically demanding labour or exposed to harmful or dangerous working conditions;
  • maximum 36 hours per week for employees with disabilities of groups I and II

 

who are paid at the same rate as the employees working normal hours.

 

Employees may work on a part-time basis by agreement of the parties and are paid in proportion to hours worked. The Kyrgyz Labour Code specifies a conclusive list of persons who are entitled to fewer hours per week or per day at their request.

 

A five-day working week and two-day weekend or a six-day working week and one-day weekend is determined by the internal working regulations or watch schedules. In case of a six-day working week the maximum working hours per day or watch may not exceed: 7 hours per 40-hour working week, 6 hours per 36-hour working week, and 4 hours per 24-hour working week. The day before a holiday and at night, the working time is 1 hour less.

 

Rest time is time when employees take a break from work and may do whatever they choose.

 

Types of rest time are:

 

o          breaks during the working day or shift;

o          daily rest or rest between shifts;

o          weekly rest (days off);

o          non-working public holidays;

o          leaves of absence.

 

During their working day or shift, employees have the right to one rest and meal break of minimum 30 minutes and maximum 1 hour not counted as time worked. The time and duration of breaks are stipulated in staff regulations or agreement between the employer and the employee. Some employees have the right to specific rest breaks during work time if so required by the technology, organization or conditions of work. The types of such work and duration of such breaks are stipulated in staff regulations.

 

Employees have the right to uninterrupted weekly rest (days off). Days off are rest days during the working week. Employees who work a 5-day week are entitled to 2 days off per week; those who work a 6-day week are entitled to 1 day off per week.

 

Non-working public holidays in the Kyrgyz Republic are:

  • January 1 – New Year’s Day;
  • January 7 – Christmas Day (Orthodox Christmas);
  • February 23 – Defender of the Fatherland’s Day;
  • March 8 – International Women’s Day;
  • March 21 – Nooruz National Holiday;
  • May 1 – Labor Day;
  • May 5 – Kyrgyz Constitution Day;
  • May 9 – Victory Day;
  • August 31 – Independence Day; and
  • November 7 – Great October Socialist Revolution Day.

 

Islamic holidays of Orozo-Ait and Kurman-Ait (celebrated according to the lunar calendar) are non-working public holidays.

 

When a non-working public holiday falls on a day off, it is extended to the next working day.

 

Employees are entitled to 1 annual paid leave of 28 calendar days. The annual paid leave longer than 28 days (extended annual leave) is granted to employees in accordance with the Labor Code and other laws of the Kyrgyz Republic.

 

The time on leave is counted as calendar days. If non-working public holidays occur during the leave period, these days will not be included in the leave period and will not be paid. The leave record card must be kept for each employee to reflect all data about leaves taken. The leave is documented by the order (instruction, resolution) or leave memo issued by the employer or its authorized person.

 

Employees may be granted a leave without pay upon request for family or other valid reasons. The duration of such leave is determined by agreement between the employer and the employee. The employer must grant such leave in cases provided by the Labour Code such as birth of a child, registration of marriage, death of close relatives, etc.). While on leave without pay, employees retain the right to their jobs (positions). The Labour Code prohibits employers from directing employees to take leave without pay.

 

Compensation of Employees

 

Compensation of employees refers to wages paid by employers to employees for work done in accordance with laws, other regulatory acts, collective bargaining agreements, arrangements, internal regulations and employment contracts. 

 

Wage is monetary remuneration paid by an employer to an employee in exchange for work done depending on its complexity, quantity, quality, conditions and employee’s qualification plus compensations and incentives (for example, premiums). From the legal point of view, the term “wage” is more accurate that the term “compensation of employees” because it refers to the employee’s category. .

 

Wage is paid in cash in the national currency of the Kyrgyz Republic (KGS). Employees may not pay compensation of employees with promissory notes, debt instruments, ration cards, or other similar money substitutes.

 

Minimum Amount of Compensation

 

A minimum wage (minimum compensation of employees) refers to a guaranteed monthly wage paid to an unskilled employee who completed minimum hours of ordinary work in ordinary working conditions.    

 

A minimum compensation of unskilled employees is established by law and applies throughout the territory of the Kyrgyz Republic and cannot fall below subsistence level of an individual able to work.

 

In the Kyrgyz Republic, a statutory minimum wage is KGS 1,060  (approximately USD 14.27  as of March 2016).  

 

A monthly compensation of an employee who has completed minimum hours of work over the given period and performed their employment duties may not fall below the statutory minimum wage.

 

A minimum wage does not include surcharges and bonuses, premiums and other incentive payouts, as well as payments for working in abnormal or particular climatic conditions or areas exposed to radioactive pollution, nor does it include other compensatory and social welfare payments.

 

Due Date and Procedure for Payment of Wage  

 

Due dates for payment of wage are established by a collective agreement or internal regulations of an employer. Wage is paid at least once every calendar month.

 

At the time of payment of wages, employers must notify employees in writing of all amounts comprising the wage and payable to them for the given period of time, the amounts withheld and the grounds for withholding, and the amount receivable.

    

Wages may be paid to employees at place where they perform work or may be transferred to bank account specified by them as set forth in the collective agreement or employment contract.

 

Wages are paid to employees directly, except as otherwise provided by law or employment contract, for example, via a proxy.

 

If a regular payday falls on a weekend or public holiday, wage is paid on the day preceding the weekend or holiday. Vacation pay must be paid at least 3 days prior to such vacation.

 

In case of employers’ failure to pay wages, vacation pays or other amounts payable to employees when due, such amounts will bear interest of 0.15% of the amount outstanding as of the date of actual payment per each calendar day of delay.

 

In case of employers’ failure to pay all amounts payable to discharged employees when due will bear interest of 0.5% of the amount outstanding as of the date of actual payment per each calendar day of delay.

 

In 2015, to balance the interests of the employee and the employer, the Government of the Kyrgyz Republic made amendments to labor legislation whereby the maximum default interest (0.15% and 0.5%) was limited to 200% of the principal. This maximum default interest limitation applies only to the period from the date of default to the date of receipt of the claim for payment of salary, leave allowance or other overdue amounts payable to the employee. After the date of receipt of the claim, the maximum default interest limitation does not apply and the default interest accrues until the date of actual settlement.

 

Extra pay for dual employment/multiple jobs or replacement of temporarily absent employees is determined by agreement between the employer and the employee  but may not be below 30% of the gross wage payable for extra job.  

 

Employees working at night must receive extra pay for each hour but not less than one and one-half times the regular pay rate.

 

Employees working overtime must receive extra pay of  at least one and one-half times the regular pay rate  for the first two hours and double time pay thereafter.

 

Employees working on day off or non-working public holiday must receive extra pay of at least double time pay.

 

Employees having idle time through the fault of the employer must receive at least two-thirds of the regular pay rate. Employees having idle time through no fault of the employer and the employee must receive at least two-thirds of the regular pay rate (gross wage). Employees having idle time through their own fault receive no pay.

 

Labour Dispute Resolution

           

A party of the employment contract (an employer or an employee) which inflicted damages on the other party must reimburse it for such damages as provided by Kyrgyz labour law. The amount of damages may be specified in the employment contract or other agreements executed in writing and attached thereto. In which case, damages payable by the employer to the employee under the contract may not be less and damages payable by the employee to the employer under the contract may not be more than the amount specified in the Labour Code or other laws of the Kyrgyz Republic. Termination of the employment contract after infliction of damages does not relieve the contracting party of liability.   

 

Individual labour disputes, i.e. unresolved disagreements between the employer and the employee, are referred to labour dispute committees established within the employers (having 10 or more employees), or labour inspection authority or courts of the Kyrgyz Republic. The employee may at its own discretion choose one of these authorities to resolve a labour dispute. If there is no labour dispute committee, such dispute will be referred to the labour inspection authority or court.

 

Generally, the period for referring disputes to the above authorities is 3 months from the date of becoming aware of a violation of rights or 2 months from the date of receiving the notice of dismissal or the date of handing over the service book in actions for wrongful dismissal. In actions for unpaid wages, the period of limitation does not apply.

 

Employer’s Liability

 

An employer incurs liability for damages caused to its employees by an occupational injury or disease or other health impairment arising out of employment and occurring both on and off site or on the way to or from work in a transport vehicle provided by the employer.  

 

Employment of Foreign Nationals

 

Foreign nationals employed in the Kyrgyz Republic are subject to the requirements of the Labour Code, other laws and regulations of the Kyrgyz Republic containing the provisions of labour law, unless otherwise provided by Kyrgyz laws or treaties. 

 

Employees of legal entities based in the Kyrgyz Republic and fully or partially founded or owned by foreign companies or nationals (including subsidiaries of transnational corporations) are subject to the requirements of laws and regulations of the Kyrgyz Republic containing the provisions of labour law, unless otherwise provided by Kyrgyz laws or treaties. 

 

Rights of Foreign Employees

 

Foreign employees have the right to use their ability to work and to choose their trade, occupation or profession freely provided that they have a proper proof of education or experience and other supporting documentation.   

 

Work Permit

 

Employers may hire and employ foreign nationals on the basis of employment permits while foreign nationals may work or do business in the Kyrgyz Republic (except nationals of the Russian Federation, Republic of Kazakhstan, Republic of Belarus, Republic of Armenia[1]) on the basis of employment permits and work permits.  The competent authority responsible for issuing permits to employers to hire foreign employees and work permits to foreign employees is the State Migration Service under the Government of the Kyrgyz Republic.  

 

There is a fee to apply for employment or work permits collected by the migration authority to cover the cost of issuing such permits. The cost of employment and work permits is determined by the Kyrgyz Government.

 

The foreign worker quotas are set and approved by the Kyrgyz Government annually 4 months before the beginning of the calendar year with due regard being given to the interests of the state and the local labour market situation. The foreign worker quotas are distributed by the State Migration Service of the Kyrgyz Republic among the employers hiring foreign nationals and stateless persons to work in the Kyrgyz Republic with due regard being given to their input in the country’s economy and with preference in filling vacancies being given to Kyrgyz nationals.

 

[1] Under the Treaty on the Eurasian Economic Union dated May 29, 2014, employees working in its member states are not required to receive permits to work there.