Ulan Batenov, Manager of Legal Department of MinTax LLP, in his article considers some changes introduced to the labor legislation of the Republic of Kazakhstan (RoK) by the RoK Law #321-VІ ZRK dated 4 May 2020.
The reason for writing this article, as mentioned in the introduction, were the numerous changes made to the RoK Labor Code #414-V ZRK dated 23 November 2015 (the “Labor Code”) and not alone, by the RoK Law #321-VІ ZRK dated 4 May 2020 “On Amendments and Additions to Some Legislative Acts of the RoK on Labour Issues” (the “Law”).
The amendments to the Labor Code and the adoption of this Law have been actively discussed and covered in the press since the end of last year. Repeatedly, representatives of the relevant department and other concerned bodies clarified what kind of changes were expected, and all this was covered in the media, mainly from the position of employees.
In this article, we will try to consider these changes from the perspective of the employer.
Having considered all the changes made by the Law to the Labor Code, we can conditionally divide them into three blocks:
1) changes made as part of the digitalization of HR records management;
2) changes made to improve the condition of employees and eliminate discrimination at work; and
3) changes made in order to improve safety and labour protection issues.
So, let us consider some changes in the order of the conditional separation that we have given.
- Changes made as part of the digitalization of HR records management.
It is worth noting here that the unified recording system for employment contracts on the portal https://www.enbek.kz has been launched in pilot mode long time ago. Throughout the whole year 2019, labour and employment authorities actively held all kinds of seminars in which they asked employers to enter data on labour contracts into a single recording system for labour contracts. But then employers refused to do this, appealing that there was no such obligation. Now, this obligation has appeared.
Thus, paragraph 2 of Article 23 of the Labour Code, regulating the obligations of the employer, was supplemented by sub-paragraph 27) of the following content:
“27) to enter information on the conclusion and termination of a labour contract with an employee, amendments and (or) additions to it, containing the information provided for in sub-paragraphs 1), 2), 3), 4), 5) and 13) of paragraph 1 of Article 28 of this Code, into a unified system of accounting for labour contracts in the manner prescribed by the authorized state body in the sphere of employment; ”.
That is, now all employers without exception are obliged to enter information not only on concluded labor contracts, but also on amendments made to such labor contracts regarding the details of the parties, position, place of work, term of the contract, date of commencement of work, as well as the number and date of signature.
Other changes to the Labor Code relating to the digitalization of HR records management include:
- introducing the concept of “a unified system of accounting for labour contracts” by supplementing paragraph 1 of Article 1 of the Labour Code with a new sub-paragraph 35-1);
- providing the opportunity to draw up acts of the employer in electronic form (paragraph two of Article 11 of the Labour Code);
- expanding the competence of the authorized state body on employment in the field of regulation of employment relations, in particular: a) development and approval of the rules for the submission and receipt of information on labour contracts in a unified system of accounting for labor contracts; b) ensuring confidentiality and protection of employees’ personal data contained in the unified system of accounting for labor contracts; c) submission of information from the unified system of accounting for labour contracts to individuals and legal entities (sub-clauses 41-5, 41-7, 41-8 of the first paragraph of Article 16 of the Labour Code);
- adding the right of the employee to receive information about his labor activity, including the labor contract, from the unified system of accounting for labor contracts (sub-paragraph 25) of paragraph 1 of Article 22 of the Labor Code);
- adding the right of the employer to receive information about the labor activity of applicants for a vacant position and employees from the unified system of accounting for labor contracts. At that, information about the applicants can only be obtained with their prior consent (sub-paragraph 13) of paragraph 1 of Article 23 of the Labour Code);
- the possibility of concluding and amending the employment contract in electronic form (part two of paragraph 1 of Article 33 of the Labour Code).
- Changes made to improve the condition of employees and eliminate discrimination at work.
We believe that these changes are based on the practice of labor conflicts that occurred in 2019 and in previous years. To resolve issues locally, commissions were created at the government level, at the level of local executive bodies. In the course of problem solving it became clear that the cause of the employees’ discontent in the field was not the last drops that provoked it, but everything that lies much deeper. And as a result, today we have got those changes in the Labor Code that we have attributed to the above block.
We will analyze the main ones that really introduce new provisions, since there are changes that are only specifying by nature.
Let us start with the employer’s new obligation to ensure equal pay for equal work for employees, as well as equal working conditions without any discrimination, which was introduced by adding the new sub-paragraph 28) to paragraph 2 of Article 23 of the Labor Code. And if non-discrimination in terms of work remuneration existed earlier (it was simply indicated in the rights of the employee), then non-discrimination in terms of working conditions is an innovation of the Law that we are considering.
It should be noted that the legislator has not linked the provision of working and living conditions to the level of work performed by the employee, as it takes place in relation to wages. That is, working and living conditions must be the same for all employees, without exception.
For these purposes, the legislator also gives a separate concept of working conditions by introducing a new sub-paragraph 66-1) in paragraph 1 of Article 1 of the Labor Code which states the following:
“66-1) working conditions – conditions of employment necessary for an employee to stay at the workplace, in particular – while working on a rotational basis, including the provision of sanitary facilities, as well as conditions for rest and meal”.
Not limited only to the obligation, the legislator also introduced a liability for violating the employee’s right to equal working and living conditions.
Thus, in accordance with sub-paragraph 1 of Article 4 of the Law, the first paragraph of the first part of Article 90 of the RoK Code “On Administrative Offences” No. 235-V ZRK dated 5 July 2014 (hereinafter – the “CoAO”), was supplemented with the words “as well as to equal working and living conditions”.
Thus, in accordance with part one of Article 90 of the CoAO, admission of discrimination in the sphere of labour by an employer expressed in
violation of the right of a worker to equal payment for equal labour, as well as to equal working and living conditions,
– shall entail a fine on officials, small business entities or non-profit organizations – in amount of thirty, on medium business entities – in amount of sixty, on large business entities – in amount of one hundred monthly reference indices.
Next, I would like to consider innovations in the issues related to the termination of employment relations.
Let us begin with the exclusion of paragraph 3 of Article 50 of the Labour Code.
What was provided for in paragraph 3 article 50 of the Labour Code and why was it excluded?
So, before the enactment of the Law, in accordance with paragraph 3 of Article of the Labor Code, the parties to the labor contract could stipulate the employer’s right to terminate the labor contract at any time, without the grounds provided for in Article 52 of the Labor Code, with the payment of a compensation the amount of which was determined by the same labor contract.
Bona fide employers tried to stipulate that clause in an employment contract only for the cases of worsening economic conditions that could lead to a reduction in the number or staff of employees, in order not to carry out the entire reduction process and save time. And the amount indicated as a compensation was the amount that the employee would have received in case of such staff reduction, or at least the amount of one average monthly wage.
The main condition of paragraph 3 of Article 50 of the Labor Code was that such right of the employer was included in the labour contract by agreement with the employee. That is, upon registration of employment, the employee and the employer had to coordinate the inclusion of this norm to the labour contract, and coordinate the amount of compensation.
In practice, this norm was included in conjunction with the entire voluminous text of the labor contract, which often led to a disproportionately smaller amount of compensation paid to the employee, compared to the costs associated with losing a job. We believe that the existence of negative practice has led to the exclusion of this norm. At the same time, the legislator had the opportunity to introduce an alternative (compromise) norm. However, he did not go that way. We believe that in the future, this section will undergo changes which will meet the interests of not only the employee, but also the employer.
Another innovation of the Law is the return of the norm contained in the previous Labor code, stating that the employee can independently withdraw his written application to terminate the employment contract. This is reflected in the new wording of paragraph 4 of Article 56 of the Labor Code.
This norm has always been ambiguous. It is no secret to anyone that often an application for termination of an employment contract is used by an employee to “knock out” more advantageous, sometimes unreasonable conditions. And the ability to withdraw such an application only unties the employee’s hands.
No less interesting innovation has occurred in the procedure for the termination of the employment contract provided for in Article 53 of the Labor Code.
Thus, in accordance with paragraph 7-2 of Article 53 of the Labor Code, the termination of the employment contract on the grounds provided for in sub-paragraph 13) of paragraph 1 of Article 52 of this Code should be confirmed by an act of internal investigation, containing justifications confirming the commission of guilty actions or inaction by the employee. The internal investigation procedure is established by the act of the employer.
Previously, in order to terminate an employment contract on these grounds, it was necessary to comply with regulations on the imposition of disciplinary sanctions. That is, termination occurred as a measure of disciplinary action.
Now, it is necessary to approve the investigation procedure by an internal act, and then conduct an internal investigation in order to confirm the guilty actions of the employee, the results of which should be formalized in an act. Here one question is interesting: should the employer establish the objective and subjective side of the guilty actions/inaction? Or is it enough to establish the object and subject of actions/inaction?
It should be noted that the norm of sub-paragraph 13) of paragraph 1 of Article 52 of the Labor Code itself has changed.
Thus, in accordance with sub-paragraph 13) of paragraph 1 of Article 52 of the Labour code, an employment contract with an employee may be terminated at the initiative of the employer in cases of guilty actions or inaction of an employee serving monetary or commodity values, and also using his official position in his own interests or in the interests of a third party contrary to the interests of the employer in return for receiving material or other benefits for himself or other persons if these actions or inaction give rise to a loss of confidence on the part of the employer.
That is, now a guilty action of the employee also implies the use of his official position in his own interests, or in the interests of a third party.
Further, we will consider innovations of the Law relating to work time, rest time, as well as rate setting and work remuneration.
So, before the enactment of the Law, as per paragraph 3 of Article 70 of the Labor code, upon the written application of an employee, the employer was obliged to set a part-time working time for pregnant women, one of the parents (adoptive parent), having a child (children) under the age of three. Now, this right is also granted to employees who care for a sick family member in accordance with a medical certificate.
The grounds on which the employer is obligated to provide the employee with non-compensated absences have also expanded.
Previously, the death of only close relatives was one of the reasons for granting a non-compensated absence. Now this provision has been clarified: in accordance with sub-paragraph 3) of paragraph 3 of Article 97 of the Labor Code, on the basis of a notification of the employee the employer is obliged to grant an unpaid leave for up to five calendar days in case of death of close relatives, as well as the spouse and (or) their relatives (full and half brothers and sisters, parents (parent), children, grandfather, grandmother, grandchildren).
The next change relates to additional work, that is, the expansion of the service area and the substitution of an absent employee.
All the above things are done on instruction of the employer. In turn, almost all labour contracts and job descriptions contain a provision that the employee is obliged to fulfil other instructions of the employer. Thus, upon receipt of such an instruction, the employee had to fulfill it.
Now, Article 111 of the Labor Code is supplemented with a new paragraph 4, according to which the Employee has the right to refuse to perform additional work, and the employer – to cancel the order to perform it, having notified the other party in writing no later than three working days before the termination of additional work.
In case of early cancellation of the order or refusal to perform additional work by the employee, the employer is obliged to pay the employee wages for the period worked.
That is, the employer must now take into account the probability of the employee’s refusal from substituting the absent employee and from expanding the service area.
Another innovation discussed was the increase of the penalty for late payment of wages, and the application of the same penalty for late payment of amounts, upon termination of the employment contract.
We are talking about increasing by one quarter the size of the penalty provided for in Article 113 of the Labor Code. So, if previously the penalty was equal to the multiple refinancing rate of the RoK National Bank, now this amount comprises 1.25 times the official refinancing rate of the RoK National Bank. Given that the refinancing rate of the RoK National Bank is the annual interest rate, the increase can be considered insignificant. But still, this is an increase.
Also, some interesting innovations have occurred in the sphere of guarantees envisaged by the Labor Code for employees, in particular, the amendment of Article 124 of the Labor Code, which now provides for the preservation of a job place for employees called up for military service.
Prior to such changes, those who have completed military service only had a priority right to be hired by the organization where they worked before being called up for military service. And only within two months after completing military service.
That is, now employers, when hiring an employee to the job of an employee who has left for military service, must conclude an employment contract for the time of substitution of the temporarily absent employee.
The issues of consideration of individual labor disputes were not left unchanged as well.
In particular, according to paragraph 1 of Article 159 of the Labor Code, individual labor disputes are considered by conciliation commissions, with the exception of disputes arising between an employer and an employee of a micro-enterprise, a non-profit organization with no more than fifteen employees, a domestic worker, the sole executive body of a legal entity, the head of the executive body of a legal entity, as well as other members of the collegial executive body of a legal entity, and with respect to unresolved issues or a failure to comply with the decision of the conciliation commission – by the courts.
That is, if previously the exception was made for employers referred to small business entities, now the exception is the employers classified as micro-enterprises. It means that all employers referred to small businesses now must create conciliation commissions to consider individual labor disputes.
The legislator also fixed this obligation in paragraph 2 of Article 23 of the Labor Code, by introducing a new sub-paragraph 26), whereby the employer is obliged to create a conciliation commission in the manner established by this Code.
- Changes made in order to improve labour safety and labour protection issues.
In my opinion, numerous publications in the media quite unjustly bypassed the changes that we conventionally called the changes made in order to improve labor safety and labor protection issues. Because I think that it is the putting into circulation and the application of new standards in the field of labor protection that will cause a lot of questions for employers.
And this is primarily due to the introduction of such an innovation as the labor protection management system.
Thus, in accordance with sub-paragraph 18) of paragraph 2 of Article 182 of the Labor Code, the employer is obliged to implement a labor protection management system and monitor its functioning.
At the same time, please note that there are no reservations that certain categories of employers are obliged to implement the labor protection management system. That is, such a system should be developed and implemented by almost all employers.
Now let us try to figure out what kind of system this is.
Thus, in accordance with sub-paragraph 32-1) of paragraph 1 of Article 1 of the Labor Code, the labor protection management system is a set of interrelated measures for implementing labor protection policies, fulfilling labor safety requirements and managing professional risks.
Further, in accordance with sub-paragraph 41-1 of the first paragraph of Article 16 of the Labor Code, the authorized state body on employment shall develop and approve model regulations concerning the labor protection management system.
That is, the authorized body will develop model regulations concerning the labor protection management system, on the basis of which employers will develop their own regulations and implement the labor protection management system for themselves. At first glance, everything is easy and simple.
It is worth saying that the approved regulations concerning the labor protection management system are not available yet (as of the date of this article), although the employer has already become obliged to implement the labor protection management system. However, we saw a draft of such model regulations earlier when it was discussed in the “Open RLA” section of the e-government portal. Therefore, in this article we will be guided by this draft.
So, in accordance with paragraph 2 of the draft Model Regulations concerning the Labor Protection Management System (hereinafter – the “Draft Model Regulations on LPMS”), the employer shall create and maintain LPMS through compliance with state regulatory requirements for labor protection (1), taking into account the specifics of his activity, achievements of modern science and best practice, commitments made and on the basis of international, interstate and national standards, guidelines, as well as recommendations of the International Labor Organization on LPMS and production safety.
It is already clear just from the the above paragraph that the development of LPMS Regulations by employers will be something interesting. Especially when the employer attempts to take into account the best practice, the achievements of modern science and the recommendations of the International Labor Organization.
The following is the list of sections that should be contained in the LPMS Regulations of the employer.
Thus, according to paragraph 8 of the Draft Model Regulations on LPMS, the LPMS regulations taking into account the specifics of the employer’s activity shall include the following sections (subsections):
- a) policy of the employer in the field of labor protection;
- b) goals of the employer in the field of labor protection;
- c) ensuring the LPMS functioning (distribution of duties in the field of labor protection between officials of the employer);
- d) procedures aimed at achieving the goals of the employer in the field of labor protection (hereinafter – the ‘procedures’), including: the procedure for training workers on labor protection; the procedure for organizing and conducting an assessment of working conditions; professional risks management procedure; the procedure for organizing and conducting the monitoring of the health status of employees; the procedure for informing employees about working conditions at their workplaces, levels of professional risks, as well as the guarantees granted to them and compensations due to them; the procedure for ensuring optimal regimes of employees’ work and rest; the procedure for providing employees with personal and collective protective equipment, flushing and neutralizing agents; the procedure for providing workers with milk and other equivalent food stuffs, medical and preventive nutrition; procedures for ensuring the safe execution of contract work and supplying with safe products;
- e) planning measures for implementing the procedures;
- f) control over LPMS functioning and monitoring the implementation of the procedures;
- g) planning the improvements of LPMS functioning;
- h) responding to breakdowns, accidents and occupational diseases;
- i) managing the LPMS documents.
All of the above sections are further disclosed in separate chapters of the Draft Model Regulations on LPMS.
We will skip Chapter 2 which addresses the section “Policy of the employer in the field of labor protection” in view of its big volume, and consider Chapter 3 which addresses the section “Goals of the employer in the field of labor protection”. This Chapter of the Draft Model Regulations on LPMS contains only three paragraphs:
“Chapter 3. Goals of the employer in the field of labor protection;
- The main goals of the employer in the field of labor protection (hereinafter – the goals) are contained in the Labor Protection Policy and are achieved through the implementation by the employer of the procedures provided for in section V of this Model Regulation.
- The number of goals is determined by the specific features of the employer’s activities .
- The goals are formulated taking into account the need to assess their achievement, in particular, if possible, on the basis of measurable indicators.”
From the above Chapter it becomes clear that the model regulations on LPMS prescribe only the structure and basic provisions on LPMS, and the employer will have to “fill it up” himself, taking into account the specifics of his activity.
This is one of the main innovations of the Law in the field of labor safety and labor protection.
Another innovation concerns not all employers, but only those who carry out activities in the field of architecture, urban planning and construction, and act as general contractors at construction sites.
Thus, Article 184 of the Labor Code is supplemented by the new paragraph 6 of the following content:
“6. When work is performed on a construction site at the same time by several organizations (two or more), the general coordination of work for their compliance with labour safety and labour protection requirements in accordance with this Code and other regulatory legal acts of the RoK shall be carried out by the general contractor”.
Thus, enterprises acting as general contractors at construction sites have additional responsibility not only for their employees, but also for employees of other organizations working at the construction site.
Also, one can also refer to this block the changes made to the procedure for investigating industrial accidents, changes in the powers of state labour inspectors. However, on this note I would like to finish this article.
In conclusion, I would like to say that everyone differently perceives the changes made by the Law to the Labor Code. Some people say that they have not completely solved the problems of employees, others say that, on the contrary, the interests of employers are not respected. Is this right or wrong, only time will tell.
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