Early termination of an employment contract due to staff reduction

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Published: 01/26/2020

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Reducing the number of workers largely depends on the employer's decision. Labor legislation gives him the right to take initiative in this case. One of the manifestations of this initiative is that an employee who is being laid off will not be able to leave work early without the consent of the immediate manager of the organization or enterprise.

And the employee’s reasons may be quite valid. For example, he has found a new job and wants to immediately begin fulfilling his duties. To obtain management’s consent to early termination of an employment contract, the employee must write and submit an application.

However, the presence of such a document does not guarantee that the employee will get what he wants . The legislation gives the right to early care in accordance with Federal Law No. 197, however, it does not impose such an obligation on employers. That is, the decision in this case will depend on the goodwill of management.

• How to write a statement?
• Early dismissal procedure
• What payments are due?
• Controversial issues

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Resign voluntarily?

According to the Labor Code, when an employee is dismissed due to a reduction in the company's staff, the employee is given a notice of the upcoming reduction of position and dismissal of the employee no less than 2 months before the scheduled date of dismissal. But quite often a situation arises when an employee himself asks for an earlier termination of the employment contract. This could be due to a number of reasons. One of them is that a person has found a new job. Fearing that the vacancy will be filled by another applicant, he strives to begin his duties as soon as possible.

On what basis should an employee be dismissed in this case? After all, he expressed his own desire, at the same time this desire was caused by staff reduction. The basis for dismissal determines whether severance pay and average salary for the duration of employment will be paid, additional compensation calculated in proportion to the time not worked by the employee before the end of the layoff notice period.

The Constitution of the Russian Federation and the Labor Code guarantee all citizens the right to work. And where exactly, in what organization, company, firm the employee will exercise his right depends on him. Therefore, the employer cannot interfere with the employee’s desire to resign before the date of dismissal due to redundancy. An employee can submit a corresponding application at any time.

In this case, the employee must clearly understand that upon dismissal of his own free will, he does not lose the right to the guarantees and compensation that would be provided to him upon dismissal due to staff reduction. At the same time, this early dismissal is not caused by the employee’s “own desire”, but is a forced, “hidden” dismissal due to staff reduction.

Under what conditions can an employee be dismissed early?

According to the Labor Code, when an employee is dismissed due to a reduction in the company's staff, the employee is given a notice of the upcoming reduction of position and dismissal of the employee no less than 2 months before the scheduled date of dismissal. But quite often a situation arises when an employee himself asks for an earlier termination of the employment contract.

On what basis should an employee be dismissed in this case? After all, he expressed his own desire, at the same time this desire was caused by staff reduction. The basis for dismissal determines whether severance pay and average salary for the duration of employment will be paid, additional compensation calculated in proportion to the time not worked by the employee before the end of the layoff notice period.

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The Constitution of the Russian Federation and the Labor Code guarantee all citizens the right to work. And where exactly, in what organization, company, firm the employee will exercise his right depends on him. Therefore, the employer cannot interfere with the employee’s desire to resign before the date of dismissal due to redundancy. An employee can submit a corresponding application at any time.

In this case, the employee must clearly understand that upon dismissal of his own free will, he does not lose the right to the guarantees and compensation that would be provided to him upon dismissal due to staff reduction. At the same time, this early dismissal is not caused by the employee’s “own desire”, but is a forced, “hidden” dismissal due to staff reduction.

In the text of the notice of dismissal or in another document, the employer has the right to offer the employee to terminate the employment contract before the two-month warning period expires (part three of Article 180 of the Labor Code of the Russian Federation). Early dismissal is possible if two conditions are met: – the reduction is carried out in accordance with the procedure established by law; – the employee agreed to resign early with the payment of additional compensation.

Legality of reduction. The Labor Code regulates in detail how to carry out reductions. Thus, the decision to reduce staff must be notified to the employment service and the trade union (if any) no later than two months in advance, and if mass layoffs are planned - no later than three months before the start of termination of employment contracts (part one of Article 82 of the Labor Code of the Russian Federation, Art.

Staff reductions must be real. It is impossible, under the guise of organizational measures, to pursue the goal of dismissing a specific employee.

Employee consent. The employee must give written consent to early dismissal. This may be an inscription on a notice or a separate document. To prevent the employee from making mistakes, offer to write a statement indicating the grounds for dismissal, details of the notice of reduction and the date on which he agrees to resign early (sample below).

The law does not prohibit an employee from revoking consent to early dismissal. However, the employer is not obliged to follow his lead. Revocation of consent is not significant, since the employee is dismissed due to staff reduction, and not at his own request. Therefore, the employer has the right not to take into account the change in the employee’s position and dismiss him on the agreed date. This is confirmed by judicial practice (decision of the Moscow City Court dated May 26, 2011 in case No. 33-15827).

Sometimes the employee himself demands to be fired early. If we interpret the Labor Code literally, the employer is not obliged to do this (part three of Article 180 of the Labor Code of the Russian Federation). Until the notice period for layoffs has expired, the employee has the right to resign at his own request (Clause 3, Part 1, Article 77 of the Labor Code of the Russian Federation). But then he will lose the right to severance pay and average earnings for the period of employment (Art.

The need to reduce staff and the number of employees can arise at any enterprise, regardless of the type of activity, form of ownership, profit and size of the authorized capital.

Reasons for liquidation may be different:

• due to insufficient funding;
• enterprise reorganization;
• change of owner;
• change in the internal structure of the company, etc.

We invite you to read: Appealing (challenging) a disciplinary sanction in court

If such a situation arises, the employer is obliged to carry out the procedure for dismissing employees in accordance with legal requirements. After all, it is failure to comply with the procedure for terminating an employment contract when reducing staff that is the basis for reinstating employees in the workplace. In this case, the employer is subject to administrative liability and penalties.

When making a decision to reduce staff, the director of the enterprise is obliged to notify employees of the upcoming dismissal 2 months in advance. For this purpose, a personal order is issued and brought to the attention of employees against signature. According to Article No. 82 of the Labor Code of the Russian Federation, citizens can independently express a desire to terminate an employment contract early. To do this, you must follow the required dismissal procedure:

1. The employee draws up an application addressed to the director;
2. The text of the document indicates the reason for dismissal (at one’s own request);
3. After signing the application, the employee must work for 2 weeks.

On the day of dismissal, the employee must be paid all required compensation, namely: wages for the time actually worked;

• monetary compensation for vacation not taken (if any);
• entrance allowance in the amount of the average monthly salary, which is calculated in proportion to the remaining working days before the reduction.

The employee is given a work book with the appropriate note: “early dismissed at his own request due to staff reduction.”

Sample application

The resignation letter is drawn up in any order. The document test requires the following:

• initials of the director of the enterprise, name of the company;
• Full name of the employee, position;
• reason for termination of the employment contract (at one’s own request);
• date of dismissal;
• indicate the amount of payments due;
• date of writing the application, signature.

The two-week work period begins to count from the next working day after the application is signed by the general director of the LLC.

Early termination of the contract due to staff reduction

The Labor Code of the Russian Federation makes it possible to dismiss a redundant employee before the deadline that determines the notification of early dismissal. According to Part 5 of Art. 180, an employer may terminate an employment contract with an employee before the expiration of the term with his written consent.

Thus, according to this article, the right to early termination of the contract is granted to the employer, and not to the employee, although the employer can exercise it only with the consent of the employee. That is, initially it is the employer who decides on the advisability of working out the entire period indicated in the notification.

But this provision cannot prohibit an employee from initiating the process of terminating an employment contract early. Moreover, the Labor Code does not force the employer to necessarily satisfy this request of the employee. Therefore, in order to terminate the contract for staff reduction early, both parties must be interested in this. And the employer comes first, since it largely depends on him whether this reduction will occur or not, and the employee retains the right to agree or refuse this proposal.

Nuances and judicial practice

The law does not specify in what specific period early dismissal is possible. Early reduction can be carried out on any day that is located within the period after the warning and before the date of dismissal. The main nuance is compliance with all preliminary stages.

There are many cases in judicial practice where early layoffs were carried out, but there were violations. Examples of common errors:

• there is no complete documentation;
• the employee did not refuse any available vacancies or were not offered them;
• no notification to the employee in a timely format;
• there is no new staffing table developed before the employee is laid off;
• some of the funds have not been paid, including additional compensation;
• various organizations, including the trade union, were not notified in a timely manner.

In all these cases, the court may declare the procedure illegal and cancel it, which will lead to the reinstatement of the employee to his previous position.

Early dismissal of an employee is possible at any time before the expiration of the notice period. An entry is made in the labor report indicating clause 2, part 1, art. 81 Labor Code of the Russian Federation. The early reduction itself is regulated by Article 180. An important point is the consent of all parties to the process to terminate the contract early. In this case, the employee will receive all payments that are established by law for those being laid off.

Application for early termination of an employment contract due to staff reduction

An employee can also come up with an initiative for early termination of the contract in compliance with all possible legal guarantees provided for in Article 180 of the Labor Code. Whether to agree to this proposal is the prerogative of the employer. In this case, in order to make the right decision to lay off an employee, a large role is given to the application for early termination of the contract.

To dismiss an employee not on the basis of his own desire, but due to staff reduction, the application must be written correctly. Its text must exclude double interpretation. The request must be stated in detail and clearly.

It is necessary to indicate that the employee is familiar with the beginning of the procedure for his dismissal in connection with the upcoming reduction in staff, indicating the date specified for this. It is necessary to indicate whether he was offered vacancies, and if so, which ones. It is imperative to indicate that he wants to resign before the expiration of the appointed dismissal period due to staff reduction, and that he is claiming the compensation payments due. In this case, dismissal is impossible without the consent of the employer.

How to make an entry in a work book and personal card

The work book is filled out in accordance with the Rules for maintaining and storing work books, approved by Decree of the Government of the Russian Federation of April 16, 2003 No. 225 and the Instructions approved by Resolution of the Ministry of Labor of Russia of October 10, 2003 No. 69. Entry in the work book of an employee dismissed early due to staff reduction , will not differ from the entries in the work books of employees dismissed on the same basis within the period provided for by the notice (sample below).

We suggest you familiarize yourself with How to correctly draw up an act on the transfer of affairs by the chief accountant upon his dismissal

The entry in the employee’s personal card will also be standard (sample below). The work book and personal card do not include information that the dismissal was early.

Normative base

Important Takeaways

1. It is possible to dismiss an employee due to staff reduction before the two-month notice period expires if the reduction is carried out legally and the employee agreed to early dismissal.
2. The order for early dismissal indicates that it is due to reduction. The basis refers, among other things, to the details of the employee’s consent. 3. In case of early dismissal, the employee is paid additional compensation in the amount of average earnings, calculated in proportion to the time remaining until the end of the notice period, and other due payments. Star for correct answer

Wrong

Right!

In what form must an employee express consent to early dismissal due to staff reduction:

orally;

in writing;

Both oral and written forms are acceptable.

Payments upon dismissal due to reduction before the expiration of the reduction period

It is clear that it is more economically profitable for the employer to fire workers during the layoff period at their own request. In this case, he should not make compensation payments. Some dishonest employers even use threats and methods of psychological pressure to force employees to quit on their own.

p style=”text-align: left;”>If an employee quits early, then the following payments are provided for him upon dismissal due to reduction before the expiration of the reduction period, which are paid by the employer:

• wages for the time actually worked in the month of dismissal;
• compensation for all vacations that the employee did not use;
• severance pay equal to the average monthly salary (only if early dismissal is initiated by the employer);
• additional compensation equal to the average earnings for the time remaining before reaching the appointed date of dismissal due to staff reduction (if this is specified in the collective agreement);
• for the period of employment - average monthly earnings, but this period should not exceed two (in some cases, by decision of the employment center - three) months from the date of dismissal.

Entitled payments

All payments are made in full, including compensation for unworked time. The payment is calculated for the period from the moment the application (agreement) is signed until the original date in the redundancy order.

In addition to compensation, the employee has the right to all redundancy payments, Part 1 of Article 178 of the Labor Code, including:

• severance pay in the amount of average earnings;
• compensation for a period of employment not exceeding two months;
• If registered within 14 days at the labor exchange, compensation for the third month is due.

When an early layoff is made, the employee does not lose due payments, but increases the amount by an additional payment. Accrued funds are paid on the last day of employment, Article 140 of the Labor Code.

Going to court

There are often cases when an employee, succumbing to pressure from the employer, during a period of staff reduction, writes a statement with a request to dismiss him “at his own request.” Then he can apply to the court to change the wording of the reasons for dismissal and to recover the payments due to him, claiming that the administration forced him to write a statement. In this case, it is the employee who must prove that coercion on the part of the employer took place.

When considering a claim, the court examines:

• the reasons that prompted the employee to write a statement;
• circumstances of writing the application;
• the employee's true intention;
• the text of the application, the mandatory presence of the necessary details (employee signature, date of writing, date of receipt of the application by the employer, resolution of the head of the enterprise).

If in court the employee proves that this statement was written by him under pressure from the employer and does not correspond to his wishes, then the termination of the contract will be considered illegal. In such a case, the employer is obliged to change the wording of the grounds for dismissal, as well as make all required payments, including compensation for moral damages and expenses caused by participation in court hearings. It is possible for the court to make a decision to reinstate the employee to his position and pay for forced absence.

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