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6Information for citation:
Ofman, E. M. (2022) Invalidity of Employment Contracts: Experience of Legal Regulation in Eurasian Economic Union Member States. European and Asian Law Review. 5 (2), 30-40. DOI: 10.34076/27821668 2022 5 2 30.
UDC 34.048, 349.222.2
BISAC LAW054000 / Labor & Employment
DOI: 10.34076/27821668_2022_5_2_30
Research Article
INVALIDITY OF EMPLOYMENT CONTRACTS: EXPERIENCE OF LEGAL REGULATION IN EURASIAN ECONOMIC UNION MEMBER STATES
ELENA M. OFMAN
South Ural State University ORCID ID: 0000-0001-5456-1557
The article raises the problem of necessity and expediency of reception into the Russian labor legislation of civil legal construction of invalidity of legal transactions, evaluates the experience of member states of the Eurasian Economic Union on the implementation of legal regulation of invalidity of employment contracts on certain grounds. Both general scientific (analysis, synthesis, deduction, induction) and special methods of legal research (comparative method) are used in the study. Based on the analysis of the Labor Codes of the Republic of Belarus, the Kyrgyz Republic, the Republic of Kazakhstan and the analysis of materials of judicial law enforcement practice of Russia each condition of invalidity of the employment contract was investigated and the effectiveness of these conditions and the identified grounds of invalidity of the employment contract on the sphere of labor relations in Russia was evaluated. Enshrining norms on the invalidity of an employment contract in the LC RF are inexpedient, the legislator has developed adequate ways and means to overcome defects of form, content and subject composition of labor legal relations. Defect of subject composition of an employment contract, defect in the content of the employment contract and its (contract) form, as a rule, do not entail the recognition of this contract as invalid. Failure to comply with the will of the parties of labor legal relations in the process of its emergence, change and termination should be a subject of legal regulation at the level of a codified act. It seems necessary to fix at the level of the Labor Code of the Russian Federation norms on the ratio of will and expression of will; on the primacy of expression of will over the will. In ideal legal relations, the will and expression of will must coincide. Establishment in the law of the factors that influenced the process of evolution of will and deformed it is necessary only in case of defective development of one or another model of exercising subjective rights and / or performance of duties. The article makes proposals to adjust the norms of the current labor law, aimed at eliminating the flaws in the flawed nature of certain conditions of the employment contract identified by the courts.
Key words: labor contract, invalidity of the labor contract, mechanism for exercising rights, vice of the will of the subjects of labor relations
Introduction
The study of volitional aspect of the mechanism of exercising subjective rights and duties of subjects of labor legal relations (employee and employer) inevitably raises the problem of analyzing the feasibility and effectiveness of the civil legislation on the invalidity of the deal to labor legal relations with defects
Copyright© 2022. The Authors. Published by Ural State Law University named after V. F. Yakovlev. This is an open access article distributed under the CC BY-NC 4.0. license http://creativecommons.org//license/by-nc/4.0/
of will (and these defects are possible at different stages of this legal relationship: the emergence, its existence, change and termination). The Russian legislator remains 'deliberately silent' on this problem, while the courts, taking advantage of the legal gap, by their decisions actively recognize the actions of employers (and only employers!) as illegal, using the concepts of 'defect/defect of will', 'misleading the employee'; 'fraud'; 'threat from the employer'.
In order to make a logical understanding of the correctness of the normative consolidation of the invalidity of an employment contract, the article draws attention to the existing in the science of civil law classification of deals on the grounds of invalidity (depending on which of the features of the deal was 'flawed'): deals with content flaws; deals with flaws in the subject composition; deals with flaws of will and expression of will; deals with flaws in form. Designated deals are largely similar in the Civil Codes of the analyzed states (Kazakhstan, Belarus, Kyrgyzstan, the Russian Federation). In this regard, it seems appropriate to analyze each condition of invalidity of the deal and apply it to the sphere of labor relations in order to identify the need to enshrine norms on invalidity of the employment contract in a codified act.
Materials and Methods
The study of the problem of the reception of civil law norms into labor law became possible by using both general scientific (analysis, synthesis, deduction, induction) and special legal research methods (comparativist method). As a scientific basis the works of Russian and foreign scholars in the field of labor law, evaluating the correctness of the application of wording by the legislator in the reception of civil law wording in the labor law, proposing changes in the current labor legislation were used. As empirical material was used Russian judicial practice regarding the identification of defects in the form, content, subject composition and volitional aspect of employment legal relations.
Results
On the one hand, in their decisions, the courts indicate that 'labor legislation of the Russian Federation does not contain a mechanism for invalidating an employment contract, labor relations are not covered by the Civil Code of the Russian Federation (hereinafter - CC RF)1', labor legislation does not provide grounds for considering an employment contract as a transaction that can be declared invalid'2, on the other hand, - acts of courts contain direct wording on 'sufficiency of the totality of the examined conditions of the employment contract'. Such a 'deal' is, for example, 'the inclusion of compensation for termination of the employment contract by agreement of the parties in the employment contract concluded with the executive employee after the initiation of the bankruptcy case'. In this case, 'the parties acted intentionally with a view to causing property damage to the interests of creditors because, acting reasonably and in good faith, they could and, based on the circumstances of the case, should have anticipated the possible transition to bankruptcy proceedings and the resultant dismissal of employees by the bankruptcy trustee'3.
In another case, a clause in an employment contract in terms of setting the salary of an employee above a certain amount was invalidated and the consequences of the invalidity of the deal were applied4.
Another example of how the Supreme Court of the Russian Federation (hereinafter - the RF Supreme Court) recognized a 'suspicious deal' and applied the consequences of invalidity to it is the case of the clause regarding the substantial increase of the employee's salary (from 30 000 rubles to 3 000 000 rubles) included into an employment contract within the suspicious clause 1 of Article 61.2 of the Bankruptcy Law. The court found that the employee's qualifications had not been changed, the job duties and working
1 Hereinafter all references to Russian normative acts and court practice are given according to the legal reference system 'KonsultantPlus'. Available at: http://www.consultant.ru.
2 Determination of the Judicial Collegium for Civil Cases of the Supreme Court of the Russian Federation of April 8, 2019, case No. 81-KG18-27; Determination of the Supreme Court of the Russian Federation of December 14, 2012, case No. 5-KG12-61; Determination of the Eighth Cassation Court of General Jurisdiction of December 10, 2020 No. 88-18029/2020 in case No. 2-158/2020; Determination of the First Cassation Court of General Jurisdiction of December 14, 2020 No. 8827162/2020.
3 Determination of the Supreme Court of the Russian Federation of December 31, 2022, case No. 308-ES21-1139(5).
4 Determination of the Supreme Court of the Russian Federation of January 28, 2020, case No. 309-ES18-17796(2); Determination of the Supreme Court of the Russian Federation of October 28, 2019, case No. 305-ES19-1960.
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conditions had not been adjusted, and additional duties and responsibilities had not been assigned, so the employee's pay had been unreasonably increased in anticipation of bankruptcy. Moreover, the employee's accrued wages differed from the price and conditions at which similar deals were made under the same circumstances, including wages for similar positions in the marketplace, and the compensation provided to the employee was not commensurate with the scope of the job functions he performed. As a result, the courts decided that as a result of the transaction on the inclusion in the employment contract of a clause on a significant increase in the employee's salary, the bankruptcy estate was reduced, from which the claims of bankruptcy creditors would be settled, while the disputed salary was not essentially aimed at compensating the employee for the costs associated with the performance of his employment duties. Applying the consequences of the invalidity of the deal, the court in its decision determined the 'fair amount' of this employee's salary, which amounted to 450,000 rubles5.
Of scientific and practical interest are a number of court decisions: to invalidate the additional agreement to the employment contract to change its term (the contract was changed from open-ended to fixed-term); to invalidate the agreement to terminate the employment contract to pay severance pay of 3,000,000 rubles to the employee when the employment contract is terminated by agreement of the parties (paragraph 1 of part 1 of Article 77 of the Labor Code of the Russian Federation, hereinafter - LC RF)6; to recognize the repeated dismissal of the employee and the repeated payment of compensation to him in connection with this dismissal as unlawful in connection with the discretion of this 'deal' signs of interest, its commission with the purpose of violating the rights of creditors (consequences of invalidity of the deal have been applied)7.
The issue of invalidity of the employment contract does not leave the attention of scientists, who in their works come to diametrically opposite conclusions: from a complete rejection of the idea of including this civilistic structure in the Russian labor legislation to the development of provisions aimed at the appropriate adjustment of the LC RF.
Professor S. Yu. Golovina believes that 'to address the issue of the consequences of violations of the rules of the employment contract is sufficient for paragraph 11 of Article 77 of the Labor Code of the Russian Federation, which provides an appropriate basis for termination of the employment contract, and to neutralize the conditions of the employment contract, worsening the position of the employee, there is part 2 of Article 9 of the Labor Code of the RF' (Golovina, 2017: 13).
Proponents of the introduction into the labor legislation of the structure of 'invalidity of a labor contract' also do not agree in one opinion. Some argue about the need for 'a fundamental adaptation of the construction of invalidity of an employment contract to the specifics of labor relations, reasonable harmonization with the method of labor regulation - both on the grounds of invalidity, on the subjects, and on the content of legal consequences' (Tarusina, 2021: 50; Syrovatskaya & Idrisova, 1990: 55-56).
Others speak of the necessity and expediency of adapting the norms of civil law to labor relations (analogy of law) to overcome the 'legal vacuum' in addressing, in particular, issues of applying the consequences of invalidity of 'labor law deals' (Brilliantova & Arkhipov, 2007: 69-70).
Professors A. M. Lushnikov and M. V. Lushnikova clearly note that the construction of restitution is not applicable to labor relations in its pure form. They reason: 'Most likely there should be only one possible legal consequence - it is the replacement of invalid conditions of the labor contract with conditions that comply with current labor legislation or collective agreements and treaties', but taking into account that 'the parties of the labor contract have not reached an agreement on the issue of bringing the conditions of labor contracts into compliance with current legislation'. Legal consequences should be differentiated: from the recognition of conditions as invalid (analog of the nullity of the deal) to the recognition of them as legal (analog of the voidability of the deal), but with specific sectoral features. The institute of invalidity of employment contracts should be applied to imaginary and pretense deals in terms of application of legal consequences (Lushnikov & Lushnikova, 2009: 406, 408, 416).
5 Ruling of the Arbitration Court of the Moscow District of May 5, 2021, case No. F05-20807/2018; Ruling of the Supreme Court of the Russian Federation of July 09,2021, case No. 305-ES18-25788(5); Ruling of the Supreme Court of the Russian Federation of May 20,2019, case No. 308-ES19-6122 in Case No. A63-3630/2017.
6 Determination of the First Court of Cassation of General Jurisdiction of December 21, 2021, case No. 88-31838/2021.
7 Determination of the First Court of Cassation of General Jurisdiction of March 1, 2021, case No. 88-3545/2021.
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The fourth scientists consider it necessary to make 'some improvements' in labor legislation, allowing to qualify the employment contract as invalid: to supplement Article 391 of the LC RF with provisions on the right of the employer to apply to court with a claim for invalidation of the employment contract; to include in Article 67 of the LC RF a rule about the circle of persons entitled to sign the employment contract; to differentiate the legal consequences of invalidity of the employment contract depending on the fault (its degree) of the employee and employer (Urakova, 2011: 32).
The above-mentioned ideas of scientists, heterogeneous judicial practice and silence of the legislator force to pay attention to the achievements of the labor legislation of EEC member countries, which were not afraid to lose sectoral independence, authenticity and included provisions on invalidity of employment contracts and their terms in the texts of their codified acts - the Labor Code of the Republic of Belarus (hereinafter - LC RB) (Articles 22-23). Articles 22-23), the Labor Code of the Kyrgyz Republic (hereinafter - LC KR) (Articles 60-61), the Labor Code of the Republic of Kazakhstan (hereinafter - LC RK) (part 2 of Article 10, part 4 of Article 33). No less interesting is the analysis of these norms in order to clarify the completeness of legal regulation of the issue of invalidity of a labor contract, its terms and conditions, as well as the formation of proposals aimed at adjusting the current labor legislation of the Russian Federation on this issue.
In general, the Labor Code of the Republic of Belarus and the Labor Code of the Kyrgyz Republic contain similar grounds for invalidation of the employment contract and similar norms on invalidation of certain conditions of the employment contract. So, the employment contract is invalid (the LC of KR specifies that by the court) in case of its conclusion under the influence of deception, violence, threat, as well as under extremely unfavorable conditions for the employee due to concurrence of severe circumstances; without the intention to create legal consequences (imaginary employment contract); with a person declared incapable due to mental illness or dementia. But there is a non-identity of the grounds for invalidation of the employment contract: the Labor Code of the Kyrgyz Republic defines that the contract may be considered invalid if it is concluded with a person who is unable to understand the meaning of his actions, while the Labor Code of the Republic of Belarus links invalidity of the employment contract with the fact of its conclusion with a person under 14 years old, with a person who is 14, but without a written consent of one of the parents (adoptive parent, guardian). Legal consequences of invalidation of an employment contract in the Labor Code of the Republic of Kazakhstan and the Labor Code of the Kyrgyz Republic are the same: their recognition as such does not entail the loss of the employee's right to guarantees, compensation and benefits (the right to vacation, compensation for unused vacation days; inclusion of the period worked in the insurance period (the Kyrgyz legislator specifies). The Labor Code of the Republic of Belarus does not regulate this issue.
The invalidity of certain terms of the employment contract in the case of worsening the legal status of employees as compared to the law, including in the case of their discriminatory nature, does not entail the invalidity of the entire employment contract - this is the position of all three listed Labor Codes. Interestingly, the codified acts link the defect in the content of the employment contract to its 'individual conditions', and not to the employment contract itself.
It may be noted that the Labor Code of the Republic of Belarus and the Labor Code of the Kyrgyz Republic list an incomplete set of grounds for invalidating a transaction, compared to the civil law, depending on the subject composition of the labor legal relations, the content of the employment contract, defects of will and expression of will (does not contain such cases for invalidation of the employment contract as sham transactions, does not specify delusion as a ground for invalidating the employment contract). The disadvantages of the reception in the labor legislation of both states of civil law constructions on the invalidity of civil law transactions without taking into account the specifics of labor legal relations are indicated by scientists: this is the problematic application of certain grounds for invalidation of an employment contract, and the lack of legislative grounds for invalidity of an employment contract; and the undeveloped rules on the procedure for invalidating an employment contract; and the lack of rules on the period of appeal to court, on the moment, at which an employment contract or its terms are declared invalid (Tarasevich, 2009: 291-292; Tarasevich, 2015: 52; Ramankulov, 2017: 158).
On the one hand, 'all this prevents the achievement of consistency of norms of the relevant institutions of labor law, the formation of a uniform law enforcement practice' (Tarasevich, 2009: 290). On the other hand, it will allow the Russian legislator to take into account the identified shortcomings of legal regulation
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and create an effective mechanism for legal regulation of the institute 'Employment Contract' in the LC RF (if not to exclude, then at least to minimize the conclusion, modification and termination of contracts with defects of will, as well as to provide the courts with intrumentation for qualifying actions as an abuse of right by the employee and the employer).
Discussion
A defect in the subject composition as a condition for invalidating of an employment contract invalid
A defective subject composition implies that the transaction was made by a person whose actions do not entail legal consequences: the subject is improper (Ablyatipova & Ryukhtina, 2020: 111). The LC of the RB includes persons considered legally incompetent, persons under 14 years of age and persons aged 14 to 16 years without the written consent of a parent (adoptive parent, guardian) (Article 22), and the LC of the KR includes legally incompetent persons and persons who are unable to understand the meaning of their actions (Article 60).
As a general rule, Russian labor legislation does not establish a requirement for an employee to have full legal capacity as one of the criteria for the emergence of labor legal personality. Exceptions are cases stipulated by the LC RF and other federal laws and normative legal acts containing norms of labor law.
In the practice of the Supreme Court of the Russian Federation there are two cases of the greatest interest in the issue of the legality and possibility of incapacitated persons to act as employees; indirectly, one of the highest courts of the Russian Federation addresses the question of the validity of an employment contract concluded by incapacitated persons. The Court has established two positions, according to which:
1. An incapacitated person has the right to be a party to an employment legal relationship, and specifics are stipulated only for incapacitated persons who act as employers. The legislator in Article 20 of the LC RF explicitly establishes only one restriction for acquiring the status of an employee - the age limit. Moreover, according to the general provisions of the legislation the employer at the conclusion of an employment contract does not have the right to require from the applicant for work documents about his state of health other than those listed in Article 65 of the Labor Code of the RF8.
2. Termination of the employment contract at the initiative of the employee (incapacitated person) is legal only if the employer complies with a number of rules (procedures), otherwise the dismissal may be declared illegal. The employer (according to the logic of the court) before the end of the dismissal procedure must find out a number of legally significant circumstances: whether the actions of the employee when heshe submitted the application for voluntary resignation based on the individual-psychological characteristics of the person were voluntary and conscious; whether the employee understood the consequences of writing such a statement; whether the previously submitted application for voluntary resignation was withdrawn, including the time and status of the person, to whom the withdrawal was sent9.
In order to create an effective mechanism for legal regulation and a mechanism for exercising subjective rights, to prevent vicious procedures for concluding and terminating an employment contract with a legally incapacitated person, it seems necessary to include in the LC RF the following norms: an employment contract with this category of workers may be concluded with the prior consent of their guardians, taking into account the opinion of such a citizen. In addition, it is necessary to establish in the LC RF the obligation of a legally incapable person (his legal representative) to inform the employer when concluding an employment contract about the individual and psychological features of his personality, about his special status (about the status of the person being represented). These amendments to labor legislation will eliminate the defects associated with the formation of the will and its implementation by a legally incapable employee and his representative, as well as prevent the abuse of the right of these persons, from the stage of concluding an employment contract to the stage of its termination.
Analysis of legislation and practice of its application allows us to assert that labor relations with the participation on the side of an employee of an incapacitated person, a person limited in legal capacity,
8 Ruling of the Judicial Board for Civil Cases of the Supreme Court of the Russian Federation of April 23, 2010, case No. 13-B10-2.
9 Determination of the Judicial Board for Civil Cases of the Supreme Court of the Russian Federation of April 29, 2019, case No. 46-KG19-8.
underage workers are not considered invalid because of the viciousness of the subject composition of such legal relations. The LC RF has developed adequate, peculiar only to this area of law, rules that entail various favorable legal consequences for the employee as a weak party of legal relations: the conclusion of a labor contract is qualified by the courts as a lawful action, and termination of the contract is allowed only in cases expressly provided for by law (Article 84 of the LC RF). At the same time the termination of the employment relationship is admissible only if the employer is unable to transfer the employee with his/her written consent to another available job (part 2 of Article 84 of the Labor Code of the Russian Federation). Moreover, the Code states that if the violation of the rules for concluding an employment contract is not the employee's fault, he/she must be paid severance pay in the amount of the average monthly earnings. If the violation of the above mentioned rules for concluding the employment contract was caused by the employee, the employer is not obliged to offer him/her another job and to pay the severance pay (Article 84.3 of the Russian Labor Code).
The admission of an employee to work by an unauthorized person (i.e. a defect in the employment contract on the part of the employer) also does not entail the invalidity of the work performed. Of course, an employment relationship will not arise (although such a likelihood of a development of events is laid down in Article 67.1 of the RF Labor Code), but even in this case the employer still has an obligation to pay the individual for the time actually worked or the work performed. Another example: the LC RF expressly states that if an individual carries out entrepreneurial activity without state registration and (or) licensing, in violation of the requirements of the law, then when entering into an employment relationship with employees for the purpose of carrying out this activity he is not exempt from the obligations imposed by the LC RF on employers-individual entrepreneurs (paragraph 1 of Article 5).
Defective content of an employment contract as a condition for of its invalidation
The content of the deal is the totality of its terms, and if the deal was made with the discrepancy of its terms to the requirements of the law, it can be declared invalid.
The defect in the content of an employment contract in labor legislation has its own name - 'improper execution of an employment contract', which is understood as the absence of those information and (or) conditions, which are provided for by parts 1 and 2 of Article 57 of the Labor Code of the RF, as well as the inclusion of conditions that limit the rights or reduce the level of guarantees for employees compared with those established by labor legislation and other normative legal acts containing norms of labor law (part 2 of Article 9 of the LC of the RF).
The Plenum of the Supreme Court of the Russian Federation in its Resolution of December 23, 2021 No. 45 indicates: 'Failure to include in an employment contract conditions on labor rights and obligations stipulated by a collective agreement, agreements, local normative acts (for example, a specific date of payment of wages) does not form an objective aspect of an administrative offense under part 4 of Article 5.27 of the Code of Administrative Offences of the Russian Federation, since the employer has no statutory obligation to fix the relevant provisions in the employment contract' (par. 4 item 10).
It is necessary to agree with the opinion of professor E. B. Hohlov that 'employment contracts may exist without agreeing in them all mandatory conditions (such contract E. B. Hohlov calls 'an employment contract with indefinite working conditions')... One may consider that if the employee has agreed with the employer at least one condition (as a rule, it is a condition of the employment function), then the employment contract is already concluded, and all its other conditions may be filled in the future, both in the contractual and judicial order' (Predko & Hohlov, 2000: 67). It is interesting to note that another representative of the St. Petersburg school of labor law A. V. Zavgorodniy (Zavgorodniy, 2013: 54) believes that when concluding an employment contract and before the actual admission of an employee to work the parties to legal relations (the employee and the employer) must reach an agreement on at least two mandatory conditions of the employment contract - on the employee's employment function and on his/her salary.
I suppose that the more correct position is that an 'employment contract with indefinite terms' is considered concluded if the parties agree on at least one (and any!) of its terms. Indirectly this is indicated by the LC RF, in part 3 of Article 19.1 establishing the presumption of the existence of labor relations, and item 4 of paragraph 24 of the Resolution of the Plenum of the Supreme Soviet of the RF of
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May 29, 2018 No. 15. Significant role in this ruling is played by point 23, which restores the gap in the legal regulation in terms of determining the amount of an employee's wages in the absence of written evidence from the employer confirming the amount of the employee's wages. In such a case the court has the right to determine its amount based on the employee's regular remuneration of his/her qualifications in the area, and if it is impossible to establish the amount of such remuneration - based on the minimum wage in the subject of the Russian Federation. The author of this article considers this legal provision to be very progressive and consistent with the goals and objectives of labor law, because it is aimed at preventing the abuse of rights by employees who agree to 'gray' wages, and at the same time to prevent offenses by employers who want to set the wage in the contract at the minimum wage.
Thus, the invalidity of an employment contract with defective content is impossible, we can only talk about the nullity of a particular provision of the employment contract, and that is not always the case. In some cases, courts qualify defective terms of an employment contract as contestable, for example, the amount of an employee's severance pay upon termination of an employment contract the court considered as unreasonably excessive and determined by its decision the 'fair amount' of the employee's salary, which was 450 000 rubles, having calculated the severance pay from it10.
Nevertheless, I believe that the LC RF has developed a mechanism aimed at overcoming the defect in the content of the employment contract:
1) failure to include in the contract any information and conditions from among those provided by parts 1 and 2 of Article 57 of the Code is not the basis for recognizing it unconcluded or its termination; the employment contract must be supplemented with missing information and (or) conditions (part 3 of Article 57),
2) conditions included in the text of the employment contract, which limit or reduce the level of guarantees of emploees in comparison with the labor legislation, are not subject to application (part 2 of Article 9). In this case flawed conditions of an employment contract must be 'replaced' by conditions established by current normative legal acts containing norms of labor law.
Today we can also identify another defect in the content of the employment contract - deliberate silence of the employer on issues delegated to him by the legislator, subject to regulation at the level of local normative acts, collective or employment contracts (for example, the issue of increasing the real content of wages). Adjustment, modification of erroneous condition of the employment contract is possible by agreement of the parties to the employment contract, and in case of impossibility to achieve balance between the parties, absence of common opinion in solving the identified problem - by appeal to jurisdictional authorities. It seems that the pre-trial stage of coordinating the will of the parties is not mandatory, the employee or the employer have the right to apply directly to the competent authority in order to recognize certain conditions of the employment contract as illegal, limiting or reducing the level of his guarantees in comparison with the labor law. The judicial practice knows a sufficient number of examples of such a variant of elimination of the flaw in the content of the employment contract: it is a challenge by employers of the grounds and amounts of the so-called 'golden parachutes' when terminating the employment contract with management employees (especially often - in bankruptcy of the employer), and the requirement of employees to fulfill the employers' obligation to index wages. By the way, in the absence of a clear legislative position on the mechanism of wages indexation in the absence of local normative acts or a collective agreement of an employer the courts usually calculate wages by increasing them by the growth of consumer prices in the corresponding subject of the Russian Federation. At the same time, some courts analyze the absolute amount of wages paid to the employee (in annual terms), and if it is established that it has decreased rather than increased, then the employer's obligation to index wages will be considered not fulfilled11.
Comprehension of the defect in the content of the employment contract has led to another conclusion: since the employer has power over the employee, the conditions in the employment contract that do not comply with labor law are associated not with a defect in the content of this contract, but with a defect in the will of the parties (or one party) of employment legal relations, since the employee's refusal to enter into an employment contract on the conditions initiated by the employer is due not only to
10 Determination of the First Court of Cassation of General Jurisdiction of March 1, 2021, case No. 88-3545/2021.
11 Determination of the Third Court of Common Pleas, October 13, 2021, case No. 88-15878/2021.
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economic, but also organizational dependence on the employer. About the defect of will of the parties to labor legal relations and its legal consequences (nullity or voidability) will be discussed below.
Defective form of an employment contract as a condition for declaring it invalid
According to civil law, a defect in the form of the deal means that the parties have not complied with the written (simple, notarial) form of the deal established by the legislator. An employment contract is concluded in writing, in some cases it is required to be registered with local authorities (Article 303 of the Labor Code of the Russian Federation). Based on Federal Law as of November 22, 2021 № 377-FZ 'On Amendments to the Labor Code of the Russian Federation' employers may handle HR documents in electronic form; uniform requirements for the composition and format of electronic documents shall be set by the Ministry of Labor of Russia, Roskomnadzor and Rosarchive (par. 13 clause 1 Article 1 of this Federal Law).
The duty of proper registration of labor relations is imposed on the employer, evasion of execution of which forms an administrative offense under part 4 of Article 5.27 of the Code of Administrative Offences of the Russian Federation. The Plenum of the RF Supreme Court in its resolution of December 23, 2021, № 45 contains the provision that this offense is not continuous and will be completed after the expiry of paragraph 2 of Article 67 of the Labor Code three working days or from the date of the actual admission of the employee to work.
Interesting is the correlation of legal consequences of failure to comply with a simple written form of a deal under the civil legislation of the Russian Federation and the labor legislation of the Russian Federation. Thus, Article 162 of the Civil Code of the Russian Federation establishes that failure to comply with the simple written form of the deal deprives the parties to a dispute to refer to witnesses and other evidence to confirm the deal and its terms; failure to comply with the specified form of the deal leads to its invalidity (in cases expressly specified in the law). Evidence of the existence of an employment relationship between the parties, who have not signed an employment contract, is any factual data that allows to establish the fact of the existence of an employment relationship between the employee and the employer: personal performance of the employee for a fee, including remotely, in the interests, under the direction and control of the employer, as well as other circumstances relevant for the proper resolution of the case, including the permanent nature of the existing relationship. Such evidence may include any means of proof provided for by the procedural legislation: explanations of the performer of work, testimony, written and physical evidence, photo and film footage, sound and video recordings (paragraph 11 of Resolution of the Plenum of the Supreme Court of the Russian Federation of December 23, 2021 No. 45; paragraph 17 of the Resolution of the Plenum of the Supreme Court of the Russian Federation of 29 May, 2018 No. 15).
Summary of the above, it can be argued that the employer's failure to comply with the written form of the employment contract does not affect the legality of the arising employment relationship in the actual admission of the employee to work with the knowledge or on behalf of the employer (Articles 67, 67.1), does not lead to the recognition of this legal relationship invalid, that is not generating legal consequences. The employer must execute the employment contract within the period regulated by law (three working days from the date of admission of the employee to work) and in the prescribed form.
Defect of will as a condition for declaring of an employment contract invalid
Deals with defects of will and expression of will are characterized by the absence or improper formation of the will of the person performing the transaction, improper expression of this will, in other words, in such a transaction the will and expression of will do not correspond to each other. Such deals can be conventionally divided into deals made without inner will (under the influence of violence, threat, malicious agreement) and deals in which the inner will was formed incorrectly (under the influence of delusion, deceit). These deals also include fraudulent and feigned deals.
Despite the absence in labor law of rules on defects of will in the mechanism of exercising subjective rights and obligations of the subjects of labor relations, the courts actively recirculate the provisions of the Civil Code, establishing 'a defect of will of the employee to conclude an agreement to terminate the employment contract by agreement of the parties'12, 'a defect of will of the employee upon termination
12 Determination of the First Court of Common Pleas of October 11, 2021, case No. 88-22889/2021; Determination of the Seventh Court of Common Pleas of December 14, 2021, case No. 88-19007/2021.
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of the employment contract by agreement of the parties'13, 'a defect of will at the termination of the employment contract at the initiative of the employee'14, 'defect of will'15; 'misleading an employee'16; deception17; 'threat from an employer' (in particular, for dismissal on the employer's initiative on faulty grounds in the absence of the employee's application for termination of the employment contract at the initiative of the employee18; to apply a disciplinary sanction if an employee refuses to sign an agreement on termination of the employment contract by agreement of the parties19).
The legislator's ignorance of the fact that an employment contract is recognized as flawed due to a willful defect creates certain difficulties in practice. For example, in their decisions, courts use the concepts of 'abuse of right', 'fraud', 'misleading' in the same synonymous series (thus, misleading an employee was related to the deceptive actions of the employer, who in an attempt to avoid compliance with the reduction procedure offered the employee to sign documents on the alleged transfer to another employer20, and misleading the employee at employment regarding the amount of wages led to the conclusion of an employment contract under the influence of deception21) and even qualify misrepresentation as a form of abuse of right (in particular, the employer's unilateral refusal to pay the additional remuneration provided by the parties' agreement was regarded by the court as an attempt by the employer to mislead the employee about his pay, an abuse of right22; offering redundant employees vacant positions without a real opportunity to choose them; such behavior of the employer was qualified by the court as 'misleading the employee'23).
Sometimes courts incorrectly use the categorical apparatus of labor and civil law (there is a confusion of the concepts of 'deception' and 'misleading'), which is certainly wrong both logically and semantically.
For example, in one case the court found that the employer had been misled because the employee had knowingly provided false information about his and his daughter's permanent residence in an area with preferential socioeconomic status, as a result of which the federal budget of the Russian Federation was harmed in the amount of over 600 000 rubles24. In another case, the court found no evidence of misleading the employer, since the employee did not conceal the existence of temporary disability certificates, even though he did not submit them in a timely fashion25. It seems that in the three cases described above misrepresentation means deception.
The imaginary and pretense of an employment contract are also examples of a defect in the formation of the will of an employee and / or employer in the mechanism of exercising subjective rights and fulfilling obligations.
The imaginary in labor law can manifest itself in various forms: this is the conclusion by the head of the organization of fictitious labor contracts with employees who actually did not fulfill the labor duties stipulated by the labor contract, in order to cash out the funds (wages) transferred to the bank accounts of the specified 'employees'26; and the conclusion by the employer of fictitious employment
13 Determination of the Second Court of Common Pleas of November 16, 2021, case No. 88-25245/2021; Determination of the Seventh Court of Common Pleas of December 16, 2021, case No. 88-19838/2021.
14 Determination of the First Court of Common Pleas of September 27, 2021, case No. 88-21164/2021; Determination of the Seventh Court of Common Pleas of March 30, 2021, case No. 88-4672/2021.
15 Appellate Determination of the Tambov Regional Court of September 21, 2015, case No. 33-2682/2015.
16 Determination of the Judicial Board for Civil Cases of the Supreme Court of the Russian Federation of March 15, 2021, case No. 5-KG20-158-K2; Definition of the Supreme Court of the Russian Federation of October 4, 2013, case No. 69-KG13-4; Definition of the Supreme Court of the Russian Federation of October 4, 2013, case No. 69-KG13-4; Determination of the Ninth General Court of Cassation of November 25, 2021, case No. 88-8227/2021.
17 Determination of the Seventh Court of Cassation of General Jurisdiction of January 19, 2021, case No. 88-55/2021; Ruling of the Arbitration Court of the Moscow District of July 12, 2016, case No. F05-9271/2016; Determination of the Sixth Court of Cassation of General Jurisdiction of May 21, 2020, case No. 88-11659/2020.
18 Determination by the Judicial Board for Civil Cases of the Supreme Court of the Russian Federation of May 17, 2021, Case No. 11-KG21-8-K6.
19 Determination of the First Court of Common Pleas of October 4, 2021, case No. 88-19708/2021.
20 Determination of the Seventh Court of Common Pleas of January 19, 2021, case No. 88-55/2021.
21 Determination of the Eighth Court of Common Pleas of December 10, 2020, case No. 88-18029/2020.
22 Determination of the Second Court of Common Pleas of December 1, 2020, case No. 88-23934/2020.
23 Determination of the Third Court of Common Pleas of September 22, 2021, case No. 88-15366/2021.
24 Determination of the Second Court of Common Pleas of March 11, 2021, case No. 88-713/2021.
25 Determination of the Supreme Court of the Russian Federation of October 4, 2013, case No. 69-KG13-4; Determination of the Second Court of Common Pleas of July 1, 2021, case No. 88-14074/2021.
26 Ruling of the Commercial Court of the Moscow District of July 12, 2016, case No. F05-9271/2016.
E
contracts with pregnant women in order to receive benefits for compulsory social insurance in connection with maternity at the expense of the Social Insurance Fund of the Russian Federation27; and the inclusion in the employment contracts of executive employees (additional agreements thereto) of the conditions for the payment of compensation to them in connection with the termination of the employment contract or the conclusion of separate agreements with executive employees of a similar content after the initiation of bankruptcy proceedings in order to withdraw funds from the settlement accounts of the employer and, as a consequence of the decrease in the bankruptcy estate28.
The pretense of an employment relationship is seen in the substitution by the actual employer of the existing labor relations with a civil law contract (contract; vehicle rental and even a loan29). And if the consequences of a feigned civil law contract are obvious (the contract is voidable), then the imaginary employment contract does not cause such unambiguous legal results (the contract can be recognized as null and void).
Conclusion
Fixing in the LC RF norms on invalidity of a labor contract (labor legal relations) with defects in its form, content and subject composition is irrelevant, the legislator has developed quite adequate ways and means aimed at overcoming them. Vulnerability of subject composition of an employment contract both on the side of an employee and on the side of an employer, defects in the content of the employment contract and its (contract) form, as a rule, do not entail the recognition of this contract and the arisen employment legal relations as null and void.
On the contrary, the defect of will of the parties of labor relations in the process of its emergence, change and termination should be subject to legal regulation at the level of a codified act. It seems necessary to establish in the LC RF the rules on the relationship between will and expression of will (a person's will is manifested in his expression of will); on the primacy (priority) of expression of will over the will. Establishing in the law the factors that have influenced the process of evolution of will and deformed it, is necessary only in the case of defective development of one or another model of exercising subjective rights and/or performance of duties. Such factors include: pretence, imaginary labor legal relations, misleading, fraud of one of the parties of labor legal relations, bondage of labor legal relations, threat from the employer.
The article makes proposals for the adjustment of the norms of the current labor law, aimed at eliminating the deficiencies identified by the courts in the defectiveness of certain terms of the employment contract.
References
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Information about the author
Elena M. Ofman - Candidate of Juridical Sciences, Associate Professor of the Department 'Theory of State and Law, Labor Law', Institute of Law, South Ural State University (National Research University) (Chelyabinsk, Russia; e-mail: elena-ofman@yandex.ru).
© E. M. Ofman, 2022
Date of Paper Receipt: March 3, 2022 Date of Paper Approval: April 9, 2022 Date of Paper Acceptance for Publishing: June 24, 2022
