An Employee Has the Right to Terminate an Employment Contract on His or Her Own Initiative

Pursuant to Article 56 of the Labour Code, an employee has the right to terminate an employment contract on his or her own initiative by notifying the employer at least one month in advance, except in cases provided for by paragraph 3 of this Article. An employment contract may establish a longer period for the employee to notify the employer of termination of the employment contract.

An employment contract may be terminated on the employee’s initiative before the expiry of the notification period provided for in paragraph 1 of this Article with the written consent of the employer.

During the notification period provided for by this Article, the employee may withdraw the notification.

On 21 October 2021, T. filed a claim with the court against JSC seeking to cancel and declare unlawful the dismissal order. The claim was based on the fact that she had withdrawn her notification of termination of the employment contract; however, the defendant had not cancelled the order.

By the judgment of the No. 2 Court of Petropavlovsk dated 2 December 2021, the claim was dismissed.

In rendering its judgment, the court of first instance, referring to the provisions of Article 56 of the Labour Code, proceeded from the fact that the application submitted by T. to withdraw the notification of termination of the employment contract had not been signed. The withdrawal of the application for dismissal did not comply with the requirements applicable to the form of submission of such withdrawal.

By the ruling of the Judicial Collegium for Civil Cases of the Court of the North Kazakhstan Region dated 25 February 2022, the judgment of the No. 2 Court of Petropavlovsk, North Kazakhstan Region, dated 2 December 2021 was set aside and a new judgment was rendered.

T.’s claim against JSC was granted.

The order terminating T.’s employment contract was declared unlawful and cancelled.

It was established that on 11 August 2021, T. applied to the employer requesting termination of her employment contract effective 3 September 2021 pursuant to subparagraph 5) of Article 49 and paragraph 2 of Article 56 of the Labour Code.

On 2 September 2021, the claimant submitted an application to the employer requesting termination of her employment contract by agreement of the parties pursuant to subparagraph 1) of Article 49 of the Labour Code, with payment of compensation in the amount of two monthly actual salaries.

On the same day, 2 September 2021, T. contacted the defendant via the internal e-mail system with an application to withdraw her application for termination of the employment contract on her own initiative, requesting that her application for termination of the employment contract by agreement of the parties be considered.

Pursuant to subparagraph 81) of paragraph 1 of Article 1 of the Labour Code, a notification means an application of an employee or employer in written form (on paper or in the form of an electronic document certified by an electronic digital signature), submitted personally or by courier postal service, postal service, facsimile communication, e-mail and other information and communication technologies, or electronically with the authorization and identification of the employee or employer being ensured.

In setting aside the judgment of the court of first instance, the appellate court proceeded from the fact that on 2 September 2021, that is, before the actual date of termination of the employment contract, T. had withdrawn her application for termination of the employment contract through the internal e-mail system of JSC.

The notification of withdrawal of the application was sent through the bank’s internal e-mail system, while the authorization and identification of T. were ensured.

The message was sent to S., Director of the HR Department. The internal e-mail correspondence submitted by the claimant demonstrated that the notification sent by T. had been received by the employer.

Under these circumstances, the order terminating the employment contract dated 13 August 2021 was subject to cancellation by the employer, since T. had exercised her right to withdraw her application for termination of the employment contract.

When considering cases concerning termination of an employment contract on the employee’s initiative, courts should take into account that an employee who has expressed a desire to terminate an employment contract shall notify the employer and has the right to propose a termination date without complying with the one-month notice period; however, the employer has the right to refuse to agree to a reduction of the notice period.

If the employer refuses to reduce the notice period, the employment contract shall be terminated only upon expiry of the notice period, i.e. not earlier than one month later, unless a longer period for the employee to notify the employer of termination of the employment contract is established in the employment contract.

During the notice period and before its expiry, the employee has the right to unilaterally withdraw the previously submitted application by notifying the employer, even if an order terminating the employment contract on the employee’s initiative has already been issued.

The labour legislation of the Republic of Kazakhstan provides for a different procedure for termination of an employment contract on the employee’s initiative due to the employer’s failure to comply with the terms and conditions of the employment contract, without observing the one-month notice period.

Pursuant to paragraph 3 of Article 56 of the Labour Code, if the employer fails to comply with the terms and conditions of the employment contract, the employee has the right to notify the employer of such non-compliance, and if, after seven working days, the employer continues to fail to comply with the terms and conditions of the employment contract, the employee has the right to terminate the employment contract by notifying the employer no later than three working days in advance.

Thus, an employee has the right to shorten the one-month notice period by submitting two notifications:

1. a notification of the employer’s failure to comply with the terms and conditions of the employment contract; and
2. a notification of termination of the employment contract on the employee’s own initiative, with the one-month notice period shortened to three working days.

Upon expiry of the three-day notice period, pursuant to paragraph 5 of Article 56 of the Labour Code, the employee has the right to cease work, except in cases where the acceptance and transfer of the employer’s property (documentation) has not been completed through the fault of persons bearing material liability.

Upon termination of the employment contract, the employee shall be paid compensation for unused days of paid annual leave (paragraph 2 of Article 96 of the Labour Code), and, in the event of the employer’s failure to comply with the terms and conditions of the employment contract, the employee shall be entitled to a compensation payment due to loss of employment in the amount of the average monthly salary (subparagraph 3) of paragraph 1 of Article 131 of the Labour Code).

Jurisdiction

Pursuant to paragraph 5 of Regulatory Resolution No. 9 of the Supreme Court of the Republic of Kazakhstan dated 6 October 2017 “On Certain Issues of Application by Courts of Legislation in Resolving Labour Disputes” (hereinafter – the Regulatory Resolution), claims arising from employment relationships shall be filed with the court in accordance with the general rules of civil proceedings at the place of location of the defendant – the body of a legal entity, or at the place of residence of an individual employer acting as the defendant in the dispute.

Pursuant to part 2 of Article 29 of the Civil Procedure Code, a claim against a legal entity shall be filed with the court at the location of the legal entity in accordance with its constituent documents and/or the address entered in the National Register of Business Identification Numbers.

Where a claim is filed at the location of a branch or representative office pursuant to the procedure provided for by part 3 of Article 30 of the Civil Procedure Code, only legal entities may act as defendants.

Issues of jurisdiction in cases of the category under review do not generally give rise to difficulties.

Thus, by a ruling of the Ust-Kamenogorsk City Court, a civil case upon the claim of Zh. against an LLP for recovery of losses, payment for overtime work and compensation for moral harm was transferred, according to jurisdiction, to the Interdistrict Court for Civil Cases of Astana for consideration on the merits.

The court's ruling was correct, since it was established that the defendant, a legal entity, was located and registered at the following address: Astana, D. Kunaev Street. Claims arising from employment relationships shall be filed with the court in accordance with the general rules of civil proceedings at the place of location of the defendant.

In addition, I consider it necessary to draw the attention of the courts to the requirements of Article 19 of the Labour Code, pursuant to which the head of a branch or representative office of a foreign legal entity exercises all the rights and performs all the obligations of an employer on behalf of such legal entity. Consequently, an employee has the right to file a claim at the location of a branch of a foreign legal entity, having first verified the authority of the head of the branch to represent the interests of the legal entity.

Determination of Jurisdiction over Labour Disputes in the Event of Rehabilitation or Bankruptcy of the Employer

Thus, pursuant to part 8 of Article 35 of the Civil Procedure Code, cases involving disputes arising within the framework of rehabilitation proceedings and bankruptcy proceedings, including disputes concerning the invalidation of transactions entered into by the debtor or a person authorized by the debtor, the return of the debtor’s property, and the recovery of receivables based on claims brought by a bankruptcy or rehabilitation administrator, shall be considered by the same judge who rendered the decision to apply the rehabilitation procedure or to declare the debtor bankrupt, except for cases involving disputes whose jurisdiction is established by Article 31 of the Civil Procedure Code.

By a ruling of the Aktobe City Court dated 15 February 2021, the claim of Zh. against an LLP seeking cancellation of orders on suspension from work and dismissal, reinstatement at work, recovery of wages for overtime work, recovery of wages for the period of forced absence from work, recovery of a penalty and compensation for moral harm was returned pursuant to subparagraph 2) of part 1 of Article 152 of the Civil Procedure Code on the grounds that the dispute was not within the jurisdiction of that court.

In returning the claim, the court stated that a rehabilitation procedure had been applied to the Partnership by a decision of the Specialized Interdistrict Economic Court of the Aktobe Region and, therefore, pursuant to part 8 of Article 35 of the Civil Procedure Code, the case was subject to consideration by an economic court.

Indeed, by a decision of the Specialized Interdistrict Economic Court of the Aktobe Region dated 14 October 2016, which had entered into legal force, a rehabilitation procedure had been applied to the Partnership.

Pursuant to subparagraphs 5) and 7) of Article 67 of the Law of the Republic of Kazakhstan “On Rehabilitation and Bankruptcy”, in rehabilitation proceedings, the court shall accept for its proceedings cases involving property disputes in which the debtor acts as the defendant, as well as resolve disputes between participants in the rehabilitation procedure.

Pursuant to subparagraph 16) of paragraph 1 of Article 1 of the Labour Code, a labour dispute means disagreements between an employee (employees) and an employer (employers), including persons who were previously in employment relationships, concerning the application of the labour legislation of the Republic of Kazakhstan, the performance or amendment of the terms of agreements, employment and/or collective agreements, and acts of the employer.

It was established that the dispute between the parties arose from employment relationships, was based on the provisions of labour legislation and the terms of employment contracts, and was not related to the implementation of the rehabilitation procedure.

Since the court had incorrectly applied the provisions of part 8 of Article 35 of the Civil Procedure Code, by a ruling of the Judicial Collegium dated 12 March 2021, the court's ruling was set aside and the matter was remitted to the court of first instance for reconsideration.

Where an employer is declared bankrupt or a rehabilitation procedure is applied to the employer, disputes arising from employment relationships, including disputes concerning reinstatement at work, recovery of wages and other employment-related claims, shall be considered and resolved by courts of general jurisdiction. The provisions of part 8 of Article 35 of the Civil Procedure Code do not apply to labour disputes.

State Duty

Pursuant to paragraph 7 of Article 610 of the Tax Code, a state duty shall be charged on claims of a non-property nature in the amount of 0.5 MCI.

Pursuant to paragraph 1 of Article 951 of the Civil Code, moral harm means the violation, diminution or deprivation of personal non-property benefits and rights of individuals.

Pursuant to Article 149 of the Civil Procedure Code, a document confirming payment of the state duty shall be attached to the claim.

Pursuant to subparagraph 1) of Article 616 of the Tax Code, claimants are exempt from payment of the state duty in courts in claims for recovery of remuneration for labour and other claims related to employment activities.

Where a claim is granted, pursuant to Article 117 of the Civil Procedure Code, the court shall recover the state duty from the defendant, who is not exempt from its payment, in favour of the state.

Certain cases have been identified where courts, in violation of subparagraph 2) of part 1 of Article 149 of the Civil Procedure Code, accepted claims for court proceedings without payment of the state duty.

It follows from the case materials that A. filed a claim with the court against an LLP seeking recovery of wages, compensation for downtime, a penalty and compensation for moral harm.

By the judgment of the Zhetysu District Court of Almaty dated 13 April 2022, which was upheld by the ruling of the Judicial Collegium for Civil Cases of the Almaty City Court, the LLP was ordered to pay A. wage arrears, a penalty, compensation for moral harm and expenses incurred for legal representation.

The LLP was also ordered to make pension contributions and other mandatory payments for A.’s period of employment from 22 June 2021 through August 2021.

Compliance with the Pre-Trial Settlement Procedure for Disputes. Practice of Applying the Requirements of Article 159 of the Labour Code

Article 148 of the Civil Procedure Code sets out the requirements applicable to the form and content of a claim. Pursuant to part 6 of paragraph 1 of Article 148 of the Civil Procedure Code, the statement of claim shall contain information on compliance with the pre-trial procedure for applying to the defendant, where such procedure is established by law or provided for by agreement.

Pursuant to paragraph 1 of Article 159 of the Labour Code, individual labour disputes shall be considered by conciliation commissions, except for disputes arising between an employer and an employee of a micro-entrepreneurship entity, an employee of a non-profit organization with no more than fifteen employees, a domestic worker, a 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, in respect of unresolved matters or failure to implement the decision of the conciliation commission, by courts.

Thus, in disputes arising between an employer and an employee of a micro-entrepreneurship entity, an employee of a non-profit organization with no more than fifteen employees, a domestic worker, a 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, compliance with the requirement of prior consideration of the dispute by a conciliation commission is not required.

The requirement to apply to a conciliation commission also does not extend to certain categories of employees whose work is regulated by the Labour Code of the Republic of Kazakhstan subject to the specific features provided for by special laws and other regulatory legal acts of the Republic of Kazakhstan, including persons serving in the military, employees of special state and law enforcement bodies, and civil servants.

However, there are cases where this statutory requirement is violated and employees’ claims are returned without lawful grounds.

In the case of K. v. LLP, the claimant sought recovery of wages, compensation payments due to staff reduction, pension contributions, social health insurance payments, a penalty, and compensation for moral harm.

By an order of the Balkhash City Court of the Karaganda Region dated 19 August 2022, the statement of claim was returned due to the absence of a certificate confirming wage arrears and the absence of a decision of the conciliation commission.

Upon repeated filing, by an order dated 27 September 2022, the statement of claim was again returned for failure to comply with the pre-trial dispute settlement procedure. The court noted that a copy of the application to the conciliation commission had been submitted; however, there was no evidence that the application had been duly delivered to the employer, nor was there a decision of the conciliation commission.

On 14 October 2022, the claimant filed the claim again, and on 27 October 2022, the court approved the mediation agreement.

At the same time, according to a letter from the state labour inspector, the LLP was registered as a micro-entrepreneurship entity in the Unified Register of Subjects and Objects of Inspections maintained by the Prosecutor General’s Office of the Republic of Kazakhstan, as confirmed by a certificate of the Ministry of National Economy.

Since the LLP was a micro-entrepreneurship entity, the pre-trial procedure involving a conciliation commission was not mandatory.

Case of D. v. LLP “Құрылыс компаниясы”

By an order of the No. 2 Court of Uralsk dated 4 July 2022, the claimant’s statement of claim for recovery of wages was returned due to non-compliance with the mandatory pre-trial dispute settlement procedure.

By a resolution of the Judicial Collegium for Civil Cases of the West Kazakhstan Regional Court dated 9 August 2022, the order was annulled and the case was remitted to the court of first instance for consideration.

The court of first instance relied on paragraph 1 of Article 159 of the Labour Code, which provides for the mandatory consideration of an individual labour dispute by a conciliation commission.

However, the claimant was the sole founder and head of the legal entity. Therefore, the requirement to establish and apply the conciliation commission procedure did not apply in this case.

Case of U. v. LLP

By an order of the No. 2 Court of the Baiterek District dated 1 November 2021, the claimant’s statement of claim for recovery of wages was returned on the grounds that the claims were undisputed and were subject to pre-trial resolution through a notary.

By a resolution of the appellate court dated 20 January 2022, the order was annulled and the case was remitted for reconsideration.

Under subparagraph 9) of paragraph 2 of Article 92-1 of the Law of the Republic of Kazakhstan “On Notariat”, a notary issues an executive writ for undisputed claims concerning accrued but unpaid wages and other payments due to an employee.

However, no employment contract had been concluded between the parties. Consequently, the claimant’s wages had not been accrued.

The claim was based on a time sheet and a waybill. These circumstances indicated the existence of an actual labour dispute concerning the existence of an employment relationship and wage arrears. Therefore, the dispute was subject to judicial consideration.

Time Limits for Bringing Individual Labour Disputes before the Conciliation Commission and the Court (Article 160 of the Labour Code)

The Labour Code establishes the following time limits for applying to the conciliation commission and the court:

1) For disputes concerning reinstatement at work:

• one month from the date of delivery, or from the date of sending by registered mail with acknowledgment of receipt, of a copy of the employer’s act on termination of the employment contract — for applying to the conciliation commission;
• two months from the date of delivery, or from the date of sending by registered mail with acknowledgment of receipt, of a copy of the conciliation commission’s decision concerning an unresolved dispute or non-compliance with its decision — for applying to the court.

2) For other labour disputes — one year from the date when the employee, including a former employee, or the employer became aware or should have become aware of the violation of their rights.

The limitation period is suspended for the duration of the mediation agreement, as well as where there is no conciliation commission until the commission is established.

The conciliation commission may restore a missed time limit where it finds that the reasons for missing the time limit are valid and may consider the dispute on its merits. The issue of whether the reasons for missing the time limit are valid is determined by the conciliation commission itself.

For persons who, under the Labour Code, are entitled to apply directly to the court without first applying to a conciliation commission, the following time limits apply:

• for disputes concerning reinstatement at work — three months from the date of delivery, or the date of sending by registered mail with acknowledgment of receipt, of a copy of the employer’s act on termination of the employment contract;
• for other labour disputes — one year from the date when the person became aware or should have become aware of the violation of their rights.

Thus, as a general rule, individual labour disputes are subject to a mandatory pre-trial settlement procedure, except for the categories of disputes expressly exempted by law.

As a general rule, an employee must first apply to the conciliation commission, and only after receiving a copy of its decision on an unresolved dispute or in the event of non-compliance with the decision may the employee apply to the court.

Where a conciliation commission has not been established, the limitation period is suspended until the commission is established.

Pursuant to paragraph 3 of Article 159 of the Labour Code, the procedure for establishing and operating a conciliation commission is determined by an agreement on the work of the conciliation commission or by a collective agreement.

Regulatory Framework

• Constitution of the Republic of Kazakhstan;
• Civil Code of the Republic of Kazakhstan (General Part) dated 27 December 1994;
• Civil Code of the Republic of Kazakhstan (Special Part) dated 1 July 1999;
• Civil Procedure Code of the Republic of Kazakhstan dated 31 October 2015 No. 377-V;
• Labour Code of the Republic of Kazakhstan dated 23 November 2015 No. 414-V ZRK;
• Code of the Republic of Kazakhstan “On Taxes and Other Mandatory Payments to the Budget (Tax Code)” dated 25 December 2017 No. 120-VI ZRK;
• Entrepreneurial Code of the Republic of Kazakhstan dated 29 October 2015 No. 375-V ZRK;
• Code of the Republic of Kazakhstan “On Public Health and Healthcare System” dated 7 July 2020 No. 360-VI ZRK;
• Law of the Republic of Kazakhstan “On Trade Unions”;
• Law of the Republic of Kazakhstan “On Enforcement Proceedings and Status of Bailiffs” dated 2 April 2010 No. 261-IV;
• Law of the Republic of Kazakhstan “On Notariat” dated 14 July 1997 No. 155-I;
• Law of the Republic of Kazakhstan “On Limited and Additional Liability Partnerships” dated 22 April 1998 No. 220-1;
• Law of the Republic of Kazakhstan “On Joint Stock Companies” dated 13 May 2003 No. 415.

Regulatory Resolutions of the Supreme Court of the Republic of Kazakhstan

• Regulatory Resolution of the Supreme Court of the Republic of Kazakhstan dated 6 October 2017 No. 9 “On Certain Issues of Application by Courts of Legislation in Resolving Labour Disputes”;
• Regulatory Resolution of the Supreme Court of the Republic of Kazakhstan dated 27 November 2015 No. 7 “On Application by Courts of Legislation on Compensation for Moral Harm”;
• Regulatory Resolution of the Supreme Court of the Republic of Kazakhstan dated 11 July 2003 No. 5 “On Court Judgment in Civil Cases”;
• Regulatory Resolution of the Supreme Court of the Republic of Kazakhstan dated 25 December 2006 No. 9 “On Application by Courts of the Republic of Kazakhstan of Legislation on Court Costs in Civil Cases”.

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