11.08.2014 Alina Kozmina, associate at Maxima Legal

Temporary agency work will be prohibited

Amendments related to banning temporary agency work, which have been extensively discussed, are introduced to the Labor Code of the Russian Federation and other legislative acts.

The Law provides for two new legal institutions: “temporary agency work” and “activities related to staff (personnel) leasing”. This being said the former is prohibited, while the latter is permitted subject to a number of qualifications provided by the Law.

Temporary agency work means the work carried out by employee upon instruction of employer in the interests, under direction and control of an individual or legal entity not being the employer of such employee. Such work is prohibited.

Lawful activities related to staff (personnel) leasing, on the contrary, provide: 1) for assigning employees (personnel) to a third party only subject to their consent; 2) for documenting relationships between the parties assigning and receiving employees by an agreement with respect to provision of employee’s work; 3) for performance by employees of those functions only that are provided by their employment contracts concluded with the assigning party (employment agency, etc.); 4) that employees are to work temporary at the receiving party; 5) that both assigning and receiving parties are to ensure, in the end, observance of employee’s rights (Article 18.1 of the Law “On Employment in the Russian Federation” as amended).

As a general rule, the entities assigning employees to the receiving party are private employment agencies, ie special accredited entities. A legal entity lacking such special status is also entitled to assign employees to a third party, however only where such third (receiving) party meets one of criteria expressly stated in the Law.

Rights of employees are guaranteed by agency’s obligation to exercise control over compliance by the receiving party with the provisions of labor law and correspondence between work actually performed by the employee and his job description.

It is important that the Law also provides for vicarious liability of the receiving party under the employer’s obligations arising out of labor relationships with the employees. Thus, despite of no contract arrangements with the employee the receiving party has a number of duties and, correspondingly, risks associated with a potential failure to perform such duties.

The Law becomes effective from 1 January, 2016.