International Employment Law Guide Italy

Analysis

Azerbaijan

International Employment Law Guide

This page outlines country-level details about the onboarding process when hiring employees, and touches upon the applicable rules when terminating employment contracts.

Last updated: 1 April 2021

A. Hiring of employees (onboarding)

Mandatory employer requirements

The Labor Code of the Republic of Azerbaijan (“Labor Code”) requires that employers meet certain obligations when employing an individual in Azerbaijan. Generally, it is required to:

  • Draw up an employment contract;
  • Take out an occupational accident insurance; and
  • Register the employment contract via the online portal of the Ministry of Labor and Social Protection of Population (Labor Ministry) and receive an electronic notification in this regard.

The terms of the employment contract must be agreed and signed by both the employer and the employee. The employment contract enters into force only after its registration. The employment contract must contain a number of mandatory items such as the position, job description, vacation, work schedules applied within the company, the salary and its pay date, disciplinary measures, etc. Each employer also has to obey some specific health and safety measures to mitigate work-related risks.

It is not required to establish an Azerbaijani legal entity to hire someone to work in Azerbaijan. Foreign entities can handle all employer formalities by establishing a representative or branch office in Azerbaijan.

Probation periods

A probation period with a maximum duration of three months is allowed under the Labor Code, except in specific cases defined by the law.

Hiring checks

Medical examination
There is no legal requirement to conduct medical checks upon hiring, except for jobs with heavy and haz-ardous employment terms, as well as employment in the public catering, food industry, health sector, etc. The full list of positions which are subject to pre-employment and regular (during employment) medical checks is defined in the law and during the hiring process for such jobs/positions, employment can be made conditional upon passing a medical exam.

Criminal background check
Criminal background checks are permissible only for specific functions where it concerns a legal requirement for hiring (specifically established in the laws).

Reference and education checks
Reference and education checks are permissible with consent of the individual.

Diversity & inclusion

The Labor Code does not stipulate any diversity measures with focus on gender, race or disability. However, it requires employers to treat all employees equally (in particular with regard to pay and promotion) regardless their gender, race or nationality.

Types of employment contracts

All employment contracts must be concluded in writing, signed and undergo electronic registration via the electronic portal of the Labor Ministry before (at the latest when) the employee enters into service.

Where an employment contract is concluded without mentioning a time limit, it is considered to be an open-ended employment contract. Parties can also conclude an open-ended employment contract explicitly.

A fixed-term employment contract is an agreement mentioning a specific end date after which the parties are released from their mutual obligations. The law establishes a list of cases when the parties may enter into fixed-term employment contracts, which includes temporary replacement of an absent employee, the temporary nature of the project, mutual agreement of the parties, etc. Successive fixed-term contracts lasting over five years will be treated as open-ended contracts.

Specific rules for executives

There is no official category of executives under Azerbaijani law; executives can therefore be employees or be self-employed. In the latter case they fall outside the scope of the labor law rules and their rights are governed entirely by what they have contractually agreed on with the company.

Language requirements

All HR-related documents (such as employment contracts) must be drawn up in the Azerbaijani language. The documents can be bilingual as well, provided that the Azerbaijani language is defined as the prevailing one in case of contradiction between the languages.

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B. Termination of employees (Offboarding)

Kinds of dismissal

In accordance with the Labor Code, an employment contract for an indefinite or definite period can be terminated at the employer’s initiative with or without a notice period, depending on the legal grounds.

Under the Labor Code an employment contract can be terminated by the employer on the following grounds:

  • Liquidation of an entity;
  • Redundancy of employees/staff;
  • Upon resolution of the attestation committee (composed of experienced and highly skilled employees of the entity and representatives of trade unions and created for the purposes of assessing whether the current position of an employee is in line with his/her occupational degree, experience, level of professionalism, etc.) that the employee does not comply with his/her position due to lack of professionalism level, qualification (profession);
  • Failure of an employee to meet the expectations during the probation period;
  • If an employee working in a state-funded enterprise has reached the pension age; and
  • If an employee does not fulfill the obligations delineated in the job description/employment con-tract, or grossly violates his/her labor functions.

Termination of an employment contract under the last ground is only allowed if an employee deliberately or negligently fails to fulfill his/her job functions, or job duties which lead to an interruption of the normal flow of work, production, labor and performance discipline, or infringes the rights of a proprietor, employer, staff or certain members of staff, or inflicts damage to their interests protected by law.

The following cases are considered gross violations of labor functions, with respect to the last bullet point above, provided that an employee:

  • Is absent from work for a full day without any rational reason (e.g., illness, or illness of a family member, etc.);
  • Attends work under the influence of alcohol or drugs, psychotropic and other toxic substances or brings alcohol, drugs, psychotropic and other toxic substances to work;
  • Causes material damage to the proprietor as a result of guilty actions (inactions);
  • Violates the procedures on the protection of labor as a result of his guilty actions (inactions) and causes damage to the health of his colleagues leading to their death;
  • Intentionally fails to maintain the confidentiality of state, production and commercial secrets or fails to fulfill his/her obligations on keeping the said secrets confidential;
  • Causes serious damage to employers, enterprises or owners' lawful interests as a result of his/her gross mistakes or the infringement of the law during his/her employment activity;
  • Breaches the job description for a second time within six months, regardless of the disciplinary actions imposed by the employer;
  • Commits administrative offenses or crimes creating a public menace during working hours.

An employer must justify the necessity of the termination based on any of the above grounds.

The Labor Code also defines the following grounds of termination of an employment contract:

  • Expiration of a duration of an employment contract (fixed-term);
  • Alteration of working conditions; and
  • Change of proprietor of an enterprise (only with respect to heads, deputy heads, chief accountants of an entity or directors of other structural divisions performing direct management functions).

The fixed-term employment contract ends when the agreed term expires, without notice period or indemnity in lieu of notice. If the employer and employee continue to execute the employment contract within one week beyond its expiry date, the contract will be prolonged automatically under the same terms.

Dismissal motivation

Dismissed employees have the right to know the specific reasons that have led to their dismissal. The dismissal must be formalized by an employer’s reasonable written order (decree, decision), signed and sealed properly. The Labor Code obliges employers to inform the employees of the reasons of their dismissal and provide them with a copy of the respective order. A penalty applies if the employer fails to meet these requirements.

In the event the court decides the dismissal is unfair (i.e., the dismissal is not related to the employee’s behavior, aptitude or the organization’s needs, etc.), the employee will be reinstated at work and will be entitled to compensation equal to his/her salary as of the date of unfair dismissal.

Notice period

The Labor Code outlines only the following cases requiring an employer to send a notification to the employee prior to termination of an employment agreement:

  • Redundancy of employees/staff;
  • Alteration of working conditions; and
  • Failure of an employee to pass the probation period.

The duration of the notice period during redundancy is exclusively based on the employee’s seniority, meaning the period during which the employee was employed by the same undertaking. The notice periods are provided by law and are expressed in weeks (see below):

Seniority Notice by the employer
up to 1 year
2 weeks
1 - 5 years 4 weeks
5 - 10 years 6 weeks
over 10 years 9 weeks

During the notice period, employees are exempt from performing their employment functions for at least one working day each working week in order to seek a new job.

Upon the written consent of the employees, the above-defined notification periods can be substituted with the below listed payments:

Notice period Notice by the employer
2 weeks 0.5 times the average monthly salary
4 weeks 0.9 times the average monthly salary
6 weeks 1.4 times the average monthly salary
9 weeks 2 times the average monthly salary

In case of any alteration of working conditions the employee must be provided with one month’s notice prior to the alteration.

In case of failure by an employee to pass the probation period, an employer may terminate the employment agreement on the respective grounds by giving three days’ prior written notice to the employee.

Severance pay

Under the Labor Code, an employer has to provide severance payment in the following cases and amounts:

  • In case of individual dismissal due to redundancy of employees/staff or liquidation of an entity (depending on their seniority with the employer):
    • Seniority of up to one year–one average monthly salary of the employee;
    • Seniority from one year to five years–at least 1.4 times the average monthly salary of the employee;
    • Seniority from five years up to ten years–at least 1.7 times the average monthly salary of the employee; and
    • Seniority of more than ten years–at least 2 times the average monthly salary of the employee.
  • In case of individual dismissal due to alteration of working conditions, mandatory commencement of military or alternative service and if an employee cannot fulfil his/her functions due to complete loss of working ability for a continuous period of more than six months, the severance payment must constitute at least two times the employee’s average monthly salary;
  • In case of death, no less than three times the employee’s average monthly salary is paid to the employee’s heirs; and
  • In case of individual dismissal due to change of the owner of the entity, no less than three times the employee’s average monthly salary.

Dismissal formalities

Notice of dismissal of an employee is made in writing and must be signed and confirmed by the employer, while the employee signs for receipt.

Provided that the parties do not expressly stipulate the conditions concerning the documentation on termination in the employment contract, dismissal must be formalized by an employer’s reasonable written order (decree, decision), signed and sealed properly.

The order (decree, decision) on dismissal must include the following information:

  • Name and legal address of the entity, the reference number of the order (decree, decision) on dis-missal, date of the document, full name and position of the employer who signs the document;
  • Employee’s full name;
  • Position of the employee specified in the employment contract;
  • Grounds for terminating the employment contract;
  • Reference to the respective article of the Labor Code where such grounds are specified;
  • Date of termination of the employment contract; and
  • Official documents serving as a reason for issuing the order (decree, decision) on termination of the employment contract.

If the order (decree, decision) does not reflect all of the information above, such an order (decree, decision) may be deemed invalid during the litigation process.

Termination of employment must be registered via the online portal of the Labor Ministry. Any changes become legally valid only after registering them on the system.

Special dismissal protection

Dismissal protection applies to certain employees in protected categories (except in the case of termination due to liquidation of an entity, or the expiration of a term of an employment contract):

  • Pregnant women and women with a child below the age of three, as well as single men taking care of a child below the age of three;
  • Employees raising a child below the school age whose only income source is the company (s)he works for;
  • Employees who have temporarily lost the ability to work;
  • Employees afflicted with diabetes or scarred sclerosis;
  • For being members of trade union or any political party;
  • Employees having dependents with a restricted health younger than 18 years old or first group disabled.

The employment contract may not be terminated at the initiative of the employer while the employee is on vacation or business trip, or is involved in collective negotiations.

Legal means of employees

In general, an employee may appeal to the court for resolution of an individual labor dispute within one calendar month from the day when he became aware that he/she has been unlawfully dismissed. The Labor Code further entitles an employee to appeal to the court within one year from the day when he became aware that his rights have been violated, provided the appeal is related to money and other property claims, as well as to labor disputes emerged as a result of caused damages. The appeal period is not applicable to claims for compensation for damages inflicted to the employee’s life and health. Employees falling under redundancy or dismissal due to liquidation of an entity are entitled to receive insurance payment on unemployment from the state. Hiring of any person to the position which was subject to redundancy or any close position within a short period of time upon completion of the redundancy may be challenged by the state authorities in case of a labor audit, as well as in case of a court claim by the employee.

Specific rules for executives

The rules of individual dismissal of a managing director who works for a given company under an employment contract are the same. The rules on corporate governance established under civil legislation must also be considered in terms of decision making on such dismissal. Under the civil legislation of Azerbaijan, managing directors are appointed and dismissed by the resolution of shareholders.

Collective dismissals

The Labor Code does not provide for any specific rules of termination of the employment contracts of multiple people within a short timeframe. The employer must follow the general provisions of the Labor Code stipulated for individual dismissals.

COVID-19 measures

As of October 2021 at least 80% of employees shall need to obtain a COVID-19 passport proving vaccination. Violation of this requirement will lead to restriction of the employer’s activity. This requirement applies to an extensive list of activity types, which includes, inter alia, hospitality, public catering, big shopping centers, consulting, financial services, pharmacy, healthcare, etc.

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Get in touch

Amina Bakhshiyeva
Azerbaijan
abakhshiyeva@deloitte.az | +99 412 404 1210

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