American company’s Russian subsidiary to litigate Putin’s coronavirus order

How a Tatarstan lawyer defends a Petersburg company that laid off employees before the coronavirus non-working days by litigating the presidential order

American company’s Russian subsidiary to litigate Putin’s coronavirus order

Lawyer Lavrenty Sichinava from Kazan defends the interests of the “American” employer who laid off his Russian workers at the height of the coronavirus pandemic in the Saint Petersburg court. Read in Realnoe Vremya’s report how the employees of JSC became unemployed literally an hour before Vladimir Putin’s order on non-working days came into force, which provided a chance of postponing the lay-off, and how this company’s claim on litigation of the presidential order grew from individual claims of people laid off from the small company.

Workers, out!

“The Russian company JSC is a supporting company for TapJets Inc. has a namesake app to book a private jet at any point of the world,” former worker of Nikita Naboka told Realnoe Vremya. “I worked in the company from 23 August 2019, I sold private flights and dealt with current orders. I worked remotely, from home. Director General of the firm Mr Sevidov told me the news about a soon lay-off by phone at 25 March 2020 night, during my shift. He asked me “to take voluntary redundancy” without compensation due to a complicated situation with the US business aviation because of the coronavirus and a tough financial situation of the company. I refused. A day later I was offered compensation equal to the half of the salary, about 25,000 rubles, I refused again.”

Despite this, Naboka says, he and some other employees were laid off but on other grounds — they terminated the labour agreement due to emergency circumstances that impeded the continuation of labour relations. According to Clause 7, Article 83 of the Labour Code of Russia, it is military actions, a catastrophe, a natural disaster, a big accident, an epidemic and other emergency circumstances if they are recognised as such by a “decision of the government of the Russian Federation or an agency of public power of the Russian region”.

“On 30 March, together with other laid off people, he came to the office and got the documents on the lay-off,” Nikita Naboka said later. “I and my colleagues had the order on lay-off as of 25 March 2020. I haven’t contacted anybody from the company TapJets since 30 March, but soon after the lay-off filed a claim to the Frunze district court in Saint Petersburg.”

Andrey Sevidov called other employees of at the same night he did Nikita Naboka and asked them to take voluntary redundancy like he did Naboka. Two workers also refused to take voluntary redundancy, they refused an offer to terminate the labour relations on mutual agreement of the sides as well. But they received a lay-off pay to their cards.

In their claim, the employees cite in their claims that a lay-off due to emergency circumstances is illegal because the Russian government didn’t declare a state of emergency, while the president of the country, on the contrary, established non-working days with pay for workers from 30 March to 3 April with the order No. 206. They ask the court to recognise her lay-off illegal, reinstate them in the position with salary and recover compensation from JSC for the salary they didn’t receive because of the forced absence at work and moral damage estimated at tens thousands of rubles.

“I am asking the employer to respect my rights,” Nikita Naboka told Realnoe Vremya. “And the court will decide how this will happen.”

Trump is guilty...

“Due to the coronavirus, JSC laid off five employees,” Andrey Sevidov’s representative Lavrenty Sichinava explained to Realnoe Vremya the position of the employer.

“My client who lives in the USA asked me to communicate you his comment. He says he didn’t have any complaints about the former employees and he had to lay them off only because of the unfavourable financial situation due to the pandemic. The laid off workers are all employees of one department, programmers, high-tech specialists. Precisely this department did the main work to service business aviation, and here even regular flights were suspended, moreover, indefinitely... A client of the company notified Sevidov there wouldn’t be orders. It was clear there wouldn’t be money. And my client simply didn’t have a choice but dissolve the department. And, by the way, some employees understood it — not all laid off workers but only three of them filed claims.”

The “incomprehensive” employees complained to the labour inspection. In May, Petersburg's State Labour Inspection carried out an unscheduled inspection at TapJets.Ru. After that, it issued a warning that the labour rights of the organisation’s employees couldn’t be violated. It turns out from the context that the inspectors think that the lay-off of the company’s workers didn’t have legal foundation due to the emergency state. In this document, the inspectors also cited the Russian president’s order on the non-working days.

“In the disagreement on the warning of the State Labour Inspection and claims of the laid off employees, we indicated that after Donald Trump declared a state of emergency on 13 March on the territory of the USA, the only client of services of JSC — its American partner — offered to take a series of measures to cut costs, including to reduce the staff, because of the impossibility of running the business,” Lavrenty Sichinava said. “In fact, the only client refused the firm’s services. Moreover, nobody cancelled the Russian government’s Decree No. 304 as of 21 May 2007 On Classification of Emergency Situations of Natural and Manmade Origin, which reads that an emergency as a result of which the number of casualties or people whose health was damaged is over 500 people or the amount of financial damage is 12 billion rubles is a federal emergency. This means that de facto there was an emergency on the territory of the Russian Federation when the plaintiffs were laid off. And the citation of Russia’s president’s order No. 206 isn’t legally valid: this document has come into force since it was published, and according to the information of Russia’s president’s website, it was published at 19.00 on 25 March 2020. Even if the lay-off was at the end of the working day, which ends at 18.00, it happened an hour before the order came into force.”

On 5 June 2020, the Court Panel on administrative cases registered the claim of the joint stock company to litigate the Russian president’s order. Photo:

…and might Putin reply

As the presidential order on non-working days became one of the pitfalls in the argument on termination of labour relations with the employees whose services the company stopped needing because of the COVID-19 pandemic, JSC also initiated a trial. On 5 June 2020, the Court Panel on administrative cases registered the claim of the joint stock company to litigate the Russian president’s order as of 25.03.2020 No. 206 On Announcement of Non-Working Days in the Russian Federation.

This claim reads that the “Labour Code of the Russian Federation doesn’t contain such a concept as non-working days”, therefore the order No. 206 contradicts the federal law, hence the Russian Constitution according to which orders of the president of the country that contain norms of labour law can’t contradict federal laws”.

On this foundation, JSC asked the court to recognise the order signed by Vladimir Putin on 25 March illegal. However, the organisation’s claim wasn’t accepted for consideration, it was sent back to the clerk’s office on 9 June. The reasons for the refusal are unknown at the moment.

Moratorium on bankruptcy

We just should specify that according to SPARK-interfax, JSC was registered by Russian citizen Andrey Sevidov in Saint Petersburg on 7 September 2018. The average staff number of this small enterprise in 2019 was six people, authorised capital is 12,000 rubles. Sales revenue in 2019 totalled almost 3,2 million rubles. However, the company ended the year with a net loss equal to 3,1 million (managerial costs of the firm totalled almost 5,92 million during the year). The information about taxes, insurance premiums to the Federal Compulsory Medical Insurance, Social Insurance Fund and Pension Fund of Russia on SPARK-interfax and in other sources is absent. And evaluates its profitability as zero. JSC is on the list that is covered by the moratorium according to Article 9.1 of the Federal Law No. 127-FL On Insolvency (bankruptcy) during the spread of the coronavirus infection as of 26.10.2002.

By Inna Serova