What is the difference between dismissal due to reduction and by agreement of the parties: which is better and more profitable for the employee? How to resign during layoffs and by agreement of the parties.
In order to understand how best to resign - by layoff or by agreement of the parties, it is necessary to take into account all the features of each process.
In addition, there is individual characteristics upon dismissal of each employee. Reduction or dismissal by agreement of the parties may be various options for a number of categories of workers.
If dismissal occurs due to reduction or agreement of the parties, then compensation will be different. What is best for an employee will depend on his qualifications and benefits, that is, the more benefits an employee has and positive aspects(experience, qualifications, length of service), the more he will receive with a standard reduction. In addition, the reduction or agreement of the parties has individual characteristics.
Important! If the parties agree, the dismissed person will receive only what is provided for in the agreement, that is, any employee may not receive many of the payments due to him.
Which is more profitable often depends on numerous factors, so you should carefully study all the features of layoffs of one type or another. In addition, the redundant person will have more rights to appeal in the future if violations were committed.
Features of reduction
The reduction occurs in accordance with legislative norms and rules. This case has a number of disadvantages. Among them are:
- This type is carried out only at the will of the leader himself and it is for this reason that it is less acceptable. This is exactly what negative side may affect future employment.
- Typically, the process applies to those employees whose work is average, as well as those whose services the company no longer needs. Such an entry in the Labor Code significantly reduces the chances of getting a new job.
- Dismissal occurs only after serving a 2-month period.
- Payments from the organization are retained for 3 months, unless the employee was unable to find a job. In this case, contacting the local employment exchange is mandatory.
- First of all, citizens who have preferential rights are left.
- The employer is obliged to offer the employee new position(if available), but it may have lower pay, and may also be located in a different area.
There are also a number of advantages:
- The notification comes 2 months before the actual date. This allows the employee to find the most suitable option for him.
- Each person who is laid off is paid severance pay, which is equal to the average monthly earnings.
- For 60 days, the employee retains his average income for the entire period until new employment.
- When applying to the Employment Center and not finding work there for a certain period of time, the employee’s payment is extended to 3 months.
- If a collective agreement has been concluded, the benefit amount may increase.
- Each employee is offered a different position if available.
- In some cases, the benefit is paid six times the amount.
An employee can receive 2 salaries at once, as well as severance pay. In this case, a cash payment will be made within 2-3 months if a job is not found.
It is worth considering that finding employment is more problematic than after leaving for another reason.
Features of dismissal by agreement
Provides for a mutual agreement that will take into account all the features of the process, while maintaining a gentle regime for the employee and the employer. This process also has its advantages, which include:
- Termination of the contract can happen at any time, which will be established during negotiations and documented.
- The employee may not work for a 2-month period, but immediately receive all the documents.
- The employee can choose the date on which the contract will be terminated.
- A person who has entered into an agreement to terminate an employment relationship may receive compensation, the amount of which may be several times higher than what is due when leaving at will.
- If the initiator is the manager, then it will not be possible to start the procedure without the employee’s consent.
- Documents are processed as quickly as possible.
- If the contract was terminated and the employee registered with the social security authorities, then he can count on receiving benefits, the amount of which will be significantly larger and the payment period will be longer.
- The chances of finding a new job are much higher, since this shows that the employee is capable of dialogue, and also this does not indicate the level of his professional qualities.
It is especially important that the clause indicating the existence of an agreement is entered into the work book.
This type also has a number of disadvantages that are worth mentioning. These include:
- With such a breakdown in the labor relationship, control by organizations such as the trade union is completely absent.
- All payments that a resigning person wants to receive must be specified in the contract. Otherwise, he risks losing them completely.
- This type provides for the severance of relationships with minor children, mothers raising children alone, and those on sick leave. However, other organizations cannot influence the dismissal process.
- Terminates upon signing employment contract, and all labor relations are severed.
- Upon dismissal, the employer rarely agrees to pay benefits and other guarantees that were prescribed in the collective or employment agreement.
The contract provides for all the features of the process, that is, all clauses on compensation and other payments are considered there. On these points, this option is superior to a reduction, but, on the other hand, the employer can pay a smaller amount. Here everything will depend on the negotiation process and the consent of the employee.
Especially an important condition will correct order registration and compliance with all legal norms and nuances, for example:
- grounds for mutually beneficial termination;
- full consent of the employee and employer with the dismissal and all agreements;
- correct legal registration documentation and accounting books;
- compliance with the conditions in full.
The employee can agree with the employer on any conditions that will be officially certified. In some cases, the employee's total compensation and benefits are several times higher than in other cases. But there is also an option for less benefit. The basis is a complete study of the documentation, since once signed, it is no longer possible to change this document.
You can appeal the agreement only in a few cases. For example, if the employer illegally fired and falsified documents. There is also the option of pressure, but these cases will have to be proven in court, including the entire evidence base. In this case, the only possibility of a valid appeal would be incorrect execution of documents and contracts, but employers very rarely make such mistakes, since such documentation is important.
It turns out that when different options If the employment relationship is broken, the employee is more protected, but does not have the opportunity to increase his benefits. With agreement this is possible.
How to choose the right one
When choosing, it is worth considering several features of dismissals, since layoffs for an employee or dismissal due to staff reduction will differ from the agreement of the parties. Therefore it is necessary to compare:
- total amount of compensation;
- opportunities for further employment;
- terms of further payments;
- the presence of preferential conditions or certain agreements.
Only after a complete comparison is a choice made. If desired, the agreement has more options, but the employer can also greatly reduce compensation payments.
Important! After dismissal by agreement, it is almost impossible to appeal the terms of the contract if all legal norms and the registration rules were followed.
Conclusions
Various dismissal options have both their advantages and disadvantages. If you need to quickly change jobs, then a number of options from the usual process will not work. They are also not suitable for the possibility of actually obtaining those conditions that will fully pay for the process.
In fact, the choice depends only on the ability to negotiate with the employer, who can make serious concessions, including monetary ones, if special circumstances arise.
When choosing a method of dismissal, a person being dismissed must take into account the entire range of conditions. For some employees, leaving their position due to redundancy will be a priority option. Although the standard reduction has more positive aspects. It is more difficult to lay off an employee due to the regulations of labor relations, while the agreement of the parties is distinguished by its simplicity, both for the employee and for the manager who benefits from this process.
Reducing the number of employees in an organization or enterprise is quite an unpleasant fact for employees. In such a situation, people tend to look for “the machinations of ill-wishers” in everything and for this reason they are extremely wary of management’s proposal to conclude a document of agreement between the two parties, which will clarify all the nuances of the upcoming dismissal.
To understand this issue, you should take a closer look at the procedure for terminating an employment contract in both cases, and carefully weigh all the positive and negative points for both stakeholders(employer and his employee).
When leaving, check to see if you have any unused vacation days - the employer is obliged to compensate for them. You can read more in .
The main differences between the two types of dismissal
To finally make a choice in favor of one or another type of termination of an employment contract, you can compare the main points of the procedure (sending notifications, and the possibility of their withdrawal, deadlines for sending, accrued settlement funds).
Rules for payment of severance pay upon dismissal by agreement of the parties
Many employers try to make do with one statement from the employee, on which they base the resolution. But it is better when, upon dismissal by agreement of the parties, an agreement is drawn up to terminate the employment contract by agreement of the parties, which fixes a number of important issues: what date will be the last day of work, that is, the day of dismissal; that the employee will be dismissed precisely by, that is, by agreement of the parties; what amounts will be paid to him; that the parties have no mutual claims against each other, etc. Typically, such an agreement is drawn up in two copies.
When drawing up an agreement, you should pay attention to the employee’s employment contract. If it does not indicate that if an employee is dismissed by agreement of the parties, he will be paid a certain amount of severance pay, then this condition must be included in the employment contract. This is done simply: an additional agreement is drawn up to the employment contract, which states the condition for the payment of severance pay in a certain amount.
The Ruling of the Supreme Court of the Russian Federation dated August 10, 2015 No. 36-KG15-5 provides an interesting situation from a practical point of view: the employee and the employer agreed that upon dismissal, by agreement of the parties, the employee would be paid severance pay; they drew up an agreement to terminate the employment contract by agreement of the parties, where it was stated that severance pay would be paid. And then the following situation develops: the employer dismisses the employee by agreement of the parties, but does not additional agreement to the employment contract and does not pay severance pay. The employee goes to court, and the Supreme Court, examining this case, confirms the legality of dismissing the employee by agreement of the parties without paying severance pay. He considered that since he was saying that other cases of payment of severance pay should be provided for in an employment or collective agreement, which was not the case in this case, but there was only an agreement to terminate the employment contract by agreement of the parties, then everything is legal.
Rules for paying compensation for unused vacation
Upon dismissal, the employee is paid compensation for all unused vacations (). In matters of calculation, counting vacation days that an employee has earned, determining the period for which compensation must be paid unused vacation, the application of the rules for determining this period must be guided by (approved by the NKT of the USSR on April 30, 1930 No. 169).
If an employee quits during the first working year, the rules of clause 28 apply: “When dismissing an employee who has not used his right to vacation, he is paid compensation for unused vacation. At the same time, employees dismissed for any reason who have worked for this employer for at least 11 months, subject to credit towards the period of work giving the right to leave, receive full compensation.”
This rule indicates that if in the first working year an employee worked for 11 months and he quits, then he is entitled to compensation for vacation as for 28 calendar days.
If an employee leaves during his first year of work due to a reduction in staff or headcount, the employer must also focus on. In particular, they say the following:
“Full compensation is received by employees who have worked from 5 1/2 to 11 months if they are dismissed due to the liquidation of an enterprise or institution or individual parts it, reduction of staff or work, as well as reorganization or temporary suspension of work; receipts for valid military service; business trips in accordance with the established procedure to universities, technical schools, workers' faculties, preparatory departments at universities and training courses for universities and workers' faculties; transfers to another job at the suggestion of labor bodies or their commissions, as well as party, Komsomol and professional organizations; revealed unsuitability for work.”
Of all the listed cases, situations with staff reduction are especially common. And usually, employees who were recently hired are subject to layoffs. This raises questions about determining the days for which compensation for unused vacation is due. The answers to them are provided by the Rules on regular and additional leaves - that full compensation must be paid. This is also recalled in.
Clause 35 of the Rules on regular and additional leaves states: “When calculating the terms of work that give the right to proportional additional leave or for compensation for leave upon dismissal, surpluses amounting to less than half a month are excluded from the calculation, and surpluses amounting to at least half a month are rounded up to a full month.” At the same time, when applying clause 35, it is important to remember that since an employee earns the right to leave for a working year, it begins to be calculated from the date of conclusion of the employment contract.
So, for example, if an employee was hired on September 17, 2015 and quits on November 30, 2015, then when calculating the length of service giving the right to leave, the following calculation is obtained: the first month - from 09.17.15 to 10.16.15; second month - from 10/17/15 to 11/16/15; third month - from 11/17/15 to 11/30/15. Since the third month has not been fully worked, compensation for unused vacation is paid only for two months.
Rules for paying bonuses upon dismissal
A bonus is an incentive payment, which is a type of incentive payment. And salary, according to , is remuneration for work depending on a number of indicators (employee qualifications, complexity, quantity, quality and conditions of work performed), as well as compensation payments (additional payments and allowances of a compensatory nature, including for work in conditions that deviate from normal, work in special climatic conditions and in areas exposed to radioactive contamination, and other compensation payments) and incentive payments (additional payments and incentive allowances, bonuses and other incentive payments).
So the premium is integral part wages, and according to this, it should also be paid upon dismissal. But there is one point: the bonus, as a rule, is tied to the result, so it is paid once a month, once a quarter or once every six months. It follows from this that after the end of the period, it is still necessary to collect information for calculating the bonus, issue an order for the bonus, after which the accounting department will calculate the bonus and pay it. In this case, you need to remember about local regulations on remuneration that exist in every organization.
It states that the local regulatory act on remuneration should follow the calculation procedure (specific amount, indicator). And the tax office, having opened the regulations, should see that the size of the premium has been determined.
Some employers set the rules for paying bonuses so that the employee cannot guess how much money he can receive. It usually sounds like this: upon achieving a favorable financial result, at the discretion of the manager, the employee may be paid a bonus, the amount of which is determined by order. At the same time, tax officials talk about a specific amount. And if in local normative act the employer does not state in the preamble that the bonus is paid, for example, based on the results of work for the year and that the employee must be in an employment relationship on the date of the decision to pay this bonus, then the employer will be obliged to calculate this bonus individually for the employee and pay it upon dismissal, without waiting for the end of the financial year and management’s decision on the payment of bonuses based on the results of the year.
During the financial crisis, most companies reduce the number of employees. This procedure can be carried out in two ways. By reducing the number or staff (Clause 2, Part 1, Article 81 of the Labor Code of the Russian Federation) or dismissal by agreement of the parties (Article 78 of the Labor Code of the Russian Federation). Each option has its pros and cons. Therefore, it is better to make the final choice taking into account an assessment of all the circumstances in a particular situation.
Reduction of headcount or staff: there are many risks hidden in a labor-intensive procedure
A staff reduction is a complete elimination of one or more positions in the staffing table. For example, the company will no longer have such a position as assistant secretary. And a reduction in the number of employees means a reduction in the number of staff positions for a specific position: there were five assistant secretaries, but two will remain.
The procedure for dismissal when reducing staff and number of employees is the same. This procedure is multi-stage, and skipping one step may give the employee a chance to subsequently challenge the dismissal in court and be reinstated at work with payment of compensation for forced absence in accordance with Part 2 of Article 394 Labor Code(Clause 29 of the resolution of the Plenum of the Supreme Court of the Russian Federation dated March 17, 2004 No. 2). That is, the slightest mistake can lead to additional costs instead of the planned savings.
ADVICE ON THE TOPIC
If vacant positions are also planned to be reduced, then it is more advisable to do this before notifying employees. Otherwise, if an employee agrees to a vacant position, he will first have to be transferred, and then begin the reduction procedure again.
Step one: selection of candidates for dismissal. It is necessary to make a list of positions that management plans to eliminate and the employees occupying these positions. From their number it is necessary to immediately exclude those who, in principle, cannot be fired due to staff reduction (Article 261 of the Labor Code of the Russian Federation): pregnant women; women with a child under three years of age; single mothers with a child under 14 years of age, and if the child is disabled, then up to 18 years of age; employees raising a child without a mother. From the remaining workers, it is necessary to select those who have the right to preferential retention at work (Article 179 of the Labor Code of the Russian Federation). Firing them is also very risky.
Verification of the pre-emptive right is required in two cases. Firstly, when the number of employees decreases (out of several employees in the same position, some must be fired, and others must be retained). And, secondly, when a certain position is eliminated altogether, but the company remains with positions that are almost homogeneous in terms of the content of the labor function, and are named differently in the staffing table.
First of all, the criteria that determine pre-emptive right employee's "immunity" in case of staff reduction are higher labor productivity and qualifications (Part 1 of Article 179 of the Labor Code of the Russian Federation). While higher qualifications can be confirmed by specialized education and longer work experience, labor productivity in some specialties is difficult to measure. Meanwhile, the lack of a clear justification for why this particular employee was fired (why he is worse than those left behind) may lead to the dismissal being declared illegal. Consequently, if management wants to give preference to a particular employee, but his qualifications cannot be confidently called higher, then it is necessary to think through criteria for comparing the labor productivity of this employee with others, taking into account the specifics of their activities. The results can be presented in the form of comparative characteristics.
If qualifications and labor productivity are the same, then the selection of a candidate for dismissal is carried out according to the “second priority” criteria. Preference is given to those employees who have one of the circumstances specified in Part 2 of Article 179 of the Labor Code. For example, he is fully supported by at least two disabled family members, or all of his close relatives do not have independent income. It seems that in order to establish these circumstances, the company should request from all employees whose positions are expected to be reduced, documents on the composition of family members, their age and social status(whether they work or not, and if not, then for what reasons - retirement age, disability, etc.). With massive layoffs, this is a very labor-intensive process. Since family circumstances of employees may change by the time of dismissal, it is better to re-check the data immediately before layoff to be on the safe side.
Step two: warning employees about dismissal. Two months before the upcoming dismissal, it is necessary to warn about this in writing and against signature of each employee personally (Part 2 of Article 180 of the Labor Code of the Russian Federation). Moreover, the two-month period is counted from the day the employee signed the notice.
The employee’s refusal to sign the notice may make the entire further procedure illegal. Unlike other personnel documents, regarding this warning, the Labor Code does not allow the possibility of replacing the signature with a note indicating that the employee refused to sign.
When candidates for dismissal are selected on the basis of the absence of a preferential right to remain at work for family reasons, it is better to warn about possible dismissal not only them, but also other employees occupying a similar or similar position, who at the time of comparison had reasons for “immunity”. This is necessary just in case, after two months, circumstances change so much that you have to fire someone other than the one originally planned.
The notification must also offer the employee all available vacancies at the company, both according to his qualifications and for lower and lower paid positions (Part 3 of Article 81 of the Labor Code of the Russian Federation). If the company has branches and representative offices, then the employee must be offered a job for vacancies within the “one locality”. For example, for all branches within one city and its region (determination of the Supreme Court of the Russian Federation dated November 3, 2006 No. 5-B06-94). If vacant positions no, then this must be written directly in the notification.
Step three: dismissal and payment of compensation. The head of the company issues an order to reduce the staff or number of employees and approves a new staffing table (form No. T-3, approved by order of the State Statistics Committee of Russia dated 01/05/04 No. 1).
Orders for the dismissal of warned employees are also issued (Parts 1, 2 of Article 84.1 of the Labor Code of the Russian Federation), and the corresponding entries are made in their work books.
On the last day of work, each employee must be paid not only the salary for the last month, but also a special severance pay in the amount of his average monthly earnings, unless a higher amount is established in the labor or collective agreement (Article 178 of the Labor Code of the Russian Federation). If at the end of the first month after dismissal the former employee does not get a job new job, then the company must also pay him for the days of “non-employment” of the second month after dismissal (also in the amount of average earnings). For example, an employee was fired on November 30, 2008. I got a new job on January 19, 2009. On the day of dismissal, he is entitled to severance pay in the amount of average monthly earnings. In addition, the company will have to pay for the period from December 31 to January 18. If the employee in our example does not find a job after two months after dismissal (up to January 31), then the company will have to pay for the second month in full.
If in the third month from the date of dismissal the former employee does not return to work, then the company pays the average monthly salary for this month according to the decision of the employment service. But provided that the employee applied there within two weeks after dismissal. In addition, exceptional reasons are required to pay for the third month - for example, absence from the family former employee any other sources of income (resolution of the Federal Arbitration Court of the Volga District dated 07/05/07 in case No. A12-20261/06). Otherwise, the company has the right to challenge the decision of the employment service in court as a non-regulatory act.
An employee can be fired before the expiration of two months after the warning, provided that he has given written consent (Part 3 of Article 180 of the Labor Code of the Russian Federation). However, in this case, he is entitled to additional compensation - for the period after dismissal until the day when two months expire from the date of notice of dismissal (question 18 from the Review of Legislation and Judicial Practice of the Supreme Court of the Russian Federation for the first quarter of 2007, approved by the resolution of the Presidium of the Supreme Court of the Russian Federation dated 05/30/07).
ADVICE ON THE TOPIC
About upcoming layoffs must be reported in writing to the employment service (clause 2 of article 25 of the Law of the Russian Federation of April 19, 1991 No. 1032-1 “On employment of the population in the Russian Federation”). This must be done no later than two months before the start of the relevant activities, and if reductions will be carried out mass character- in three months. Failure to comply with this obligation in itself cannot cause the subsequent reinstatement of workers, but the company faces a fine of 3 to 5 thousand rubles for this (Article 19.7 of the Code of Administrative Offenses of the Russian Federation).
Dismissal by agreement of the parties: safe, but requires the consent of employees
Dismissal by agreement of the parties has undeniable advantages. Firstly, this dismissal was not initiated by the administration. This means that it is almost impossible for employees to subsequently appeal it in court. Secondly, the procedure is very simple - you just need to sign an agreement setting the deadline for termination of the employment contract. There is no need to notify either the trade union or the employment service. Finally, any employee can be dismissed on this basis - the restrictions established in Article 261 of the Labor Code do not apply in this case.
Dismissal by agreement of the parties (Article 78 of the Labor Code) and dismissal at one’s own request are not identical concepts. In the first case, both parties, and not just the employee, express their will regarding the termination of the employment contract. Therefore, having signed an agreement, an employee cannot later change his mind and refuse to resign, as in the case of dismissal at his own request (Part 4 of Article 80 of the Labor Code of the Russian Federation).
To convince an employee to resign by agreement of the parties, companies usually also pay some kind of “compensation”, although the Labor Code does not provide for such an obligation. It seems that this payment should be no less than what the employee can count on when being laid off, otherwise there is simply no reason for him to leave the company by agreement. However, given that the employee does not need to be notified in advance about dismissal by agreement of the parties, the company will be able to cut its staff faster. This means that, as with layoffs, you won’t have to pay wages for an extra two months before dismissal and maintain jobs. But we emphasize that savings are possible only if the employee is satisfied with the amount offered by the company.
True, when choosing more economical option It is also necessary to take into account that it is safer for the company to pay “compensation” by agreement of the parties at the expense of net profit. Tax authorities often insist that they cannot be included in expenses that reduce tax base for income tax (as opposed to compensation for staff reduction, which is directly listed among labor costs in paragraph 9 of Article 255 of the Tax Code). The fact is that this payment is not named in the Labor Code and is related to the termination of the employment contract, and not to remuneration. In fact, this is a controversial issue. For example, the Russian Ministry of Finance believes that compensation can be included in expenses if it is provided for in an employment contract (letter dated September 26, 2008 No. 03-03-06/1/546). However, the courts are still supporting the tax authorities (rulings of the federal arbitration courts of the Moscow District dated April 16, 2007 in case No. KA-A40/2100-07, Far Eastern District dated December 12, 2007 No. F03-A24/07-2/5014).
If the company has a trade union, it also needs to be warned about staff reductions
This is a mandatory stage, due to non-compliance with which the court may declare the reduction illegal (clause 24 of the resolution of the Plenum of the Supreme Court of the Russian Federation dated March 17, 2004 No. 2). The employer must notify the trade union in writing about the upcoming layoffs no later than two months before the start of the relevant measures, and if the layoffs are massive, three months in advance (Part 1 of Article 82 of the Labor Code of the Russian Federation ). According to the definition of the Constitutional Court of the Russian Federation dated January 15, 2008 No. 201-O-P, the “beginning of activities” is considered to be the beginning of termination of employment contracts with employees. That is, the trade union must be notified simultaneously with the warning to employees, and if mass layoffs are coming, then a month before notifying employees.
General criteria for mass layoffs are determined in sectoral and territorial agreements between employers and trade union organizations (the procedure for their conclusion and operation is established in Articles 47 and 48 of the Labor Code). If the company has a trade union, it must also be warned about staff reductions.
Which dismissal option to choose?