Dismissal of Heads of Representative Offices of Foreign Companies Operating in Russia.
1.      Signed by a foreign company of fixed-term employment contracts with the head of its representative office accredited in Russia is a common practice.
In compliance with Article 17 of the Labor Code of RF a fixed-term employment contract is concluded only in those cases when employment relations cannot be fixed for an indefinite period in view of the nature or conditions of the work pending, or the employee’s interests, as well as in cases expressly provided for by the law.
The Russian judicial rulings show that the courts, despite a fixed term stipulated in an employment contract, qualify the contract concerned as a contract signed for an indefinite period, unless the employer has proved the existence of the above grounds for conclusion of a fixed-term contract. In this connection, when the employer concludes an employment contract, or the court considers a dispute over an employment contract already concluded, the employer should justify that the nature of the representative office head’s work, the terms and conditions of such work do not allow to conclude a contract for an indefinite period.
Besides, it may be asserted that a high salary fixed for the head of the representative office is conditional upon a fixed-term contract, i.e. the employment contract is concluded for a fixed term in the interests of the head of the representative office.
It should be noted that the absence in the employment contract of a detailed definition of rights and duties of the representative office head complicates proving of existence of the circumstances in which the Russian labor legislation permits to conclude a fixed-term employment contract.
2.      Para 1, Article 254 of the Labor Code of RF sets forth that an employment contract may be terminated in case, in particular, of a one-time gross violation of office duties by the head of a company, institution, organization (branch, representative office, bureau, or another separate unit) or by his deputies.
Another possible ground for termination of the employment contract on the initiative of the management, as specified in para 3, Article 33 of the Labor Code of RF, is a systematic failure on the part of an employee to fulfil his duties assumed under the employment contract or pursuant to internal labor regulations without a valid cause, if previously the employee concerned was publicly disciplined.
However, when analyzing the possibility to apply the above rules to dismiss the head of the representative office, the following should be taken into account.
In para 39 of the Resolution dated 22.12.1992, # 16 On Certain Issues of Application of Legislation by Courts of RF in Resolving Labor Disputes the Plenary Session of the Supreme Court of RF explained that dismissal of the head of the representative office, in particular, for one-time gross violation of office duties, pursuant to para 1, Article 254 of the Labor Code, or dismissal of an employee for a systematic violation of labor discipline is a disciplinary action. Hence, dismissal on the above grounds is admissible only within one month following discovery of a misdeed, without taking into account the time the employee concerned was ill or on leave, and not later than within six months after the misdeed was committed, and if the misdeed was revealed as a result of an audit - not later than within two years following commitment of the misdeed. This conclusion is based on Article 135 of the Labor Code of RF wherein dismissal pursuant to para 1, Article 254 or para 3, Article 33 is regarded as a disciplinary action, as well as on Article 136 of the Labor Code of RF, which sets forth the necessity to observe the above periods.
If the periods concerned have not been observed, the dismissal would be illegal.
An additional reason why para 3, article 33 of the Labor Code of RF cannot be applied may be the absence of disciplinary actions previously duly applied to the head of the representative office. As follows from Article 136 of the Labor Code of RF, a disciplinary action is applied following a respective order or resolution indicating the motives of its application and is notified to the employee concerned who acknowledges such notification by signing for it. Prior to the disciplinary action a written explanation should be requested from the employee concerned.
It should be also taken into account that in compliance with Article 137 of the Labor Code of RF in case the employee is not disciplined again within one year following the disciplinary action, he is deemed as not having been subject to a disciplinary action. Therefore, dismissal pursuant to para 3, Article 33 of the Labor Code of RF is possible maximum within one year following a previous disciplinary action.