Work and an employment contract in Armenia: how to legalize and not be deceived?

From this article, you will learn everything about the employment contract in Armenia, the relationship between employers and employees, the rules for layoffs, vacation and sick leave, and you will also be able to compare the features of the RA labor legislation with the Russian Labor Code. And we will also tell you how most often employers in Armenia deceive employees and what to do to protect themselves from such unpleasant situations.

On February 18-19, 2023, the Move2Armenia team held two job fairs — JOBHUB FAIR and "Career not in IT", which were attended by more than 4500 people. We hope that you were among them and received great job offers! If so, now is the time to figure out how the labor legislation is structured in Armenia and get acquainted with the sample of the Armenian employment contract, which was specially prepared for this article by a consulting company. Move2Business.

Labor Code in Armenia

In the Republic of Armenia, as well as in the Russian Federation, relations between employees and employers are regulated by the Labor Code; it sets the basic rules. In addition to the Labor Code, the regulators are the Constitution, the Civil Code and the Administrative Code, the last two, for example, establish fines. The Russian translation of the RA Labor Code (unfortunately, not the most current version) can be studied link. In general, there are no radical differences from its Russian counterpart. The RA Labor Code talks about the rights and obligations of the parties, the algorithm for concluding and terminating contracts, work schedules, vacations, sick leave, etc. The Labor Code stipulates who can work, at what age and in what position, and explains the features and working conditions for most possible non-trivial cases. 

A nice bonus for the employee: any paragraphs of the TD that worsen the position of the employee and are not provided for in the Labor Code of the Republic of Armenia can be challenged in the event of a lawsuit. In such cases, the law will not be on the side of the employer.

A work permit is not required for citizens of the Russian Federation.

Armenia signed intergovernmental agreements regarding the regulation of the free movement of labor with the EAEU countries — RF, Belarus and Kazakhstan. This agreement implies that each of the parties recognizes (without legalization) certificates and other documents on education, documents on qualifications, titles and other similar documents necessary for carrying out labor activities, and their translations, certified in the prescribed manner in the territory of the state that issued document.

However, there are areas in which foreigners cannot work: so, only a citizen of the Republic of Armenia can be a civil servant. And those who apply for employment fall under the exception pedagogical, legal, medical or pharmaceutical activities in another member state of the EAEU. It turns out that lawyers, teachers, doctors and pharmacists from the Russian Federation will have to go through the procedure for recognizing education documents, after which it will be possible to legally engage in their professional activities.

Let us confirm: citizens of the Russian Federation do not need any special work permit; they have the right to work in the Republic of Armenia under the same conditions and in the same manner as citizens of the Republic of Armenia  (except for those professional areas that we wrote about above).

With official employment with at least 10 years of work experience and provided that the employer pays stamp duty and social contributions for the employee, you can count on a pension in Armenia.

And the fact of employment with a local employer is one of the grounds for obtaining a residence permit.

You can work in Armenia from the age of 14, but subject to reduced working hours: for workers aged 14 to 16 years - 24 hours a week; from 16 to 18 years old - 36 hours per week. For employment, teenagers will need written consent of one of the parents, adoptive parent or guardian.

Employment contract in Armenia

So, you went through a series of interviews and finally received an offer; you have agreed with your future employer on the amount of wages and conditions that suit both parties. And now the time has come to sign the employment contract.

In Armenia, an employment contract is concluded before going to work. As a rule - in one day, because the employer must have time to warn the tax office - send a notification to the appropriate department about the exit of a new employee. Thus, two different dates are fixed in the contract: the date of its signing and the day of going to work.

What documents are needed?

Passport (can be a foreign one, or an internal passport of the Russian Federation), social number, local bank account details (if employment is in Yerevan), diploma (on request).

There is no work book in the usual sense in Armenia; it exists only in electronic form and is created automatically. Its purpose is to record length of service and the very fact of work.

Why do we need an employment contract at all and what, in fact, should be reflected in it?

If the Labor Code is responsible for general regulation for the parties who have an employment relationship, the employment contract records the agreement between the employer and the employee, according to which the former provides the latter with work and pays wages for it. In return, the employee undertakes to work conscientiously and comply with labor regulations, personally engage in his tasks and not delegate them to others. The parties enter into an employment contract in order to be sure that their rights are protected, and the conditions will be met stably and without surprises.

As a rule, while everyone is happy - the employee fulfills his duties, and the employer pays wages on time - most people do not even think about studying the main working document. An employment contract is usually remembered in non-trivial situations - when a salary is delayed or, for example, an upcoming layoff.

What must be included in an employment contract?

The data that must be indicated in the employment contract are prescribed in the Labor Code of the Republic of Armenia. 

This document has two sides: the employer, which can be an individual, organization or individual entrepreneur, and the employee, who is exclusively an individual.

According to the Labor Code, there are several types of employment contracts. An employment contract is concluded for a specific period or an indefinite period (open-ended contract). A fixed-term employment contract can turn into an open-ended one. Fixed-term contracts cannot be concluded with key specialists. The main specialist — is, for example, an accountant in consulting agency, agronomist at a winery, cook at cafe and so on.

An employment contract must comply with mandatory rules (imperative norms, that is, those conditions that are not subject to change at the initiative of either party), certain laws or other regulatory legal acts at the time of its conclusion.

The contract is drawn up in writing without notarization and signed by both parties; the seal is not required by the RA law, but it happens that it is present.

Now let's dwell on all the points in more detail. The employment contract has essential conditions, which include: place of work, the amount of remuneration and (or) the procedure for determining it, benefits, working hours (work and rest), categories and names of positions, type of employment contract, in the event of a change in which the employer is obliged to notify the employee within the time limits, defined by Article 115 of the Code, except for the following cases:

• if the basic salary and (or) additional payments, bonuses are increased subject to other conditions,
• as well as in the event of a reduction in daily and (or) weekly working hours, subject to other conditions.

The Code also defines the procedure for changing material conditions, which involve variables such as changes in production volumes and working conditions. Situations such as raising a child and contraindications to a specific job for health reasons, as well as changes in wages are touched upon. If it is impossible to maintain the previous essential working conditions and there is no written consent of the employee to continue working under new conditions, the employment contract is terminated in accordance with paragraph 9 of part 1 of Article 109 of the Code.

Wage

Salaries are calculated monthly and paid to the employee on working days. Payment is made at least once a month (sometimes more often) until the 15th of the next month. Salaries are paid in Armenian currency - drams, in cash or non-cash form. However, in Yerevan it is illegal to pay fees in cash, exclusively by bank transfer to a bank account.

The salary may include not only the basic salary, but also additional earnings - allowances, bonuses and rewards. Salary cannot be lower than the minimum monthly and hourly wages, which is established Law of the Republic of Armenia “On the Minimum Monthly Wage”. The minimum monthly salary in Armenia is AMD 75,000.

Mode of work and rest, vacation

Normal working hours are 40 hours per week (maximum 8 hours per day). Overtime work cannot exceed 48 hours per week and 12 hours per day.

Workers have a five-day work week with two days off. In organizations where, due to the nature of production or other conditions, it is impossible to work five days, a six-day working week with one day off is established.

The employment contract specifies the conditions and nature of the rest time: 

1) a break for rest and food;

2) additional and special breaks for rest during the working day (shift);

3) consistent rest between working days (shifts);

4) weekly consecutive rest;

5) annual rest (non-working holidays and memorable days, vacation). 

Annual leave, as a rule, is granted after six months of continuous work in this organization, with the exception of part-time employees. 

The minimum vacation period is 20 working days for a five-day working week and 24 working days for a six-day working week.. A collective or labor agreement or a legal act of the employer may establish holidays of a longer duration, with the exception of organizations financed from the state and municipal budget, the Central Bank of the Republic of Armenia. By agreement of the parties, annual leave may be granted in installments. In the case of granting annual leave in parts, one part of the annual leave must be at least 10 working days for a five-day working week and at least 12 working days for a six-day working week. Annual leave may have a minimum duration, be extended or additional, as well as targeted. 

Target leave has the following reasons:

1) maternity leave;

2) leave granted to care for a child under the age of three;

3) study leave;

4) leave granted for the performance of state or public duties;

5) unpaid leave;

6) parental leave.

Temporary disability

Employees who have suffered an occupational disease and loss of ability to work, or who have lost it temporarily, are provided with the following guarantees established by law: the workplace and position are retained until his or her ability to work is restored or the disability group is determined, and after the employee is recognized as disabled, you can contact the employer with an application for adjustments for proper implementation their work duties, or about transferring to another job with the same employer in the manner established by the legislation of the Republic of Armenia. Employees who become temporarily disabled retain their job and position if, due to temporary disability, they have not been to work for no more than 120 days continuously or no more than 140 days in the last twelve months, unless the law and other regulatory legal acts It has been established that in case of certain diseases, the workplace and position are retained for a longer period. During this period, the employer does not have the right to terminate the contract on its own initiative.

How are employees fired in Armenia?

An employment contract may be terminated for the following reasons:

1) by agreement of the parties;

2) in case of expiration of the contract;

3) at the initiative of the employee;

4) at the initiative of the employer;

5) in the event of an employee being called up for fixed-term military service;

6) in the presence of a court decision that has entered into legal force, in accordance with which the employee is held liable, making it impossible to continue working;

7) if the employee is deprived of the right to perform certain work in accordance with the procedure established by law;

8) if the employee is under sixteen years of age and one of the parents, adoptive parent or guardian or custodian, a doctor supervising his health, or an inspection body requires termination of the employment contract;

9) when essential working conditions change;

10) in case of death of the employer-natural person;

11) in case of death of an employee;

12) in case of unreliability of information provided by the employee in accordance with paragraphs 3 and (or) 4 of part 1 of Article 89 of the Labor Code when hiring;

12.1) based on the results of a probationary period determined by agreement between the employee and the employer;

13) in case of concealment by the employee of the fact of deprivation of his right to perform certain work when hiring.

The Labor Code protects the rights of employees in cases of illness, work-related injuries, pregnancy, or caring for children under 3 years of age. Guarantees are valid even if they are not provided for in the employment contract.

The trial period may last a maximum of three months, the minimum being determined by the parties. During the probationary period, an employee can be fired with two days' notice unilaterally.

If three months of work have passed and nothing happens, then it is automatically considered that the contract is extended and is valid indefinitely. 

They get acquainted with the internal labor regulations before signing or at the time of signing the contract. The work schedule must be written in the TD.

The responsibilities of the parties are specified in the Labor Code, employment contract or local regulations.

Where to go if your rights as an employee are violated?

Legal support and clarification is provided by the Ministry of Labor and Social Affairs, where you can clarify the legality of certain actions (telephone 114). As well as the Ministry of Health, if the incident involves causing harm to health. A dispute between an employee and an employer over infringed rights can be resolved through a court or a labor commission. 

And at the end of 2022, the Intergovernmental Labor Inspectorate was formed, where you can complain about working conditions and failure to fulfill obligations under the Labor Code and Labor Code. MIT can initiate inspections, thanks to which the number of unscrupulous employers who do not want to formalize an employee is rapidly decreasing.

How do Armenian employers most often deceive their employees?

Probably the most basic and frequent case that one can encounter in practice is that the employer is in no hurry to conclude an employment contract or even immediately warns that he does not plan to do this and offers to work “on his word of honor.” As a rule, such cases are motivated by reluctance to pay taxes for an employee.

If such an unpleasant incident happened to you, we advise you to be sure to record all the facts confirming your working relationship. This could be, for example, correspondence between you and the employer, both in mail and on social networks, and in special applications like Slack, Trello, Notion, Asana, and so on. Keep evidence that the work was completed by you. You can contact the Intergovernmental Labor Inspectorate with such a database.

Work that is performed without concluding an employment contract, despite the presence of signs of an employment contract, is considered illegal. No liability is provided for illegal employees, sanctions are imposed in this case on an unscrupulous employer who will have to pay fine for failure to register an employee in the amount of twelve times the minimum wage - 900,000 drams.

The limitation period for violated labor relations is three years, but only when these violations are not directly related to life, health and quality of life. Otherwise, the prescription will be 10 years and more than 10 years.

Is it possible to legally fix an employment relationship in any other way, except for an employment contract?

For example, through a service agreement with an individual. It differs from labor in that the employer has no obligation to the employee to issue vacation and sick leave, as well as various types of payments and benefits. If the employment contract calculates length of service and specifies local regulations, as well as the minimum wage, then under a service agreement with an individual this is not the case. Also, according to an employment contract, the employee must perform the work personally, while in a service contract, the result is important, and not who will be the direct performer.

The material was prepared with the support consulting company Move2Business.