Many entrepreneurs prefer to conclude a civil contracts instead of labor contracts for some tax reasons, but when studied carefully, it becomes evident that such contracts are designed to create a labor relations between the respective parties. It leaves a room for manipulation of law by entrepreneurs, thus the labor contract conditions had to be redefined. New law had been passed on 7th of May 2021 prohibiting signing civil contracts for the purpose of labor relations between employer and employee.
New section (section4-1.) had been added to the definitions clause (clause 3) of the Labor code for defining the term “Labor relations” as following:
“4-1. Labor relations – the performance of a paid job function by the employee in the workplace where he / she was hired (appointed), selected, reinstated, in accordance with the obligations provided for in labor legislation, collective agreements and contracts, based on mutual agreement with the employer, internal disciplinary rules, provision by the employer of working conditions, guarantees and labor protection of the employee, as well as the principles of this Code.”
According to the new amendments, the contract is considered to be the labor contract in below mentioned cases:
- if the content of the contract complies with Part 2 of Article 43 of this Code, and the form in accordance with the form established by Part 2 of Article 44 of the Labor Code;
- when a labor book is submitted for the registration of relations between the parties and making relevant notes in accordance with Article 48 of the Labor Code;
- if the relationship between the parties arises in connection with the admission (appointment) to the relevant profession or position, including paid election or appointment, as well as holding a position on a competitive basis, employment on a quota basis, reinstatement by a court decision;
- if the relationship between the parties arises in connection with the performance of work (services) related to the main field of activity of the employer;
- if the relations between the parties arise in connection with the performance of works (services) on basis of a substitute or temporary replacement;
- if the extension of the contract is regulated in accordance with Article 73 of the Labor Code;
- if the work (service) is of a temporary nature due to the conditions of its performance;
- if the composition of the remuneration paid for the work (service) performed consists of a monthly tariff (position) salary, supplement and bonus specified in part 3 of Article 157 of the Labor Code;
- if the contract provides for the regulation of issues provided for in Articles 10, 77, 112, 179 and 186 of the Labor Code.
Documentation of the above mentioned relations between employer and employee with civil contract is prohibited.
This article was published by the labor law experts of Baku Attorneys & Consultants, an Azerbaijani law firm, which is strongly specialized in and rendering various services on corporate law to foreign and local business in Azerbaijan. Please, feel free to reach us via www.batco.az in case you have further questions or need advice on any other aspects on Azerbaijani labor law, as well as, provision of legal services on business, migration, contracts and other related matters.