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Law limiting compensations to top managers in state-owned companies

April 2, 2014

Vladimir Putin signed Federal Law On Amendments to the Labour Code of the Russian Federation to Regulate the Size of Severance Payments, Compensations or Other Payments Made to Certain Categories of Employees Upon Termination of their Labour Contracts.

The Federal Law introduces amendments to the Russian Labour Code so as to limit the size of severance payments, compensations or other payments upon termination of labour contracts with senior managers of state-owned corporations and companies, state extra-budgetary funds of the Russian Federation, state and municipal enterprises, and commercial partnerships when more than 50% of their registered capital is under state or municipal ownership.

The total amount of such payments shall not exceed three times the average monthly salary of these employees.

Severance payments, compensations and other payments upon termination of labour contracts of such employees shall not be paid in cases when labour contracts are terminated by agreement of the parties or following disciplinary action.

April 2, 2014