Several significant amendments have been made to the Labor Code of the Republic of Azerbaijan. The amendments, which came into effect on August 12, 2024, primarily address innovations in the establishment and termination of labor relations.
According to these amendments, additional responsibilities have been added to the key duties of employers. Employers are now required to ensure timely and full payment not only for compulsory medical insurance but also for mandatory state social insurance, unemployment insurance, and compulsory insurance against loss of occupational ability due to accidents and occupational diseases at the workplace.
Furthermore, the labor legislation introduces a new concept of "staff (staff unit)." A staff unit is defined as a unit that reflects the job title and salary in a table created in the centralized electronic information system of the Ministry of Labor and Social Protection of the Population of the Republic of Azerbaijan or, in cases prescribed by law, in a paper-based document. With the introduction of this concept, the employer's key duties now include entering the staff units into the electronic information system according to the structure, hierarchy of professions, and positions.
The form of employment contracts has also been amended. Employment contracts, except for those that must be concluded in written form with certain positions as required by labor legislation, are now concluded in electronic document form. Positions such as those elected or appointed by the Milli Majlis (Parliament) of the Republic of Azerbaijan, appointments made by the President of the Republic of Azerbaijan or by the Cabinet of Ministers at the President’s instruction, and positions held by civil servants with special ranks in the Prosecutor's Office, Justice, Emergency Situations, Migration Service, Internal Affairs, Customs, Tax Authorities, and diplomatic positions in the Ministry of Foreign Affairs, as well as civil employees engaged in intelligence and counterintelligence activities, are required to have employment contracts in written form.
Labor relations in family farming and family enterprises are regulated by electronic employment contracts as stipulated by this law.
When amendments are made to employment contracts concluded in electronic form, the original contract must be re-prepared and approved. The transition of employment contracts concluded before the date these changes came into effect to electronic document form will be carried out in phases as determined by the Cabinet of Ministers of the Republic of Azerbaijan.
The recording of these employment contracts, amendments made to them, orders (instructions, decisions) related to them, as well as other orders (instructions, decisions), the recording of information about the employee’s work activity, and the archiving of this information are all ensured through the electronic information system. Until the relevant legislative amendments, the provision of information that should be reflected in payroll documents was also ensured through the electronic information system.
Accordingly, when such an employment contract is concluded, employees are only required to present their identification card. Only individuals who must conclude written employment contracts as prescribed by law must additionally present their work-books. Furthermore, employers are prohibited from requesting documents that can be obtained from relevant state information systems and databases.
An interesting and systematic change is the abolition of norms regulating the collective conclusion of employment contracts and the respective abolition of such employment contracts.
Another change in labor legislation is the abolition of the concept of an employment contract notice. Accordingly, labor relations are now considered to have arisen when the employment contract is concluded in electronic document form in the electronic information system, not when the employment contract notice entered into the electronic information system using an enhanced electronic signature is registered and electronically notified to the employer. This change is also reflected in the rules regarding the legal effect of employment contracts. Except in cases prescribed by law, an employment contract or its amendment is considered concluded and comes into legal force when it is signed with an enhanced electronic signature by the parties from the date of the last signature. The first employment contract to be concluded with individuals specified in the application for the electronic state registration of a limited liability company, according to the relevant law, is automatically formed in electronic document form based on the transmission of information about labor relations between the registered employee and the employer in the electronic information system of the State Tax Service, and it is signed by the parties with an enhanced electronic signature no later than three (3) working days from the date of formation. In this case, the employment contract comes into legal force from the moment the state registration certificate, extract from the state register, and the company’s charter are sent to the company’s electronic cabinet.
Another amendment allows either party to terminate the employment contract during the probation period by notifying the other party not only on paper but also through the electronic information system three days in advance. Additionally, if the employer changes the terms of employment, the employee can terminate the employment contract by observing the appropriate notice period, withdraw their application, and in other cases notify the other party through the electronic information system.
Termination of the employment contract comes into legal force from the date the relevant order (instruction, decision) is entered by the employer into the electronic information system and signed with an enhanced electronic signature. The termination date of the employment contract cannot be set earlier than the date the order (instruction, decision) on the termination is signed (except in cases provided for by law).
Changes have been made regarding the termination of fixed-term employment contracts. The notice period for terminating a fixed-term employment contract has been set at a minimum of one week before the expiration of the contract. If neither party informs the other of the termination of the contract due to the expiration of the term, either on paper or through the electronic information system, the employment contract is extended for the period specified in the contract or considered indefinite in cases prescribed by law. If the employee is notified in accordance with the law, the employer may terminate the contract on the day the employee returns to work if the term of the fixed-term employment contract expires during the employee’s absence for valid reasons. The norms related to the work-book, as well as the requirement to provide the work-book on the last working day, apply only to individuals who must conclude employment contracts on paper as prescribed by law.
According to the amendments, the employer may specify procedures for documenting the termination of the employment contract with the employee that differ from the procedures prescribed by law. If such procedures are not provided, then the termination of the employment contract, whether initiated by the employee, the employer, or due to circumstances beyond the control of the parties, must be formalized by the employer’s justified order (instruction, decision) in accordance with the grounds and procedures prescribed by law. When terminating employment contracts concluded in electronic form, the employer's order (instruction, decision) is signed with an enhanced electronic signature in the electronic information system and placed in the employee’s electronic cabinet created in the information system. Several changes have also been made to the content of the order on the termination of the employment contract.
Amendments have been made to the model form of the employment contract. According to the changes, clause 1.1 of the employment contract is presented in a new edition. Information regarding the employer, if they are a physical person, such as the insurance payer's registration number (SUN), social insurance number (SSN), the name of the identification document, its series, number, issuance date, and the name of the authority that issued the identification document has been removed. From the employee's information, details such as citizenship, the name of the identification document, its series and number, issuance date, and the name of the issuing authority, as well as education, qualification, profession, and the name of the educational institution graduated from, have also been removed. Additionally, the social insurance number (SSN) has been excluded for employees whose employment contracts are executed in electronic document form.
The model form of the employment contract has also been updated with coordination-related amendments in line with the changes in this law.
