Downtime as a way to optimize costs

We would like to draw your attention to the fact that the Labor Code of the RF provides for the opportunity of introducing the downtime – temporary suspension of work due to economic, technological, technical or organizational causes. However we recommend to comply with certain requirements in order to ensure that the downtime is not to be challenged by the employees.

1. It is necessary to issue an order and indicate the following information there:

the scope of persons affected by such an order: organization, subsidiary, department;
the reasons for the downtime introduction;
the time of downtime introduction and its end;
the amount of payment for downtime;
the order requiring employees to remain at their workplaces or exempting them from the duty to be present at their workplaces during the downtime.

It should be taken into account that the legislation does not specify the exact reasons for the downtime but they should be documented. In case of a dispute, it is the employer who is obliged to prove them.

The downtime is temporary, so exact dates should be specified. The period of its introduction can be extended.

In addition, it should be noted that the amount of payment for downtime depends on reasons of its introduction. A period of downtime due to reasons not dependent on the employer and the employee shall be remunerated in an amount of not less than two-thirds of the tariff rate, salary (official salary) calculated pro rata to the downtime duration. A period of downtime due to the employer's fault shall be remunerated in the amount of not less than two-thirds of an employee's average salary (Article 157 of the Labor Code of the RF). The amount of average salary and the official salary may differ significantly, so the decision on the ground of downtime should be considered carefully with regard to company's documents that can prove its causes.

2. The employee should be familiarized with the order in writing against his signature.

3. If the downtime is introduced with regard to all employees and production is suspended, the employer is obliged to notify the government employment services in writing within 3 days from the date of order. For this purpose, it is necessary to fill out the form, approved by the Order of the Ministry of Labor of the RF as of 26.01.2022 No.24, where the following information should be indicated: about the employer, reasons and period of production suspension, the average number of employees at the time of production suspension and other information. If the measures are introduced in a subsidiary, representative office or another structural subdivision, the information is submitted to the government employment service at their location.

The employers often do not take these features into account, so in case of a dispute courts satisfy the employees' demands to consider the order on downtime as illegal and to recover salary arrears.

We would be glad to provide you the relevant recommendations enabling you to choose the way to optimize personal costs in the current economic situation.