11.12.2020 — Supreme Court: Bankruptcy is Not Obstacle to Early Termination of Lease Agreement and Seizure of Leased Property from Bankrupt Tenant

In one recent case the Supreme Court came to conclusion that the initiation of bankruptcy proceedings in respect of the bankrupt tenant does not deprive the landlord of the right to early terminate the lease agreement and claim for return of the leased property. However, under certain conditions such actions of the landlord may be recognized as an abuse of rights, and the landlord claims can be dismissed.

In the case considered by the Supreme Court the bankruptcy manager of the bankrupt tenant filed a lawsuit against the landlord to challenge the unilateral early termination of the land lease agreement by the landlord. The lower courts granted the claims due to the fact that the landlord was the shareholder of the bankrupt company, and therefore the unilateral termination of the lease agreement was a related party transaction. Moreover, the courts decided that the lease rights could be sold at auction during the bankruptcy proceedings, as the lease agreement did not prohibit the assignment of rights and obligations under it to a third party.

However, the Supreme Court rejected this approach, explaining that the initiation of bankruptcy proceedings in respect of the tenant cannot automatically deprive the landlord of the right to early terminate the lease agreement. Therefore, the property was to be returned to the landlord, and lease rights could not be included into the bankruptcy estate of the tenant and used as its asset to satisfy the creditors’ claims in the bankruptcy proceedings. At the same time, the Supreme Court left open the possibility for the court to recognize such actions of the landlord as an abuse of rights, provided that the creditors or the bankruptcy manager prove the relevant circumstances and provide necessary evidence (Ruling of the Russian Supreme Court dated 05 November 2020 No. 303-ЭС16-19972 (2) in the case No. А73-5433/2014).

08.12.2020 — From 1 January 2021 New Rules Governing Remote Work Will Enter into Force

The adopted amendments to the Labour Code of the Russian Federation provide for the detailed rules governing remote working for employees. The amendments establish the procedures for exchange of documents, the grounds for the shift to remote work and the rules of organization of the work and special aspects of dismissal of remote employees.

The new rules establish three regimes for remote working: on a full-time basis, on a temporary basis for a period not exceeding 6 months, and combination of remote work and office work. The employer is entitled to shift personnel to remote work upon the adoption of the relevant decision by the state authorities or the occurrence of emergency endangering normal life of the population (in particular, an epidemic).

Moreover, the employer is obliged to provide remote employees with all necessary equipment, and if the employee uses his or her own or leased equipment, the employer is obliged to reimburse the respective expenses to the employee. In addition to the general grounds for dismissal, remote employee can be dismissed if the employee does not respond to the employer’s requests for more than two consecutive working days without a valid reason.

Remote working shall not be a ground for a salary reduction. If it is impossible to shift the employees to remote work due to the specifics of the company’s activities, the employer is entitled to declare the down-time subject to compensation of two-thirds of a salary.

The company may establish additional rules of remote work in its by-laws, as well as in a collective agreement with employees or individual employment contract.