How do you terminate an employee in Russia in 2026?

Russia has no pay-in-lieu-of-notice concept in the same sense as UK law, but Article 180(3) allows the employer to terminate before the notice period ends by paying the employee their average salary for the remaining notice days. This early-termination payment is separate from statutory severance.

Fixed-term contracts require 3 days advance notice of non-renewal. If the employer fails to give that notice, the contract automatically converts to an indefinite-term contract under Article 79 of the Labor Code.

Probation periods are capped at 3 months for most employees, extended to 6 months for heads of organisations and their deputies, chief accountants, and heads of branches. No probation clause is permitted for contracts shorter than two months.

Lawful dismissal grounds under the Labor Code include the following categories:

• Mutual agreement (Article 78): employer and employee agree in writing to end the contract on agreed terms. The most flexible route and commonly used in Russia.
• Expiry of fixed-term contract (Article 79): employer gives 3 days notice of non-renewal.
• Employee initiative (Article 80): voluntary resignation with 14 days notice.
• Redundancy of position or company liquidation (Article 81(1) and 81(2)): genuine elimination of the role or closure of the entity, with 8 weeks notice and statutory severance.
• Systematic misconduct (Article 81(5)): repeated failure to perform duties where the employee already has an active disciplinary sanction.
• Single gross misconduct (Article 81(6)): covers absence without good reason, appearing at work under the influence of alcohol or narcotics, breach of confidentiality, safety violations causing serious consequences, and theft.
• Failure to pass probation (Article 71): employer informs the employee in writing of the reasons, with 3 days notice before the probation end date.

Protected categories exist across all grounds. You may not dismiss an employee on sick leave or annual leave (except in the case of full liquidation). Pregnant employees and mothers of children under three cannot be dismissed on employer initiative, other than on full liquidation. Trade union members dismissed for redundancy or misconduct have additional procedural requirements including prior union notification.

Claim window: a dismissed employee must file a challenge within 3 days0 days of receiving the dismissal order (Labor Code Article 392 sets a one-month window). Courts treat this strictly.

1. Identify a lawful ground

   Anchor the dismissal to a specific ground in the Labor Code exhaustive list. Grounds outside that list cannot support a valid dismissal, regardless of the facts.

2. Notify the employee in writing

   Issue a written notice to the employee specifying the reason and the termination date. For redundancy the notice window is 8 weeks; during probation it is 3 days.

3. Notify the employment authority and trade union

   For redundancy and mass-dismissal events, send parallel written notice to the state employment authority and any trade union at least 60 days before the first dismissal.

4. Offer available vacancies

   Before finalising a redundancy, offer the employee any vacant positions in the organisation that match their qualifications. Document the offer and the employee's response.

5. Settle all sums on the last day

   On the last working day, pay all wages, accrued vacation compensation, and any severance due. Delay from the last day triggers statutory interest under Labor Code Article 140.

The maximum total exposure for the employer is 3 months of average monthly salary. Employers may pay the second and third month amounts as a lump sum of two months on dismissal day, discharging the job-search obligation in full. Many Russian employers take this route to achieve a clean separation.

Average monthly salary is calculated over the previous twelve calendar months under Labor Code Article 139. Employees on fixed-term contracts shorter than two months receive no severance beyond their notice entitlement. Seasonal workers have a separate regime.

Tax treatment

Severance payments within a threshold set by the Tax Code are exempt from personal income tax and social contributions. Where severance exceeds the exempt threshold (which varies based on the employee's average earnings), the excess is taxable. The cache does not hold a confirmed exempt ceiling figure; the employer's payroll team should calculate this per the Tax Code for each dismissal.

No works-council approval gate exists in Russian law. The trade union notification requirement for collective redundancies is procedural: the union may comment and request reconsideration, but cannot veto redundancy decisions. For dismissal of an individual trade union member on conduct or redundancy grounds, the employer must also consult the union before issuing the dismissal order.

Individual redundancy notices must be issued at the same time as the employment authority and union notifications. Each affected employee receives a personal written notice citing the specific redundancy ground, and the employer must offer any available vacancies matching the employee's qualifications before finalising the redundancy.

Protected categories during mass events: pregnant employees and employees on maternity or childcare leave cannot be made redundant during a collective restructuring (except full company liquidation). Any plan that affects these employees requires separate legal handling.

A mutual-agreement termination requires a signed written agreement that sets out at minimum: the agreed termination date, the amount of any compensating payment (if any), and the basis for the settlement. Once signed, neither party can unilaterally withdraw without the other's consent.

Why mutual agreement is common in Russia:

• It avoids the procedural requirements of a disciplinary or redundancy route.
• The agreed compensation can be structured efficiently from a tax perspective, to the extent permitted by the Tax Code.
• Courts treat properly documented mutual agreements as conclusive: a subsequent unfair-dismissal challenge almost always fails if the agreement wording is sound.
• The employee can receive payment on terms they helped negotiate, rather than statutory minimum only.

All sums agreed must be paid on the last working day under Labor Code Article 140. If the amount is disputed, the undisputed portion must still be paid on that day; the disputed balance follows resolution. Delay from the first day beyond the last working day triggers statutory interest at 1/150 of the Central Bank key rate per calendar day.

The mutual-agreement route does not remove the employer's obligation to pay accrued annual leave compensation on the last working day, regardless of the reason for termination.

Real HR and legal experts manage your Russia employment from offer letter through every payroll run and year-end filing. An actual person, not a ticket queue, handles the calls that matter. There is no setup fee and no exit fee, and employer cost passes through at cost, itemised on every invoice.

The split of responsibilities under EOR for Russia terminations:

Russia's grounds-exhaustive model means there is real exposure in every non-mutual termination. A dismissal outside the listed grounds can be overturned by a court, with reinstatement or average-wage compensation for the period of forced absence as the remedy. Teamed's approach is to make mutual agreement the default route wherever the client agrees it is appropriate.

EOR payroll, contractor onboarding, and entity setup all live on one platform. A Russia-based contractor who moves to PAYE keeps their record, and that same employee can graduate from EOR to your own Russian entity without switching systems, though entity setup in Russia involves additional regulatory steps. Run the Crossover Calculator to find the month the economics flip. EOR is the right model for a first Russia hire, until it isn't. Start from the Russia hiring overview.

Key sources: Rus Outsourcing, Employment Contract Termination in Russia and ALRUD Law Firm, Redundancy and liquidation severances in Russia.