In August 2024, Azerbaijan introduced significant amendments to its Labor Code, focusing on the establishment and termination of labor relations, specifically employment contracts.
Enhanced Employer Responsibilities
Effective August 12, 2024, the amendments have brought several positive changes to the Labor Code, making the labor system more efficient and supportive for both employers and employees. Employers now face clearer and more comprehensive obligations. They must ensure timely and complete payments for compulsory medical insurance, state social insurance, unemployment insurance, and insurance against occupational injuries and diseases. These updates reinforce workers’ rights and enhance transparency and accountability in the workplace.
A new concept called “staff unit” has also been introduced. This term refers to a job title and salary recorded in either the Ministry of Labor and Social Protection’s centralized electronic system or, where required, in paper documents. Employers are responsible for accurately entering staff units into this system, which will reflect job structures and hierarchies.
Streamlined Employment Contract Process
The transition to electronic documentation for most employment contracts represents a major advancement. This modern approach reduces paperwork, speeds up contract processing, and simplifies the process for both employers and employees. While high-level positions and certain government roles will continue to require written contracts, this shift enhances overall efficiency.
Family farming and family enterprises will also benefit from electronic contracts, promoting greater efficiency and transparency. All contract-related documents, including amendments and orders, will be managed through the electronic information system. Employees will only need to present an identification card when concluding contracts, and employers are prohibited from requesting documents that are already available from state databases.
The removal of the employment contract notice requirement is another significant change. Employment relationships are now established once an electronic contract is signed with an enhanced electronic signature, simplifying the legal recognition of contracts and amendments.
The amendments also eliminate the practice of collective contract signing and mandate that any amendments to electronic contracts be re-approved in their original form. The transition of existing contracts to electronic format will be phased in, as determined by the Cabinet of Ministers.
Flexible Termination of Employment Contracts
The new regulations offer increased flexibility for terminating employment contracts. Either party can now terminate a contract during the probation period with a three-day electronic notice. If employment terms change, employees can end their contracts with the specified notice period and notify their employer electronically.
For fixed-term contracts, a one-week notice is now required before the contract expires. If neither party provides notice, the contract will automatically extend or become indefinite, as stipulated by law. The ability to complete the notice period electronically further enhances procedural efficiency.
Flexible Documentation of Terminations
Employers can now establish their own procedures for documenting contract terminations, providing greater flexibility. If specific procedures are not set, terminations must adhere to legal grounds and processes. For electronic contracts, terminations must be recorded in the employee’s digital cabinet with an enhanced electronic signature.
Updated Model Employment Contract Form
Changes to the model employment contract form include the removal of specific identification details for both employers and employees, such as social insurance numbers and personal identification document details. These updates align the contract form with the new amendments and modernize its requirements.
Overall, these updates to Azerbaijan’s Labor Code aim to enhance efficiency, transparency, and flexibility in employment practices, benefiting both employers and employees.
