Challenging Conditions of Labour Contract in Bankruptcy

Abstract

The recent amendments to the civil law show an evident trend of strengthening the influence of civillaw in the exclusive jurisdiction of labour law. Increasingly, judicial practice resorts to some conditionsof labour contracts with the principals of a company based on the federal laws On Limited LiabilityCompanies and On Public Companies to rule major transactions and related party transactions valid.At that, recent Article 53 of the Russian Federation Civil Code in point 4 stipulates that the relationsbetween a legal person and the persons belonging to it are subject to the code and other laws on legalpersons, which provided grounds to some civil law experts consider such practice legal and justified.However, Chapter 43 of the Civil Code on the features of legal regulation of the labour of the head of acompany and the members of collective executive body of the company remained unchanged. In turn,the rules of the latter as well as of the Civil Code in general do not provide for the ways of challengingemployment contracts due to interest and violating the rules of entering into a major transaction. Thepaper stresses the contradictory nature of the case practice on challenging labour contracts with theprincipal. Another example of interpreting civil law is challenging the conditions of labour contractwithin bankruptcy cases. The Federal Law On Insolvency (Bankruptcy) makes it possible to apply tolabour contract the rules on invalid transaction under the law and civil legislation. The paper shows thepriority as to bankruptcy law the provisions of legal legislation which do not consider labour contractinvalid and hence do not require charging salary from the employees. The issue is proposed to besolved by amending the legislation. In particular, rendering an employment contract invalid and its legalconsequences should be specified in the Labour Code.