KazakhstanEmployment Agreement Essentials

In Kazakhstan, the Labour Code outlines various types of employment agreements that can be established between employers and employees.

Indefinite Term Contracts

Indefinite term contracts are the most common type of employment agreement in Kazakhstan. This type of contract offers greater job security for the employee as there is no pre-defined end date for the employment relationship.

Fixed-Term Contracts

Fixed-term contracts are suitable for specific projects or temporary positions. These contracts typically last between three months and one year. However, there is an exception for small businesses with less than 250 employees. Renewals are possible, but with limitations. The Labour Code allows for a maximum of two extensions after the initial fixed-term period, with each extension lasting at least one year, except for small businesses.

Contracts for Specific Work or Replacement

Contracts for specific work or replacement are designed for a specific task or to replace a temporarily absent employee. The contract terminates upon completion of the designated task or upon the return of the replaced employee.

It's important to note that the Labour Code of Kazakhstan establishes a legal framework for these employment agreements. Both employers and employees should consult the Code or seek legal advice to ensure compliance with Kazakhstani labor laws.

An employment agreement is a crucial document that outlines the rights and obligations of both the employer and the employee. In Kazakhstan, the Labour Code mandates the inclusion of several essential clauses in these agreements.

Parties to the Agreement

The agreement should clearly identify the employer, including the company name and registration details, and the employee, including their full name and ID information.

Job Details

The employee's job title, function, and responsibilities should be clearly defined. The location of work should also be specified, including any remote work arrangements if applicable.

Remuneration and Benefits

The agreement should outline the employee's base salary, including the currency and frequency of payment. It should also detail any additional benefits offered, such as bonuses, allowances, health insurance, or paid time off.

Work Schedule and Hours

The standard workweek hours and any overtime arrangements, including compensation for overtime work, should be defined. Breaks and rest periods as mandated by Kazakhstani labor law should also be specified.

Leave Provisions

The agreement should outline the employee's entitlement to annual leave, sick leave, and other forms of leave as per the Labour Code. The leave approval process and any relevant procedures should also be specified.

Termination Clauses

The grounds for termination by either party, following the stipulations outlined in the Labour Code, should be detailed. This includes provisions for termination with notice periods, termination for cause, and termination by mutual agreement. The agreement should also define severance pay or compensation in case of termination.

Confidentiality and Intellectual Property

The agreement should include clauses regarding the confidentiality of sensitive company information and intellectual property rights.

Dispute Resolution

The process for resolving any disputes arising from the employment agreement should be outlined. This might involve internal grievance procedures or referral to relevant authorities.

The Labour Code of the Republic of Kazakhstan acknowledges the concept of a probationary period within employment agreements. This initial period allows employers to evaluate an employee's suitability for the role and provides employees with an opportunity to determine if the job meets their expectations.

Duration of Probationary Period

The Labour Code sets the maximum duration for a probationary period based on the employment role:

• Three Months: This is the standard probationary period for most employees in Kazakhstan.
• Six Months: For higher-level positions like CEOs, CFOs, their deputies, and heads of branch offices, the probationary period can be extended to a maximum of six months.
• Important Note: If a fixed-term employment contract is only for three months, the probationary period is reduced to just 14 days.

Termination During Probation

Both employers and employees have the right to terminate the employment contract during the probationary period with written notice, without stating a specific reason. This provides flexibility for both parties to make adjustments if needed.

Considerations During Probation

• Performance Evaluation: The probationary period allows employers to evaluate the employee's performance against the job requirements. This can involve assigning tasks, monitoring progress, and providing feedback.
• Employee Support: Employers should provide adequate support and resources to new hires during probation. This can include training, mentorship, and clear communication of expectations.
• Probation Period Not a Test: It's crucial to remember that the probationary period shouldn't be used solely to test an employee's skills. It's a time for mutual assessment and ensuring a good fit for both parties.

In Kazakhstan, employment agreements can include provisions to protect sensitive company information and limit competition from former employees. These are achieved through confidentiality and non-compete clauses. However, the way these clauses are treated under Kazakhstani law varies.

Confidentiality Clauses

The Labour Code of the Republic of Kazakhstan imposes a general obligation on employees to protect confidential information that constitutes "state secrets or official, commercial or other law-protected secrets" encountered during their employment.

To reinforce this, employers can include a specific confidentiality clause in the employment agreement. This clause should clearly define what is considered confidential information, such as trade secrets, customer lists, and marketing strategies. It should also outline the employee's obligations regarding the handling and protection of this information.

Non-Compete Clauses

Limited Application

Unlike confidentiality clauses, non-compete clauses in Kazakhstan carry limited legal weight. The Labour Code does not specify the restrictions that can be imposed through such clauses.

Focus on Non-Damaging Actions

However, the Labour Code does recognize non-compete agreements that establish an employee's obligation not to take actions that could harm the employer. This can be interpreted as restricting an employee from poaching clients or colleagues, or engaging in activities directly competing with the employer for a limited period after termination.

Enforceability and Best Practices

The enforceability of non-compete clauses in Kazakhstan is still a developing area of law. Courts may consider factors such as the reasonableness of restrictions, the employee's position, and the potential harm to the employer when evaluating such clauses.

For employers considering non-compete clauses in Kazakhstan, here are some best practices:

• Ensure the restrictions are narrowly tailored to protect specific confidential information or client relationships.
• The period of non-competition should be limited and proportionate to the legitimate interests being protected.
• Consulting with an employment lawyer familiar with Kazakhstani labor law is crucial to ensure the enforceability of your non-compete clauses.