The Civil Collegium of the Supreme Court of the Republic of Azerbaijan has adopted a decision establishing a unified judicial practice regarding the termination of an employment contract due to a change in the owner of the enterprise.
The Supreme Court informed Modern.az about this.
It was stated that, according to the circumstances of the case, the plaintiff worked for the defendant bank for many years, most recently as a branch manager. In 2020, his employment contract was terminated. After the plaintiff appealed to the court, the lower instance courts invalidated the order to terminate the employment contract, ruled for his reinstatement to his previous position, payment of wages for the period of forced absence from work, and considered the employment contract to be indefinite.
Subsequently, there was a change in the shareholder structure of the bank. After this, the employer again terminated the employment contract concluded with the plaintiff on the grounds of a change in the owner of the enterprise. The plaintiff again appealed to the court, stating that this order was illegal, and the lower instance courts granted the claim.
However, the Supreme Court disagreed with the outcome of the appellate instance.
The court collegium noted that the basis of a change in the owner of the enterprise, as provided for in Article 68 of the Labor Code, gives the new owner the right to terminate labor relations with persons working in positions related to the management of the enterprise and the management of financial resources.
The Supreme Court emphasized that a change in the owner of an enterprise is not limited only to a change in the form of ownership. Such a change may occur in the shareholder or founder composition that it actually leads to the formation of a new owner's will.
When an enterprise has several owners, if the owner with a 51 percent share in its property changes, the right to terminate the employment contract on this basis arises. If there is no owner with 51 percent in the distribution of ownership shares in any enterprise (for example: if the shares are divided into 20, 30, 40 percent), this right does not arise if one of the owners changes.
It was determined in the case that the share of the bank's main shareholder changed by more than 51 percent, and also a new shareholder joined the ranks of founders. According to the collegium, this situation should be considered as a change in the owners of the bank.
On these grounds, the Supreme Court annulled the decision of the appellate court and issued a new decision to reject the claim.
