Challenging Conditions of Labour Contract in Bankruptcy

The recent amendments to the civil law show an evident trend of strengthening the influence of civil law in the exclusive jurisdiction of labour law. Increasingly, judicial practice resorts to some conditions of labour contracts with the principals of a company based on the federal laws On Limited Liability Companies 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 relations between a legal person and the persons belonging to it are subject to the code and other laws on legal persons, 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 a company 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 challenging employment contracts due to interest and violating the rules of entering into a major transaction. The paper stresses the contradictory nature of the case practice on challenging labour contracts with the principal. Another example of interpreting civil law is challenging the conditions of labour contract within bankruptcy cases. The Federal Law On Insolvency (Bankruptcy) makes it possible to apply to labour contract the rules on invalid transaction under the law and civil legislation. The paper shows the priority as to bankruptcy law the provisions of legal legislation which do not consider labour contract invalid and hence do not require charging salary from the employees. The issue is proposed to be solved by amending the legislation. In particular, rendering an employment contract invalid and its legal consequences should be specified in the Labour Code.