Employment Contracts with Employees are Mandatory License Requirement for Medium and Significant Property Developers

On the basis of the order of SACI, a routine check was carried out on the observance of the licensed conditions of conducting business activity on construction of objects that by the class of consequences (responsibility) belong to objects with medium and significant consequences, and the act of inspection was drawn up.

The act of inspection indicated that the licensee, in particular, had not fully confirmed the employment of a number of workers, had not given an order to approve the staffing list, employment contracts with all employees had also not been given. In view of these and other violations, the LLC license was revoked in accordance with the provisions of para. 5 and 10 of item 21 of the Procedure of licensing of economic activity connected with creation of objects of architecture.

Disagreeing with the relevant order of SACI, LLC appealed to the court with an administrative claim.

The district administrative court, which also agreed with the court of appeals, dismissed the claim.

The Supreme Court, as part of the panel of judges of the Court of Cassation, upheld these court decisions. In doing so, it was guided by the following:

1. Existence of employment contracts is an organizational requirement for obtaining a license. Therefore, the defendant had grounds for revocation of the license, since the plaintiff, in the information annexed to the License Terms, had entered inaccurate information regarding the existence of employment agreements with workers as documents confirming the employment relationship; secondly, the absence of the plaintiff's employment contracts with all employees indicates the inability of the plaintiff to enforce the license conditions.

2. It is in connection with the specific nature of the activity of the construction entity of IV and V categories of complexity by the legislator and the following requirements for the employment of workers are established. 2 h.9 Art. 9 of the Law on Licensing of Business Activities, the requirements of the licensing conditions for the entity should be determined by the peculiarities of conducting the type of economic activity subject to licensing, and include personnel requirements for data on the availability of employment contracts with all employees.

3. Paragraph 5 of the said License Conditions stipulates that the license applicant submits an application to the licensing authority for obtaining a license for conducting business activities for the construction of objects that by the class of consequences (liability) belong to objects with medium or medium and significant consequences. . The statement shall be accompanied by information on the production and technical base, the composition of employees by professional and qualification level, production technology. Nos. 1 Clause 8 of the License Conditions sets out the organizational requirements necessary to obtain a license, in particular, the existence of employment contracts with all employees.

At the same time, the CA / CAS rejected as unfounded the plaintiff's allegations that the term "employment agreement" was understood as a civil agreement, since the concepts of employment agreement and civil agreement are different in legal regulation and inherently and cannot be identified.

The CAS decision of April 8, 2020, in Case No. 808/2508/17.

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