On the Need for Citizens to Conclude Employment and Civil Law Contracts When Working in EAEU Countries

On the Need for Citizens to Conclude Employment and Civil Law Contracts When Working in EAEU Countries

Background

On January 1, 2021, the Agreement on Pension Provision for Workers of the Member States of the Eurasian Economic Union, dated December 20, 2019 (hereinafter referred to as the Agreement), entered into force. Under the Agreement, citizens of EAEU member states working in EAEU countries acquire, retain, and exercise their pension rights on an equal basis with citizens of the EAEU country in which they are employed. Each EAEU member state grants pensions in accordance with its national legislation for periods of employment completed by workers on its territory after January 1, 2021.

It is worth mentioning that the EAEU currently comprises the Republic of Armenia, the Republic of Belarus, the Republic of Kazakhstan, the Kyrgyz Republic, and the Russian Federation.

On the Need to Conclude Employment Contracts

The free movement of labor within the territories of EAEU member states is one of the key advantages of the EAEU. Citizens of these countries have the right to work in other EAEU member states without obtaining a work permit or patent. Any EAEU citizen working in another EAEU member state is also entitled to the same employment guarantees as citizens of the country of employment.

However, the absence of a requirement to obtain work permits does not mean that employment relationships can be left without proper formalization. To exercise their rights, workers must have evidence of the existence of an employment relationship. The primary evidence is an employment contract or a civil law contract for the provision of services concluded with an employer. Verbal agreements do not provide workers with sufficient legal protection. An employer may change working conditions, delay salary payments, or claim that the individual performed occasional assignments rather than working under an employment contract. A written contract, in turn, makes it possible to establish who the employer is, what work the individual performed, how much they were to be paid, and what obligations the parties undertook. Employers are also required to make pension (insurance) contributions to the pension system of the country of employment for officially employed workers in accordance with the procedures and deadlines established by that country's legislation.

At the same time, workers should clarify in advance the procedures for formalizing employment relationships in the relevant country, as the rules for concluding contracts, their required form, and the procedures for notifying government authorities may vary.

Implementation of the Agreement in Kazakhstan

In the Republic of Kazakhstan, the Agreement applies to pension payments from UAPF funded by accumulated pension contributions upon reaching retirement age or being recognized as having a Group I or Group II disability on a permanent basis.

If a citizen of the Republic of Kazakhstan has worked (for example, for 3–5 years) in the territory of an EAEU member state after the Agreement entered into force, the country in which the migrant worker was employed will grant a pension for the period of employment completed in that country, provided that the individual meets the eligibility requirements established by the pension legislation of the country of employment (reaching retirement age and completing the required period of employment). In this case, the citizen of the Republic of Kazakhstan has the right to submit an application, together with the required documents, for the granting and payment of a pension either to the competent authority of the EAEU member state concerned or to UAPF, acting as the competent authority in the Republic of Kazakhstan.

The list of documents required for granting and paying a pension to a worker is governed by the national legislation of each EAEU member state.

Competent Authorities

In the Republic of Kazakhstan, the competent authorities responsible for confirming the employment history of workers from EAEU member states are UAPF JSC, the Committee for Regulation and Control in the Field of Social Protection of the Population of the Ministry of Labor and Social Protection of the Population of the Republic of Kazakhstan, and its territorial divisions.

UAPF provides information on periods of employment from January 1, 1998, based on data on mandatory pension contributions available in its digital system.

UAPF also performs the following functions:

• receiving documents for granting and paying pensions to workers under the Agreement;
• reviewing these documents and making decisions on granting or refusing to grant pensions;
• disbursing pensions granted by the competent authorities of EAEU member states.

Detailed information is available on the enpf.kz website in the “Services” section.

To confirm periods of employment prior to 1998, individuals must contact the territorial divisions of the Committee for Regulation and Control in the Field of Social Protection of the Population of the Ministry of Labor and Social Protection of the Population of the Republic of Kazakhstan

Agreement in Figures

During the implementation of the Agreement(from01.01.2021to30.09.2026):

·UAPF granted pension payments to 374 citizens of EAEU member states, including:

· the competent authorities of the following member states have granted insurance-based pensions to 39 citizens of Kazakhstan, including:

Thus, citizens of EAEU member states acquire and exercise their pension rights in EAEU member states on an equal basis with citizens of the country of employment, which is one of the main objectives of the Agreement.

UAPF was established on August 22, 2013, on the basis ofAccumulated Pension FundSAPFJSC. The founder and shareholder of UAPF is the Government of the Republic of Kazakhstan, represented by the State Institution "State Property and Privatization Committee" of the Ministry of Finance of the Republic of Kazakhstan. The National Bank of the Republic of Kazakhstan carries out trust management of UAPF pension assets. In accordance with pension legislation, UAPF collects mandatory pension contributions, mandatory employer pension contributions, mandatory occupational pension contributions, and voluntary pension contributions. The Fund also credits and records voluntary pension contributions formed from unclaimed guarantee compensation for guaranteed deposits, transferred by the organization responsible for mandatory deposit insurance in accordance with the Law of the Republic of Kazakhstan "On Mandatory Guarantee of Deposits Placed in Second-Tier Banks of the Republic of Kazakhstan", and ensures the payment of pensions. The Fund also maintains records of targeted assets and targeted claims, records and credits targeted savings (TS) to targeted savings accounts, transfers TS payments to recipients' bank accounts, and records the return of TS in accordance with the procedure established by the Government of the Republic of Kazakhstan under the "National Fund for Children" program.(For more information, visitwww.enpf.kz ).