20 Nov 2023 17:52
Dismissed employees of the Armenian branch of Avito filed a lawsuit against the company. They demand that they be reinstated and paid for their downtime. In September 2023, the company terminated its relationship with employees who did not agree to the new pay conditions.
Avito in court
As CNews found out, dismissed employees from Avito filed a lawsuit against the company. Nine ex-employees of Avito’s Armenian subsidiary, Kekh Armenia LLC, are demanding that they be reinstated and paid for their forced downtime. This follows from the determination of the civil court of general jurisdiction of Armenia. The lawsuit was filed on October 30, 2023.
Avito fired dozens of employees on September 1, 2023. “As far as I remember, they fired 84 people who did not agree to sign the additional agreement,” an IT specialist and one of the plaintiffs told CNews. Those laid off were offered payment for 25 working days.
“Keh Armenia” is a company that employs employees outside of Russia. In June 2023, about 600 employees were registered there.
Avito is aware of the lawsuit. The company’s further actions will depend on the court’s decision.
Reason for dismissal
As CNews wrote in August 2023, Avito decided to change the approach to calculating salaries for employees. Because of this, some employees’ salaries in drams were reduced by up to 40%, interlocutors who were fired from Avito told CNews.
Former employees of Avito filed a lawsuit against the company
The company fired dozens of employees under Article 109 of the Labor Code of Armenia due to changes in “essential working conditions,” which Avito considered a new approach to calculating wages. The specialists who disagreed with the salary reduction refused to sign the corresponding additional agreement and therefore were fired.
The employees tried to come to an agreement with Avito, but the company did not make concessions, another ex-IT specialist of the company, who also went to court, noted in a conversation with CNews. The staff organized mass meetings and wrote letters, but to no avail. Avito continued to insist that the new method of calculating wages is indexation, and not a reduction in wages, another plaintiff told CNews. However, according to him, “a certain number of people” were nevertheless made individual offers that retained the old conditions.
“At the moment, we have fully familiarized ourselves with the documents, and our position has not changed: the entire procedure for re-registering the working conditions of employees was carried out strictly in accordance with the labor legislation of the Republic of Armenia,” a company representative told CNews. “All the necessary conditions on our part regarding employees were fulfilled.”
They emphasized that the office in Armenia continues to operate, and the majority of employees decided to remain in the company.
Billions of losses
At the beginning of August 2023, Avito sent an order to the employees of the Armenian office about changes in the approach to calculating the salaries of its Armenian subsidiary Kekh Armenia LLC. The company was forced to take this measure because of billions of dollars in losses threatening it.
The company paid employees a fixed salary in drams until September 1. Its size was calculated by Avito taking into account the exchange rate of the Armenian dram against the ruble. A certain “intra-corporate exchange rate” was taken as the basis for the exchange rate. This rate, “formed by internal calculations as a result of comparison and averaging of exchange rates published in official sources, in accordance with the policies adopted by the company,” the order says.
However, due to the fall in the ruble/dollar exchange rate at the beginning of August 2023, the company had a need to change the mechanism for calculating wages, in which its size would depend on the exchange rate of the Armenian dram to the ruble, published on the website of the Central Bank of Russia one working day before payment.
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“It is incorrect to talk about a reduction in salaries, since in ruble equivalent all remunerations have not changed or worsened,” noted a representative of Avito. — The decision to link wages to the ruble equivalent was the only possible one for us as a Russian company. It was not possible for the company to take on uncontrollable currency risk. We have always had an internal course and orientation towards Russian salary structures, since almost all of the company’s employees work in the Russian Federation. And it was important that workers in similar positions received comparable remuneration.”
The order emphasized that the company’s income is generated in rubles, and in the absence of a salary indexation mechanism, Avito may incur losses in Armenian drams equivalent to 1.3 billion rubles. by the end of 2023, and by the end of 2024 – 2.27 billion rubles.
In the order, the company gave employees a choice: either they will sign an additional agreement by August 31, 2023, in which they agree to the new conditions for calculating wages, or their employment contracts will be terminated on September 1.
“We are very pleased that we were able to save jobs for everyone who wanted to continue working in the company and understood us. The office in Armenia continues to operate; the vast majority of employees have decided to remain with the company. And we really appreciate this decision. As well as the choice of those who decided to continue their journey outside of Avito.
During the year, all company employees have the opportunity to be nominated for improved payment terms based on the results achieved. This is a basic transparent system of employee motivation, adopted in modern IT companies, where everyone understands how they can independently influence changes in their working conditions,” company representatives told CNews.