Work

Staff at sanctions-hit Russian lessor awarded €31,738 by WRC

Avia Capital Leasing, a subsidiary of the second-largest bank in Russia, unable to pay redundancy after EU bank accounts frozen following invasion of Ukraine

Staff at Russian aircraft lessor Avia Capital Leasing's Irish business were left without redundancy pay when the operation shut after being hit by sanctions. Photograph: Fabrizio Gandolfo/SOPA Images/LightRocket via Getty Images

Stephen Bourke
Fri Apr 26 2024 - 18:27

The Irish arm of a Russian aircraft leasing firm should pay former staff more than €30,000 for employment rights breaches after it shut up shop when it was hit by sanctions linked to the invasion of Ukraine, the Workplace Relations Commission (WRC) ruled, even as it acknowledged the company was unable to pay the staff redundancy.

Such decisions give workers the right to claim for redundancy against the State’s social insurance fund, with the possibility of the State then pursuing the employer for the sum.

The tribunal upheld a series of employment rights complaints by Sofija Krascuka and Alexandra Skavronskaja against Avia Capital Leasing Ltd in decisions published on Friday. The bulk of the awards were made for “illegal” deductions being taken from their wages in March and April 2022.

Another colleague, technical manager Anton Gremin, separately received an award for notice pay earlier this week.

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Despite making awards totalling €31,738 to the three workers, the tribunal accepted in its decisions that the employer was “unable to pay” them their redundancy lump sums because of financial sanctions imposed by the European Union in April 2022.

Avia Capital Leasing, a subsidiary of the second-largest bank in Russia, the state-owned VTB, told the tribunal last year that it had no access to funds lodged with its parent’s German division, VTB Bank (Europe) SE.

The company told staff at its Dublin office on April 26th, 2022, that their employment was being terminated that day due to circumstances outside its control, the tribunal heard.

Appearing before a remote hearing of the WRC in April 2023, the aircraft lessor’s Moscow-based lawyer, Stanislav Dobshevich, said: “The issue is pretty simple – we don’t have bank accounts which aren’t frozen in Europe.

“We are actually willing to pay wages to employees and moreover, [they] were promised to pay for their troubles in roubles in Russia,” Mr Dobshevich said. “Employees refused [our] proposal,” he added.

The firm’s remaining director, Mikhail Trufanov, addressed the hearing via an interpreter to confirm the Irish office had shut.

“Management claimed [the] company couldn’t complete payments due to blocked bank accounts. However, bank representatives didn’t confirm this information,” Ms Krascuka and Ms Skavronskaja stated in their complaint forms, which were opened at a preliminary hearing in April 2023.

The women each said they were told there would be no redundancy payments as the company intended to continue its operations but they were asked to sign an “employment termination agreement” on April 14th, 2022. “Everyone from [the] team didn’t agree to sign,” they added.

Ms Krascuka and Ms Skavronskaja said they had been represented by the late Richard Grogan before the well-known employment law specialist died in late 2022. Enfield-based solicitor Terry Gorry came on record for them at a later stage in the proceedings.

Addressing the three workers’ redundancy complaints in separate decision documents, adjudicating officer Roger McGrath wrote: “This is an unfortunate situation where the complainant is one of a number of employees of the respondent company left ‘high and dry’ due to the sanctions imposed on Russian entities following the Russian government’s decision to launch a war against Ukraine.”

He found that each of the workers had been made redundant and was entitled to receive a lump sum, but got nothing with the company “unable to pay”.

Ms Krascuka and Ms Skavronskaja secured two months’ pay each for what Mr McGrath termed the “illegal deduction” of their salaries in March and April 2022.

He also awarded both a week’s pay each for a failure on the part of the firm to provide them with written employment terms in breach of the Terms of Employment (Information) Act.

The complaints had been denied by the employer, but Mr McGrath found in favour of the workers in the absence of any contradictory evidence being presented by the employer.

Ms Skavronskaja, who was getting €6,300 a month, was awarded €22,558 in total. Her colleague Ms Krascuka, who was earning €2,750 a month, received orders for €6,188.

Mr Gremin was also awarded a fortnight’s salary, €2,992, under the Payment of Wages Act 1991, representing two months’ statutory notice entitlements. He had secured an award of €11,970.80 in an earlier pay complaint decided by the WRC last August.

A fourth former employee of the company, Elena Bondareva, also received a pay order for €5,545.74 arising from the same circumstances in July 2023, along with a ruling that she was due statutory redundancy.

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