Full material liability contracts
Full material liability contracts are signed:
- in writing;
- with persons of full age;
- only with the employees maintaining or using monetary items, commodity values or other possessions.
- as an addition to the labour contract or whenever the responsibility to maintain tangibles is assigned to an employee.
However, it also happens that the task of maintaining the tangibles is assigned to the position occupied by an employee, but he/she refuses to sign a contract of full liability.
In this case, the employer is obliged to offer him another job. If there is no position to offer or an employee refuses to accept another position, the employer may terminate the employment relationship with the employee on the basis of the article “Employee’s refusal to continue working due to the change in the terms of the employment contract agreed by the parties” of the Labour Code of the Republic of Azerbaijan.
Material liability of employees may be either individual or collective
Full individual material liability applies to a particular employee, who:
- Has received tangibles and is responsible for their safety;
- Is responsible for storing t(processing, selling) tangible assets in a separate isolated room and a place to store valuables (e.g., safe) allocated for that purpose;
- Should independently report to the accountant on the state of these tangibles.
Full individual liability contracts are signed with the below mentioned employees:
Employees performing cash transactions:
- Employees acting as cashiers/controllers
Employees carrying out depositary activity:
- Deputy manager
Employees carrying out the examination, authentication, and other type of checkups as well as responsible for the destruction in the prescribed manner of banknotes, securities and forms issued by credit or other financial institutions and / or the Ministry of Finance of the Republic of Azerbaijan:
- Deputy manager
Employees carrying out operations on purchase, sale, payment authorization, and other forms of sales of banknotes, securities, precious metals, coins made of precious metals and other currency valuables:
- Deputy manager
Employees engaged in cashiering services at ATMs or working with clients possessing personal safes in the depot of valuables and other property:
- Deputy manager
- Other employees
Employees engaged in operations in issue, registration and storage of credit and discount cards; cash and other financial services; calculation, recalculation or formation of cash and currency values:
- Deputy manager
Employees performing collector functions and engaged in transportation of cash and other valuables:
- Deputy manager
- Driver collector
Those employed in trading enterprises, the sphere of public catering, consumer services, accommodation (camping, motels):
- Deputy Manager
- Assistant Manager
- Commodities expert
Employees performing construction, installation, erection works:
- Head of the construction unit (section)
- Head of fitting shop (section)
- Construction unit (section) foreman
- Fitting shop (section) foreman
Employees of warehouses, storerooms, pawnshops, storage chambers and other units for the storage, accounting and issuance of tangibles:
- Deputy manager
- Employees responsible for administrative support:
- Head of household
- Commandant of buildings and other structures
Employees of health care organizations:
- Senior nurse of health care organizations
Employees responsible for the provision, storage, bookkeeping, issuance and transportation of tangibles:
- Provision agent
- Purchasing agent
- Forwarding agent
Employees of pharmacies and other pharmaceutical organizations, departments, centers and units:
- Deputy manager
Employees of educational institutions, libraries:
- Methodist of department
- Methodist of dean’s office
- Head of library units
Full collective (brigade) material liability applies to employees who work together to accomplish certain activities associated with the storage, processing, sale, transportation and other usage of the tangibles transmitted.
Contracts for full collective (brigade) liability are signed for performing the functions listed below:
- Receiving and making all kinds of payments; making calculations during the sale (realization) of goods, products and services (including non-cash payments, payments with cash, non-cash payment through salesmen, waiters or others responsible for receiving payments); maintaining trade and cash machines; producing and storing all types of tickets and coupons (including tickets and coupons for meals (foodstuff), and other documents intended to pay for services).
- Works related to the implementation of depository activity; examination , authentication, and other checkups as well as destruction in the prescribed manner of banknotes, securities and forms issued by credit or other financial institutions and / or the Ministry of Finance of the Republic of Azerbaijan; operations on purchase, sale, payment authorization, and other forms of sales of banknotes, securities, precious metals, coins made of precious metals and other currency values; cashiering services at ATMs or working with clients possessing personal safes in the depot of valuables and other property; operations in issue, registration and storage of credit and discount cards; cash and other financial services; calculation, recalculation or formation of cash and currency values; collector functions and transformation of cash and other valuables;
- Purchase, sale (trade, release, realization) of services, goods (products), preparations for sale (trade, release, realization).
- Works related to receiving goods for storage, processing (manufacturing), recording, placement of tangibles in warehouses, bases, storerooms, units , other organizations and entities; equipping passenger ships, cars and airplanes; servicing residential sectors of accommodations (camping, motels, etc.)
- Acceptance of objects of cultural and community purpose and other assets for storage, repair and other operations related to manufacture, restoration or improvement of the quality of these items (tangibles); hiring out objects of cultural and community purpose and other tangible assets.
- Works related to receiving and processing of cargo, baggage, mailings and other material and monetary values with the aim of delivery.
- Works related to manufacturing (assembly, installation, and adjustment) and repair of machinery and equipment, devices, systems, and other products produced for sale as well as parts and spare parts.
- Works related to the purchase, sale, exchange , transportation, shipping , delivery , storage, processing and use in the production of precious and semi-precious metals, stones , synthetic corundum and other materials as well as items produced from them.
- Works related to growth, feeding, and breeding farm and other animals.
- Works related to manufacturing, processing, transportation, storage, control and accounting, sales (including purchase and delivery) of nuclear materials, radioactive substances and waste as well as other chemicals, biological materials, arms, ammunition, spare parts to them, explosives and other products banned or restricted for uncontrolled distribution.
Deductions for property damage caused to the organization
Determination the cost of damage
The cost of damage caused by theft, shortfall and intentional destruction is determined in accordance with prices prevailing in the locality at the date of the damage.
The employer has the right to determine the cost of any damage at market prices and to recover it from the employee, given it is not less than the value of lost or damaged property according to accounting data and taking into account the degree of wear of the property.
Prior to deciding on the amount of compensation to be paid by certain employees, the employer must determine the amount of damage caused damage and its causes. To do this, the employer has the right to establish a commission comprised of relevant experts
Determination of the causes of damage is necessary since employee liability is excluded in cases of damage caused by force majeure, normal economic risk, emergency or necessary defence or failure by the employer to perform required duties to ensure proper storage conditions for the property entrusted to the employee.
Employee’s explanations in writing are required to determine the cause of damage.
The employee also has the right to become acquainted with all the materials produced during examination and appeal against them in the manner prescribed by law. If damage is caused by the fault of several employees, the amount of compensation to be made is determined for each of them, taking into account the degree of culpability, the type and limits of material liability.
In determining the amount of compensation in accordance with labour code, lost revenue (lost profits) are not considered and not subject to recovery.
Collecting compensation not exceeding the average monthly salary from the guilty employee is made by order of the employer. The order may be made no later than one month from the date of the final determination by the employer of the cost of damage inflicted by the employee.
If the prescribed period has expired or the employee does not agree to voluntarily reimburse to the employer for damages, and the amount of damages to be collected from the employee exceeds his average monthly earnings, the payment of compensation may only be carried through the decision of court.
Failure by the employer to comply with the established order grants the employee a right to appeal his actions in court.
The employee guilty of causing damage to the employer may voluntarily reimburse the cost of the damage in full or partially.
In accordance with the agreement of the parties of the labour contract compensation can be made in instalments. In this case, the employee presents to the employer a written commitment to make compensation with indication of specific payment terms. In the case of dismissal of the employee who has provided a written commitment on voluntary compensation, but refused to refund the specified damage cost, outstanding amount shall be recovered through legal proceedings.
With the employer’s consent the employee may provide equivalent property for redress or fix the damaged property.
Indemnification is to take place regardless of bringing employees to disciplinary, administrative or criminal liability for acts or omissions causing the damage to the employer.
Retention for defects
Determining the cost of damage and the procedure for claiming retention for defects are similar to the indemnification procedure.
There could be several reasons as well as responsible persons for occurreddefects. If it is the supplier of materials or items responsible for defect, then the claim is made to him. If it is the employee responsible for defect, then following indemnification procedures prescribed by law should be followed:
- if the guilty employee agrees to voluntarily cover damages, compensation in instalments is allowed in accordance with the agreement reached with the administration;
- if the employee does not agree to voluntarily compensate the damage, the administration may recover it in an indisputable manner only if the cost of the damage does not exceed the average monthly wage of the employee. An order for withholding the wage should be issued within one month from the date of the final determination of the cost of the damage. If the amount of damage exceeds the average monthly wage, then it can only be recovered through legal proceedings.