Every year in Russia, mortgage lending is becoming an increasingly popular way of purchasing your own square meters. Almost a quarter of our country's population has loans received to purchase their home. In the last decade, for many citizens of our country, the question has become very relevant and no less painful: can an employer fire an employee who has a mortgage?
Based on the norms of the current legislation regulating legal relations in the sphere of labor, all working employees have guarantees defined by law that ensure the protection of their rights and interests in the workplace.
Regulator of labor relations in Russia
In Russia, the Labor Code has become the fundamental legal document regulating the relationship between employee and employer.
Speaking about the rights and social guarantees of workers, to begin with, it is necessary to refer to Article 180 of the Labor Code of the Russian Federation, which contains the requirements that at the beginning of the procedure for reducing the number of employees of an enterprise, the head of this enterprise must comply with certain rules for such a reduction. 
Thus, the manager of an enterprise (organization) is obliged to offer the dismissed employee on his staff to perform another available job or another vacant position at his enterprise.
Moreover, that the employee will be fired, he must be notified by his employer personally, with a signature on the notice, and no later than two months before the dismissal.
Reasons why an employee may be fired
Let's take a closer look at the conditions that may serve as a reason for dismissing an employee.
For example, Article 81 of the Labor Code of the Russian Federation contains a list of circumstances under which an employment contract with an employee is terminated.
The contract will be terminated in the event of:
This article contains mandatory conditions according to which the head of the organization will not be able to dismiss an employee for the above reasons during the period when the person is temporarily disabled or is on primary or additional leave.
Further, Article 179 of the Labor Code of the Russian Federation tells us that those employees of the organization who have greater labor productivity and higher qualifications have a preferential right over other employees to remain working.
If the employer has to choose between two employees with approximately the same productivity and qualifications, then the employee who will remain working is: 
- a family person (if the family has two or more dependents);
- an employee who received an occupational disease or injury at work;
- disabled during the Second World War or disabled during combat operations;
- an employee who improves his qualifications in his area of work;
- the only able-bodied person in the family.
Who else is covered by the guarantee not to be fired?
Articles 256 and 261 of the Labor Code of the Russian Federation establish a requirement, observing which the head of an organization does not have legal grounds to dismiss due to a reduction in the number of people working for him in the following categories:
Having analyzed all of the above, we come to the conclusion that the current legislation does not define privileges for employees paying mortgages. Such employees can be dismissed on a general basis, since they do not enjoy any preferential right to remain employed.
In November 2016, deputies of the State Duma of the Russian Federation from the LDPR faction made a proposal to legalize additional guarantees for employees with mortgage loans (bill No. 27293-7).
According to this bill, it was proposed to amend Article 81 of the Labor Code of the Russian Federation, according to which an employer could not fire an employee who has an outstanding mortgage.
In the explanations to the bill, deputies explained the need to adopt such amendments by the fact that the majority of Russian families cannot purchase their own housing without borrowed funds. In most cases, mortgage loans are taken out by young families.
In the event of dismissal, such families are left without a source of livelihood, with a large credit debt, and, more often than not, without their own apartment. To effectively protect this category of citizens at the legislative level, this bill has been prepared, the authors of the initiative report. 
According to the new bill, the law will prohibit an employer from dismissing employees who have mortgage loans until the bank has paid it in full. In the event of a reduction in the number of staff in the organization, such employees will have a legislative priority right not to be fired.
According to the legislative initiative, an employer will not be able to lay off employees paying a mortgage in the following situations:
- if the employee does not correspond to the position he holds or the work performed;
- if there is a reduction in the number of staff of the organization.
However, among the expert community of economists, political scientists, and lawyers, opinions on the legislative amendments proposed by deputies were divided. 
One group of experts considers the adoption of such amendments to labor legislation a good thing, since it will not allow a person paying a mortgage to be left without a single source of income.
Others, on the contrary, consider such a legislative initiative to be incorrect, since, in their opinion, such conditions will create additional difficulties for the employer. He will be forced to keep an inefficient employee on staff, firing an effective one, for no other reason than that the ineffective employee has a mortgage.
There are opinions that argue that with the adoption of the new law, the requirements for the selection of new employees for any positions will be seriously tightened. 
With such measures, the employer will be able to protect itself from careless employees with a mortgage. After all, the price of a mistake is quite high.
Currently, if an irresponsible, professionally unsuitable employee is hired, the employer may lose an average of 100-200 thousand rubles over several years in the form of direct losses or lost profits.
If the corresponding amendments to the Labor Code of the Russian Federation are adopted, the same employer, having hired such an employee, will hang a “financial yoke” for himself for many years - i.e. until the end of the employee's mortgage payment period.
Summarizing the material collected in the article, we conclude that today, according to Russian legislation, a laid-off employee of an organization will not be able to demand reinstatement from a dismissed position only because he has mortgage obligations.
Time will tell whether appropriate amendments to labor legislation will be adopted to establish additional social guarantees for workers with mortgage loans.
When a family decides to take out a mortgage, it consciously takes a risk, since this is a long-term bank loan that will have to be repaid over 10, 15, or even 20 years. However, no person is able to plan his life and foresee all possible difficulties. In reality, any financial problem will make your mortgage payments more difficult. But the worst thing is considered to be the loss of a job, and as a result of this constant income. It is not surprising that many borrowers are interested in whether they can be fired if they have a mortgage.
A common myth is that when dismissing an employee, each manager must make an exception for those who have a large loan to purchase a home and assign him a job. In fact, the presence of a debt loan for the purchase of real estate is an exception of a personal nature; this provision is not enshrined in law anywhere. Those who are wondering whether they can be fired if there is a mortgage should understand that the employer has the right not to focus on this.
Who can apply for job retention?
According to current legislation, there are several categories of citizens who enjoy the priority right to retain their jobs:
- If one parent provides financial support for minor children. That is, the family has the status of incomplete.
- Citizens who support two or more dependents. As a rule, these are old sick people, small children or disabled people.
- Citizens who are at the stage of training in the direction of the employer.
- Citizens who have previously received work-related injuries at the enterprise.
“Mortgage holders” are not on the list of beneficiaries
When an employer is faced with the question of mandatory staff reductions, he will always give priority to those employees who are included in one of the above groups. However, it is also worth understanding that no one has canceled labor productivity indicators, and if a person who does not have benefits works better, he automatically has a better chance of keeping his job. Regarding the question of whether they have the right to fire if there is a mortgage, there is not a single mention that people who have obligations to repay the loan can qualify for benefits. 
Where do rumors come from?
There has been information in the media and other sources for a long time that employees who have large loans cannot be fired from their jobs until they have fully fulfilled their obligations to the bank. This is what provoked numerous questions about whether someone can be fired from a job if there is a mortgage. In fact, the emergence of unreliable information is associated with active consideration of translating such an idea into reality. The very idea of the potential legislative project is to impose a ban on the dismissal of employees from state-owned enterprises that have a registered mortgage obligation. 
There is an opinion of experts who claim that such a law will help replenish bank reserves and reduce losses, which have recently been growing exponentially. Therefore, many banks go bankrupt and cease their activities in the consumer market. However, it is also planned to give the employer some leeway in this amendment. If an employee grossly violates company regulations, the employer has every reason to fire him.
What does the potential bill say and what is the situation today?
According to the idea of the authors who came up with this concept, the employer does not have the right to terminate the contract with the employee paying the mortgage in the event that massive staffing cuts occur and the employee cannot cope with the stated work requirements due to insufficient qualifications, knowledge and skills.
If we talk about current legislation, then an employee’s credit history is requested only from financially responsible enterprises and banking structures, so the employer, in principle, may not be aware that his employee is paying a mortgage. If the potential project is supported at the vote, the borrower will be required to provide all information to the bank about his current place of work. 
The current economic situation in the country does not make “mortgage holders” stand out at all. Dismissal and hiring occur as usual, so the most ordinary residents do not expect any help. Accordingly, the question of whether it is possible to dismiss an employee with a mortgage is currently irrelevant.
Relevance of potential social changes
It is often important to understand that the borrower stops paying the mortgage not because he spent the money on his own needs and ignored the bank’s requirements. Most often this is due to family problems or job loss, which is why borrowers are interested in whether they can be fired if they have a mortgage. During the discussion of the above project, many said that the socio-economic situation in the country could change for the better with its help. Because workers are guaranteed work, which means financial institutions will receive their money on time. 
Conclusion
However, the question of whether it is possible to dismiss with a mortgage is still under consideration and is being actively discussed by members of various parties. There are currently no plans to implement it. Therefore, today borrowers have to deal with their problems alone, and the question of whether they can be fired if they have a mortgage remains open.
People often wonder whether they can fire an employee with a mortgage. This type of lending occupies a special place among banking products. It is characterized by the duration of the financial relationship between the bank and the borrower, a large amount of funds issued and repayments, and automatic collateral. Banks do not provide loans to everyone who wants them. Citizens must meet certain requirements that together form a portrait of an ideal borrower. The main role in the requirements is given to permanent and stable work with large earnings. But the risk is that a person may lose a highly paid job, since mortgage holders can be fired. To protect employees with a mortgage, deputies of the LDPR party proposed a bill. In a general sense, it can be characterized as a law on not dismissing employees with a mortgage.
How urgent is the adoption of the law?
Deputies propose to introduce a ban on dismissal for citizens with a mortgage. That is, the employee who took out this loan cannot be fired. This initiative of the deputies received a lot of feedback not only from specialists, but also from ordinary people. According to the idea of the authors who wrote this bill, the immunity of employees with credit should promote a ban on the dismissal of a person in the event of staff reduction or on the basis of insufficient qualifications for the position held. Thus, the legislator equates mortgage holders to categories of citizens who, according to the Labor Code of the Russian Federation, currently have a preferential right to remain at work. These are citizens with small children, disabled people in the family, dependents, as well as those who were injured at work.
Most experts who managed to analyze this bill admitted that the initiative of deputies to ban the reduction will remain unclaimed.
Labor Code of the Russian Federation
- Liquidation of a legal entity (hereinafter referred to as LE).
- Termination of the IP.
- Reduction of staff in legal entities.
- Inadequacy of the employee for the position held due to low qualifications.
- Change of owner of the organization, management of the legal entity, chief accountant.
- Failure by an employee of a legal entity to fulfill his duties, without good reason, if this is done repeatedly.
- Gross violation of their duties by employees.
A laid-off employee does not have the right to demand reinstatement on the grounds that he has a mortgage. Opponents of the bill draw attention to this circumstance, emphasizing that a person undertakes a voluntary financial obligation.
This means that by taking out a large loan, he plans his future and, in the event of a layoff or layoff, will withdraw funds in order to pay the bank before finding a new job. On what basis should the legislator give relief to people who take out loans and put them on the same level as socially vulnerable categories of citizens? Above was a list of grounds for dismissal at the initiative of the employer. The Labor Code also provides for general grounds, this is an agreement between the parties to the employment relationship, as well as the initiative of the employee himself. But within the meaning of the text, the grounds for dismissal at the employee’s initiative do not need to be demonstrated, since not a single employee who has taken out a mortgage will independently resign from a well-paid job.
It is no secret that the bill has many detractors. But its authors explain their position by the fact that there are many cases when a mortgagee, trying to start a family, pays for a loan. But after a few years, the employer fires him for formal reasons. The person is left without a livelihood, he has nothing to pay for the loan. In addition, the debt on it is growing. In such families, scandals and misunderstandings begin, they simply collapse. In many situations, someone from the family commits an offense. In order to suppress illegal acts, this idea was formed, which is reflected in the bill. To be honest, this is a weak justification for the authors’ idea. If the family is not strong, then it will collapse anyway: financial debts do not play a decisive role here. If a person is left without a job, he can sell the mortgaged apartment, and hold the employer accountable if he formally fired him.
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Deputies from the LDPR have introduced a bill into the State Duma that would prohibit the dismissal of an employee who pays the mortgage for the home he originally purchased. But experts believe that such an initiative by deputies is likely to have the opposite effect.
Bill for employees with a mortgage
The introduced bill gives the category of workers who pay a mortgage for their primary home a preferential right to remain at work if the number or staff of employees is reduced. How should one approach such an initiative, and is it possible, in principle, to protect a mortgage borrower from dismissal at the legislative level? "Economy Today" experts said.
Director of the Institute of Industry Management of RANEPA, Doctor of Economic Sciences, Professor Elena Ivankina believes that the law is incorrect: “There are two completely different planes here. If a person has taken out a mortgage, then he cannot be fired from his job. The idea, of course, is in favor of mortgage borrowers, but it has nothing to do with cuts. In principle, the proposals are tied to macroeconomics - there should be enough new jobs in the country where, in the event of dismissal, a qualified specialist or employee can go. But we just have a shortage of such places.”
Economist Tatyana Kulikova also looks at the deputies’ ideas with skepticism: “The bill is impassable, and its developers hardly ever planned for it to pass. It resembles pure populism, which is typical of opposition factions and the Liberal Democratic Party in particular. Besides, I don't think this approach is fair. It turns out that more valuable and deserving employees will be forced to leave for reasons unrelated to the quality of their work. This state of affairs would give rise to injustice.
Reverse effect of the bill for employees with a mortgage
Moreover, the idea itself creates additional difficulties for the employer. He will have to keep an ineffective employee while firing an effective one, simply because someone has a mortgage. We can only expect a deterioration in the business environment. The bill is counterproductive, unfair and, in my opinion, impassable.”
As Kulikova notes, many social categories also need protection, for example mothers of many children, but existing protection mechanisms often work in the opposite way. “If it’s difficult for us to fire a mother with many children, then the employer will think ten more times before hiring her. In reality, there is discrimination against preferential categories, and such questions can have the opposite effect,” the economist believes.
An employer will have to keep an ineffective employee while firing an effective one simply because someone has a mortgage
Elena Ivankina cites the experience of Western countries in the field of legislative protection of workers from dismissal. “In the West, it is generally difficult to fire an employee, he is so protected by law. We have not yet done enough in this regard. My American colleague, who once headed the international department at the US Department of Agriculture, could not fire one slacker for 20 years.
Firstly, she was a woman, secondly, she limped on one leg, that is, she was a person with a physical disability, and thirdly, she was African-American. She did nothing at work, but all the unions constantly came to her defense.
From this example, I realized that any legislation that protects the interests of citizens can work not only against the employer, but against the cause, and the interests of the cause should always be at the forefront. I don’t think the bill proposed by the LDPR is correct and would take a different path - providing mortgage payments on time, and most importantly, creating jobs in the country where people who lost their jobs could go,” our interlocutor sums up.
Can an employee be fired if he has a mortgage? Many employees have obligations to banks. As for the mortgage, this is a long-term loan, which is issued only to those who have a stable and fairly high salary. Naturally, an employee will not voluntarily leave a job that makes it possible to repay the debt to the bank in a timely manner. What are the rights of an employer to terminate the employment relationship with an employee burdened with a mortgage?
Grounds for termination of employment relations
Article 81 of the Labor Code of the Russian Federation.
Article 81 of the Labor Code of the Russian Federation. Continuation.
A bill prohibiting an employer from dismissing an employee who has debt obligations in the form of a mortgage has been considered by the State Duma for several years. However, to date it has not found sufficient support among deputies to put it into effect.
Many supporters of this bill are in defense of the employee who, when receiving a mortgage, was confident that he would always have income in the form of a stable salary. Opponents of the law say that a mortgage is a voluntary decision for everyone, and it would be wrong to put borrowers on the same level as people who really need social protection.
Article 81 of the Labor Code of the Russian Federation contains a list of grounds under which an employer can terminate an employment relationship with an employee:
- Reduction of staff or liquidation of an organization
- Gross violation of labor discipline by an employee.
- Change of owner of the enterprise, giving the new owner the opportunity to terminate the employment contract with the manager and chief accountant.
- Inconsistency with the position held due to the fact that the employee, according to the results of the certification commission, does not have sufficient qualifications or due to health reasons cannot continue to work.
- Violation of labor safety standards, which led to serious consequences.
- Systematic failure to fulfill one's duties.
As can be seen from the above list, the employer has many reasons for terminating the employment relationship on his own initiative. However, an employee who values his place is unlikely to violate labor discipline, and one can prepare for a professional suitability assessment if it does not concern health status.
The easiest way to fire an employee is to reduce the number of employees. But there are exceptions due to which an employer cannot fire a person.
Article 261 of the Labor Code of the Russian Federation contains a list of such persons who cannot be reduced:
- Pregnant women and those with a child under 3 years of age.
- Single mothers raising children under 14 years of age or disabled minors.
- Persons who single-handedly support a large family with children under 3 years of age or a minor child with a disability.
Guardians and trustees raising children without a mother are considered single mothers. This list can be supplemented by internal documents of the organization or, for example, a collective agreement.
If an organization has signed an agreement between the employer and the team, then often the terms of such an agreement contain a ban on dismissal due to staff reduction of persons of pre-retirement age, as well as persons who have mortgage loans.
What to do if you are fired from your job?
What should a mortgage holder who has been laid off do? When reducing staff numbers, the employer takes into account the professional qualities of the employee, as well as the level of labor productivity. Nevertheless, an important factor for the employer is the personality of the employee. By providing the employer with your arguments and documents about the existence of debt obligations, management can be convinced to meet halfway and keep the borrower at work.
For reference! Many banks provide a deferment of the next payment to borrowers who have lost their jobs due to layoffs.
Having received notice from the employer 2 months before dismissal, the person has time to find a new job in order to fulfill his obligations to the bank. In addition, after dismissal, the employee retains his average monthly earnings for 2 months if he has not yet found a job. Thus, a person who has been laid off has 4 months to find a job without falling behind on his mortgage payment.