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Compensation for an employee’s unused annual leave will be calculated under a different procedure — EXAMPLES
Compensation for an employee’s unused annual leave will be calculated under a different procedure — EXAMPLES
The Commissioner for Human Rights (Ombudsman) of the Republic of Azerbaijan applied to the Constitutional Court of the Republic of Azerbaijan requesting a review of whether Parts 2 and 3 of Article 144 of the Labour Code of the Republic of Azerbaijan comply with Articles 25 (Parts I, III, IV and V), 37 (Parts I and II), 71 (Parts I, II, V and VI), and 149 (Parts I and III) of the Constitution of the Republic of Azerbaijan. The new decision is commented on by expert Ramin Hajiyev.
The request states that, pursuant to Article 144.2 of the Labour Code, upon termination of an employment contract—regardless of the grounds or reasons—the employee must be paid monetary compensation, without any conditions or restrictions, for all unused basic annual leave for all working years up to the date of dismissal. However, under Article 144.3, upon termination of employment relations, no monetary compensation is paid for additional leave предусмотренных by Articles 115 and 116 of the Code, nor for educational, creative, or social leave.
According to the applicant, restricting the payment of compensation for additional leave (for working conditions, the nature of the job function, and length of service) as provided in Articles 115 and 116 of the Labour Code violates the constitutional principle of equality and the requirement that normative legal acts be based on law and justice. It also leads to a violation of the right to rest guaranteed by Article 37 of the Constitution.
Currently, the additional leave established by the Labour Code includes:
– additional leave for working conditions and the specific nature of the job function (Article 115);
– additional leave for length of service (Article 116);
– additional leave for women with children (Article 117);
– additional leave for specialists working in the territories of the Republic of Azerbaijan liberated from occupation (Article 118-1).
After examining the Ombudsman’s request, the opinions of courts and relevant institutions, expert conclusions, and case materials, the Plenum of the Constitutional Court adopted the following decision:
The provision of Article 144.3 of the Labour Code stating that “no compensation shall be paid for additional leave предусмотренных by Articles 115–117 and 118-1 of this Code” was found to be inconsistent with Articles 25 (Parts I and III), 71 (Part II), and 149 (Part I) of the Constitution, as it contradicts the principles of equality and justice in normative legal acts and disproportionately restricts the right to paid annual leave. Its application has therefore been suspended.
Based on the legal positions reflected in the reasoning part of the Plenum’s decision, Articles 144.2 and 144.3 of the Labour Code must be brought into compliance with Articles 25 (Parts I and III), 71 (Part II), and 149 (Part I) of the Constitution in order to ensure the payment of compensation for unused additional leave предусмотренных by Articles 115–117 and 118-1 of the Code.
Until the matter is resolved legislatively, and taking into account the requirements of Articles 25 and 149 of the Constitution, in order to eliminate the existing inequality, upon termination of an employment contract the employee must be paid compensation—calculated in the same manner and amount as for unused basic annual leave—for all unused additional leave предусмотренных by Articles 115–117 and 118-1 of the Labour Code for all working years.
This Decision of the Plenum of the Constitutional Court applies to employment terminations occurring after its entry into force, as well as to relevant cases currently pending before the courts. The decision entered into force on the date of its publication—18 February 2026.
Example 1: An employee hired as an accountant on 22 February 2025 has their employment terminated on 22 February 2026. The employee is entitled to 30 calendar days of basic leave and 4 calendar days of additional leave for length of service, totaling 34 unused days. Compensation must be paid for all 34 calendar days.
Example 2: An employee hired as an engineer on 25 February 2025 has their employment terminated on 25 February 2026. The employee is entitled to 30 days of basic leave, 6 days of additional leave for working conditions, and 2 days for length of service—38 calendar days in total. Compensation must be paid for all 38 days.
Example 3: An employee hired as a driver on 5 October 2025 has their employment terminated on 2 March 2026. The employee is entitled to 8.5 calendar days of basic leave (for the period 05.10.2025–02.03.2026) and 2 days of additional leave for length of service, totaling 10.5 days. Compensation must be paid for 10.5 calendar days.
Example 4: An employee hired as an engineer on 25 February 2025 has their employment terminated on 25 February 2026. The employee is entitled to 30 days of basic leave, 6 days of additional leave for working conditions, and 5 days of additional leave for work in liberated territories—41 calendar days in total. Compensation must be paid for all 41 calendar days.
The Commissioner for Human Rights (Ombudsman) of the Republic of Azerbaijan applied to the Constitutional Court of the Republic of Azerbaijan requesting a review of whether Parts 2 and 3 of Article 144 of the Labour Code of the Republic of Azerbaijan comply with Articles 25 (Parts I, III, IV and V), 37 (Parts I and II), 71 (Parts I, II, V and VI), and 149 (Parts I and III) of the Constitution of the Republic of Azerbaijan. The new decision is commented on by expert Ramin Hajiyev.
The request states that, pursuant to Article 144.2 of the Labour Code, upon termination of an employment contract—regardless of the grounds or reasons—the employee must be paid monetary compensation, without any conditions or restrictions, for all unused basic annual leave for all working years up to the date of dismissal. However, under Article 144.3, upon termination of employment relations, no monetary compensation is paid for additional leave предусмотренных by Articles 115 and 116 of the Code, nor for educational, creative, or social leave.
According to the applicant, restricting the payment of compensation for additional leave (for working conditions, the nature of the job function, and length of service) as provided in Articles 115 and 116 of the Labour Code violates the constitutional principle of equality and the requirement that normative legal acts be based on law and justice. It also leads to a violation of the right to rest guaranteed by Article 37 of the Constitution.
Currently, the additional leave established by the Labour Code includes:
– additional leave for working conditions and the specific nature of the job function (Article 115);
– additional leave for length of service (Article 116);
– additional leave for women with children (Article 117);
– additional leave for specialists working in the territories of the Republic of Azerbaijan liberated from occupation (Article 118-1).
After examining the Ombudsman’s request, the opinions of courts and relevant institutions, expert conclusions, and case materials, the Plenum of the Constitutional Court adopted the following decision:
The provision of Article 144.3 of the Labour Code stating that “no compensation shall be paid for additional leave предусмотренных by Articles 115–117 and 118-1 of this Code” was found to be inconsistent with Articles 25 (Parts I and III), 71 (Part II), and 149 (Part I) of the Constitution, as it contradicts the principles of equality and justice in normative legal acts and disproportionately restricts the right to paid annual leave. Its application has therefore been suspended.
Based on the legal positions reflected in the reasoning part of the Plenum’s decision, Articles 144.2 and 144.3 of the Labour Code must be brought into compliance with Articles 25 (Parts I and III), 71 (Part II), and 149 (Part I) of the Constitution in order to ensure the payment of compensation for unused additional leave предусмотренных by Articles 115–117 and 118-1 of the Code.
Until the matter is resolved legislatively, and taking into account the requirements of Articles 25 and 149 of the Constitution, in order to eliminate the existing inequality, upon termination of an employment contract the employee must be paid compensation—calculated in the same manner and amount as for unused basic annual leave—for all unused additional leave предусмотренных by Articles 115–117 and 118-1 of the Labour Code for all working years.
This Decision of the Plenum of the Constitutional Court applies to employment terminations occurring after its entry into force, as well as to relevant cases currently pending before the courts. The decision entered into force on the date of its publication—18 February 2026.
Example 1: An employee hired as an accountant on 22 February 2025 has their employment terminated on 22 February 2026. The employee is entitled to 30 calendar days of basic leave and 4 calendar days of additional leave for length of service, totaling 34 unused days. Compensation must be paid for all 34 calendar days.
Example 2: An employee hired as an engineer on 25 February 2025 has their employment terminated on 25 February 2026. The employee is entitled to 30 days of basic leave, 6 days of additional leave for working conditions, and 2 days for length of service—38 calendar days in total. Compensation must be paid for all 38 days.
Example 3: An employee hired as a driver on 5 October 2025 has their employment terminated on 2 March 2026. The employee is entitled to 8.5 calendar days of basic leave (for the period 05.10.2025–02.03.2026) and 2 days of additional leave for length of service, totaling 10.5 days. Compensation must be paid for 10.5 calendar days.
Example 4: An employee hired as an engineer on 25 February 2025 has their employment terminated on 25 February 2026. The employee is entitled to 30 days of basic leave, 6 days of additional leave for working conditions, and 5 days of additional leave for work in liberated territories—41 calendar days in total. Compensation must be paid for all 41 calendar days.