Arzinger Law Firm

Forums For Adjudicating Employment Disputes

The Local Common Courts have exclusive jurisdiction over claims arising out of employment relations. The decisions of this type of courts may be subject to appeal to the regional Courts of Appeal, and afterwards to the Supreme Court (cassation).


The Main Sources Of Employment Law

The Labour Code of Ukraine dated 10 December 1971, No 322-VIII; The Law of Ukraine "On Remuneration" dated 24 March 1995, No 108-95-BP; The Law of Ukraine "On Employment of Population" dated 05 July 2012 No 5067-VI; The Law of Ukraine "On Vacations" dated 15 November 1996, No 504-96; The Law of Ukraine "On Collective Agreements" dated 01 July 1993, No 3356-XII; The Law of Ukraine "On Compulsory State Social Insurance" dated 23 September 1999, No 1105-XIV, as well as other legislative acts.


National Law And Employees Working For Foreign Companies

Pursuant to the provision of the Ukrainian law “On International Private Law”, labour relations are governed by the laws of the jurisdiction where work is executed, unless international agreements provide otherwise (e.g. employment relations with Polish citizens may be governed by the Polish law based on the Treaty between the governments of Poland and Ukraine dated 24 May 1993).

Ukrainian labour law is applicable to employment relations concluded between Ukrainian nationals and non-national employers situated in Ukraine.

The labour relations of the national employee working in another jurisdiction are subject to Ukrainian law provided that:

    1. The national Employee works for a diplomatic establishment of Ukraine domiciled in another jurisdiction;
    2. The national Employee and the Ukrainian employer conclude an employment agreement that provides that the work shall be done outside Ukraine, if this does not contradict the laws of the country where the work is done;
    3. The law and international agreements of Ukraine provide accordingly.

National Law And Employees Of National Companies Working In Another Jurisdiction

Please see the response to the previous question.


Data privacy

In employment relations, it is important to follow the basic principles of data protection prescribed under Ukrainian law:

  • purpose limitation (data shall be collected for specified, explicit and legitimate purposes and not further processed in a manner that is incompatible with those purposes);
  • lawfulness (each data processing operation shall have a legal basis);
  • data minimization (adequate, relevant and limited collection of data to what is necessary in relation to the purposes of processing).

Depending on the purpose of data processing we may refer to different legal basis:

  • consent (it shall be freely given and can be withdrawn. At the same time, it’s not recommended to process personal data under consent if it is possible to refer to any other legal basis);
  • provisions of legislation (for instance, processing of some personal data by the employer to warrant safe work conditions);
  • performance of contract (it shall contain provisions on the collection and processing of personal data of some definite categories of personal data, for instance under a labour agreement/contract);
  • vital interest (it’s necessary to prove that such processing is need to protect an interest which is essential for the life of the data subject or that of another natural person. Important to note that Ukrainian data protection law will still require consent of data subject when it’s possible to receive it);
  • performance of legal obligation (the employer is obliged to report some data to the state authorities, for instance tax authorities, and it’s allowed to process it under this legal basis);
  • legitimate interest (such interest shall prevail over protection of rights and freedoms of data subject).
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There are also limitations on the processing of sensitive data by the employers. As a rule, the employer is obliged to notify the Ukrainian data protection authority of any processing of sensitive personal data. At the same time, if data processing is necessary pursuant to the rights and obligations of the employer as controller of personal data under the law, there is no need for notification.

In case of transmission of personal data abroad or to any third parties the employer is obliged to notify its employees thereof.

Personal data shall be timely deleted as soon as the purpose of its collection and processing ceases to exist.

It’s also recommended to take measures for securing the accountability principle of personal data processing by adopting policies on personal data, appointing responsible personnel, keeping register on personal data processing etc.

Illegal processing of personal data leads to administrative responsibility under Ukrainian law.

Legal Requirements As To The Form Of Agreement

As a rule, employment agreements are to be concluded in written form. The obligatory written form is applied if:

  • the employee insists on it;
  • the agreement provides for severe working conditions dangerous to the health and safety of the employee;
  • it is required by legislation for certain types of workers/jobs;
  • the agreement on remote work or home-based work is concluded (except for cases when employees are transferred to such work regime temporarily due to pandemic or other emergency)
  • the employee is a minor;
  • the employer is a natural person, and
  • the contract as a special form of the labour agreement is concluded (e.g. with the CEO).

Mandatory Requirements
  • Trial Period
  • Probation period may be established upon agreement of the parties.

    Probation cannot be applied to certain categories of employees (e.g. minors, persons retired from military or alternative (non-military) service, pregnant women, single mothers with a child under the age of 14 or child with disability, internally displaced persons) or if a labour agreement is being concluded for a period of less than 12 months.

    During the probation period the employee has all rights and obligations provided by the labour legislation. The only exception is an additional reason for dismissal of the employee as such who did not pass the probation period.

    Duration of a probation period cannot exceed:

    • one month – for workers (in this case, in order to define the term “worker” the Occupational
    • Classification shall be used, - "blue-collar");
    • three months – for any other employee categories;
    • six months – in certain cases upon agreement with the trade union committee.
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  • Hours Of Work
  • Subject to certain exceptions, the regular working week is 40 hours. For certain categories of employees, the working week is established at the level of 36 or 24 hours, and for some categories irregular working hours are allowed. Overtime work is allowed by the legislation only in exceptional cases and may not exceed four hours within two days in a row or 120 hours per annum and is compensated at double rates.

    Flexible Working hours

    In 2020 and 2021 the Labour Code of Ukraine was amended with regulations on flexible working hours allowing employees to determine their working schedule at their own discretion.

    Such working regime comprises of:

    • flexible working hours;
    • variable working hours (an employee determines the periods of work at her/his own discretion within the normal limits); and
    • break time for rest and meals.

    Flexible working hours shall not be applied at:

    • continuously operating enterprises, institutions, organizations;
    • in case of multi-shift organization of work;
    • in other cases, due to the specifics of activity, when the performance of duties by an employee requires her/his presence within clearly determined working hours;
    • when such regime is incompatible with the requirements for safe working conditions.

    Flexible working hours may be set:

    • at an employee's request (without observing with the notification requirements)
    • by the employer – in case of production necessity with an at least 2-month notice of changed work mode.

    In case of production and technical necessity to perform urgent or unforeseen tasks, the employer may temporarily (for a period of up to 1 month during a calendar year) apply the general work mode to such employees (provisions of part 3 of Article 32 of the Labor Code on changing the essential working conditions do not apply).

    In case of violation of the established flexible working hours regime, additionally to appropriate disciplinary penalties, an employee can be transferred to the general work mode without observance of part 3 of Article 32 of the Labor Code.

  • Special Rules For Part-time Work
  • There are no special rules for part-time employees. The salary for part-time work is usually calculated based on the monthly salary rate in proportion to the time actually worked for the working month.

    Certain employees (e.g. pregnant women) have preferences in establishing the part-time work regime upon their request.

  • Earnings
  • The monthly salary for the full time worked by the full-time employee must not be lower than the legislatively established minimum wage, which is subject to review on annual basis and approval by the law on the state budget for the respective year. The current monthly minimum wage amounts to appr. EUR 180.00 (UAH 6,000.00).

  • Holidays/Rest Periods
  • Rest periods

    Midday break – from half an hour up to 2 hours, must be provided not later than 4 hours after the start of the workday. If the type of work does not allow the employee to enjoy the midday break in full, the special short breaks must be provided, as well as places for food consuming must be organized by the employer.

    Daily rest – not less than twice the lengths of the shift (in case of work in shifts). All the time between working hours of the two consequent working days of the employee pursuant to the Internal Labour Regulations of the employer is deemed to be the daily rest.

    Weekly rest – a general day-off is Sunday (still may be altered). Usually, there are one or two days-off for all employees depending on their working schedule established by the labour agreement and/or Internal Labour Regulations of the employer. The duration of the weekly rest period must not be less than 42 subsequent hours.

    Public holidays and free days (religious holidays)

    Public holidays (8 per year) and free days (3 per year) are days-off, as envisaged by the legislation. If a public holiday or a free day concurs with a day-off, the day-off is postponed to the next working day after such public holiday or a free day.

    Vacations

    All vacations are calculated based on calendar days.

    The statutory paid annual vacation is 24 calendar days (basic vacation). For certain categories of employees, the law provides for a longer vacation period, for example:

    • employees with disability – 26 or 30 calendar days depending on the group of disability;
    • employees under the age of 18 – 31 calendar days.

    There are also some additional vacation types in Ukraine, for example:

    • additional annual vacation for work under arduous and harmful work conditions – up to 35 calendar days;
    • additional annual vacation for special work nature (e.g. for non-standard working hours – up to 7 calendar days);
    • additional annual vacation for employees with two or more children under the age of 15 or an adult child of type A, group I of disability – 10 calendar days;
    • additional annual vacation for the participants of military actions, war-disabled persons –14 calendar days;
    • additional study vacation – for the period of passing the exams;
    • research leave – for scientists – up to 4 months;
    • maternity leave – 70 calendar days prior to the birth plus 56 calendar days after the birth (70 in case of complications);
    • paid leave for a father (or another adult family member of a single father/mother, such as a grandparent) to take care of the child after birth – up to 14 calendar days;
    • childcare leave up to three years of age (6 years – if the child requires home care);
    • adoption leave – 56 calendar days (70 calendar days in case of adoption of two or more children);
    • unpaid vacations – up to 15 calendar days if negotiated or for the period established by law (if the employer is obliged to provide such leave).

    All vacations may be roughly divided into two types depending on the frequency:

    • annual vacations (e.g. for employees with children);
    • one-time vacations (e.g. research leave, adoption leave, etc.).

    Please also be aware that annual vacations are provided depending on the vacations type:

    • for a calendar year calculated from 1st January until 31st December (e.g. additional vacation for employees with children);
    • for a year calculated from the date of beginning of employee's work (e.g. basic annual vacation, additional annual vacation for special work nature.).

    The total number of days of annual vacations (both basic and additional) cannot exceed 59 calendar days. In addition to that an employee may use one-time vacations, if there is a necessary ground.

    The Collective Bargaining Agreement and/or labour agreements may contain higher guarantees for employees regarding these matters.

  • Minimum/Maximum Age
  • The minimum age for employment is 16 years (14 or 15 in certain cases upon approval by the parents/legal guardian and respective child-caring state authority).

    There are no limits for the maximum employment age. There also may be age limitations for certain state (civil) service and military service.

  • Illness/Disability
  • The employees in Ukraine are insured by their employers (and at the employer's expense) in case of illness or temporary disability via payment of the Unified Social Contribution (mandatory payment). The first five days of illness or temporary disability are to be reimbursed by the employer subject to provision of the medical certificate by the employee. The State Social Security Fund reimburses loss of earnings to the employee for the period of illness or temporary disability starting from the 6th day of illness or temporary disability (with some exceptions).

    Due to the COVID-19 pandemic Ukrainian legislation was supplemented with the provisions on possibility to grant a sick leave and sick leave payment of 50% of the average daily earnings regardless of the work seniority (100% for medical workers) to the employees on self-isolation (if instructed by the doctor and under medical observation).

  • Location Of Work/Mobility
  • The Law of Ukraine defines workplace as a place (space) at which the employee permanently or temporarily provides work and which must be determined, in particular, under the employment agreement (contract).

    The other type of work location is called home-based. The workplace of home-based workers coincides territorially with their place of residence. The home-based workplace has a fixed area and the technical means necessary to manufacture products, render services. An employee's fixed workplace may not be changed without the parties' agreement, except when reasons occur that render an employee's work impossible

    Certain employees have a pre-emptive right to work from home (pregnant women, women with children under 15, persons with disabilities and their family members, persons who, for objective reasons, cannot be employed directly at the employer's location, etc.).

    Home-based work can be established only for persons who have or may be taught the necessary practical skills.

    Under the agreement on home-based work employees are subject to the employer's general work mode, unless otherwise provided by the labour agreement.

    Under the agreement on remote work (telework) an employee shall independently determine her/his workplace anywhere outside the employer's premises/territory and is responsible for ensuring safe and harmless working conditions. It is also possible to combine remote work with working on the employer's territory. One of the differences from the home-based work is that under remote work agreement the work is performed with the use of information and communication technologies.

    The agreement for remote work may be concluded only for work that does not imply any dangerous and harmful production (technology) factors.

    Under the agreement on remote work an employee distributes the working time at her/his own discretion, (s)he is not subject to internal labor regulations, unless otherwise determined by the labour agreement. Also, employees are entitled to right to disconnect.

    In both remote and home-based work modes the employer is responsible for the safety of the equipment provided to the employees (if any) as well as for conducting occupational safety trainings, but employees are responsible for ensuring their occupational safety at their workplaces.


    Work mobility

    The work mobility results in transfer to different location together with the company and transfer within the employer's units.

    Transfer to different location together with the company ("переведення на роботу в іншу місцевість разом із роботодавцем" in Ukrainian)

    Relocation of the business (to another city, region) is regarded as a significant change in the employment agreement. Thus, consent of the employee is required. The employer is to notify the employee about it at least 2 months prior to the event. In case the employee does not accept the changes proposed by the employer the employment agreement is subject to termination. Severance pay will also be due to a dismissed employee in the amount of at least 1 average monthly salary. All reasonable cost connected with relocation of the business incurred by employee is subject to reimbursement by the employer.

     

    Mobility clauses can be included into the employment agreement. Where the job requires travel to other temporary locations, it is normal for the employer to reimburse all reasonable travel expenses.

    Transfer within the employer's units located at the same town, city, etc. ("переміщення" in Ukrainian)

    The employee may be transferred (relocated) within the employer's units located at the same town, city, etc. without change in his/her labour functions on the permanent or temporary basis without his/her consent.

    If such transfer has led to the decrease in the salary of the employee, he/she is entitled to retain his/her previous average salary for 2 months (or 2 weeks - if employee was transfered to another position with a lower salary due any changes in the organization of work and production).

    Business trips

    The employers have the right to send employees on business trips and unreasonable refusal of the employee from the assigned business trip may be a ground for the application of disciplinary measures to such an employee. However, there are certain restrictions regarding organization of business trips:

      1. A pregnant woman, a woman with a child under 3 years of age, or a single father/guardian/one of the adoptive parents with a child under 3 years of age may not be sent on a business trip by the employer; and
      2. a woman or a single father/guardian/one of the adoptive parents with a child under 14 years of age or a child with disability of group I subgroup A may not be sent on a business trip by the employer without prior consent of the employee.

    If sent on a business trip, employees must be paid daily allowance and costs for transportation and accommodation.

    Also, certain employees may work on the itinerant work terms while having no fixed workplace and performing their work from different locations based on the employer's assignment.

    The Collective Bargaining Agreement and/or labour agreements may contain higher guarantees for employees regarding mobility matters.

  • Pension Plans
  • The employer is required to make obligatory payments to the State Pension Fund on behalf of employees. The rate of the Unified Social Contribution is 22% of an employee’s remuneration (is paid by the employer). Any other social insurance (voluntary) is left to the employer’s discretion.

  • Parental Rights (Pregnancy/ Maternity/ Paternity/ Adoption)
  • It is prohibited to dismiss certain categories of employees, such as pregnant women, women with a child under 3 years of age (6 – if the child requires homecare), and single mothers with a child under 14 years of age or child with disabilities, single fathers, adoptive parents/guardians, except for some cases (e.g. company's liquidation with the obligatory subsequent employment).

    Leaves:

    • maternity leave – 70 calendar days prior to the birth plus 56 calendar days after the birth (70 in case of complications);
    • childcare leave up to three years of age (6 years – if the child requires home care) (may be used by any of the parents or another child-caring member of the family);
    • adoption leave – 56 calendar days (70 calendar days in case of adoption of two or more children) (may be used by any of the parents or another child-caring member of the family);
    • additional annual paid leave for child-care (for mothers or single fathers with a child of up to 14 years of age or older child with disability of group 1 sub-group A) – 10 calendar days (17 – if there are two or more grounds for such leave);
    • paid leave for a father (or another adult family member of a single father/mother, such as a grandparent) to take care of the child after birth – up to 14 calendar days;
    • additional unpaid leaves as prescribed by the relevant laws for specific aims (e.g. in case of necessity to care for a child whose school or kindergarten has declared a quarantine).
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    The Collective Bargaining Agreement and/or labour agreements may contain higher guarantees for employees regarding these matters.

  • Compulsory Terms
  • Though the legislation doesn't explicitly envisage compulsory terms of the employment agreement, in practice the following obligatory terms may be singled out:

    • the names of the parties to the agreement;
    • the date of the employment commencement;
    • the remuneration and terms of its payment;
    • the hours of work;
    • the place of work;
    • the job title/job description.
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  • Non-Compulsory Terms
  • The parties to a labour agreement are free to agree any other terms in addition to the compulsory provisions, provided that these terms do not contradict the law (except for cases when it is allowed – e.g. additional grounds for termination of the labour contract as a special form of the labour agreement (may be concluded only with certain categories of employees, if envisaged by laws – e.g. CEOs, members of the executive body of the company, etc.).


Types Of Agreement

There are several criteria for classification of labour agreements:

  • depending on the term for which labour agreements are concluded:
    • -labour agreements concluded for unlimited period of time;
      -fixed-term labour agreements;
      -labour agreements concluded for the term of performing certain type of works;
  • depending on the form in which labour agreements are concluded:
    • -written labour agreements;
      -labour agreements concluded in oral form (are formalized solely by the internal personnel order of the employer);
  • depending on the type of engagement into labour activity:
    • -part-time labour agreements;
      -full-time labour agreements;
  • depending on the type of the employer-employee relations:
    • -labour agreement with the employer as primary employer;
      -labour agreement with the employer as secondary employer (additional labour agreement)

There are also certain types of labour agreements related to short-term and seasonal types of work; however, they are currently regulated only by the outdated legislative acts from the Soviet era.

Also, there is a special type of labour agreement – labour contract, which may be concluded only with a limited number of employees as envisaged by the law (e.g. CEOs of the companies, members of the executive body etc.).


Secrecy/Confidentiality

As a rule, there is no implied duty for the employee to respect the confidentiality of the employer’s commercial and business information in Ukraine. To protect secret and confidential information, the employers must include such a provision in the employment agreement and/or job instruction, and/or internal regulations or conclude a separate NDA. It is recommended to specify the type of information that is regarded as a trade secret, and therefore protected, to prevent future disclosure in such NDA.

Moreover, the LLC's officials cannot disclose the information that constitutes trade secret or is confidential (in case of breach of such duty – the official may be dismissed immediately without any compensation granted). This prohibition also applies for the period of one year after the termination of the labour agreement (contract) with such an official, unless otherwise specified in the agreement (contract) (e.g. longer).


Ownership of Inventions/Other Intellectual Property (IP) Rights

Ukrainian law provides creation of IP objects in the course of labour relations, but the classic “work for hire” concept is not directly applicable here because of the following:

  • there are different approaches to IP rights assignment under Ukrainian law:
      1. as regards copyright law the Civil Code of Ukraine and the special laws has a different regulation of IP transfer between the employer and employee. Under the special law of Ukraine «On Copyright and Related Rights» economic right to works shall be vested in the employer, unless otherwise stipulated in the agreement. At the same time, the Civil Code of Ukraine stipulates that economic IP rights belong to both the employer and employee, unless otherwise stipulated in the agreement between the employee and employer;
      2. as regards patents, Ukrainian law provides that an invention for hire shall be created with experience, manufacturing knowledge, manufacturing secrets and equipment of the employer. Under the special patent laws the employer has the right to obtain a patent for an employee’s invention, utility model and industrial designs for hire. In such a case, the employee shall submit to the employer a written report on the created employee’s invention and the employer shall file the application for obtaining such patent to the Office. Thereafter, an agreement must be concluded on the amount and conditions of the remuneration for such an invention or utility model. Otherwise, the right to obtain a patent shall pass to the employee and preference for acquisition of a license shall be given to the employer.
      3. In view of this, it is recommended to include clear provisions on IP rights assignment into the respective agreements/contracts.

        • essential provisions shall be included into the agreements/contracts (i.e. it is necessary to identify created IP objects, scope of transferred rights, period, territory and payment for transfer IP rights etc.);
        • it is still necessary to certify the creation of IP objects and conclude acceptance certificates;

        it is recommended to fix the creation of IP objects as a part of labour duties under job descriptions. Technical specification is also advisable.


    Pre-Employment Considerations

    Ukrainian labour and employment laws do not envisage any rules on pre-employment relations. Also, a job offer is not deemed to be a proper legal document that may entail any consequences for the parties.


    Hiring Non-Nationals

    Non-nationals may be employed by Ukrainian employers subject to prior obtaining of the Ukrainian work permit according to the procedure, established by legislation.

    A work permit may be issued in case of payment of salary in the amount of not less than 10 minimal salaries (5 minimal salaries in some cases) per month (except for special categories of foreign employees – IT-specialists, graduates of a university that is included into the list of world top 100 universities, participants/founders/beneficiaries of a Ukrainian legal entity, highly paid professionals etc.).

    A work permit is issued as a rule for one year (may be issued for a longer period for special categories of foreign employees – up to 3 years) and is subject to renewal.

    If a non-national has a permanent residence permit for living in Ukraine, the employer does not need to obtain any work permit.


    Hiring Specified Categories Of Individuals

    There are restrictions on the admission to certain hazardous activities, and restrictions on the types of work that vulnerable groups (e.g. children, persons with disability or pregnant women) can be required to undertake.

    The current legislation of Ukraine also provides a quota of workplaces for persons with disabilities in the amount of 4% of the average number of employees per annum o,; if there are 8-25 employees, in the amount of one workplace.


    Outsourcing And/Or Sub-Contracting/Temporary Agency Work

    Labour and employment legislation are not applicable to the Outsourcing and Sub-contracting relations (civil law contracts/relations).

    Temporary Agency Work as a non-standard form of work was partly implemented in 2013 via the so called "outstaffing"/personnel lease introduced into the Law of Ukraine "On Employment of Population". Under the respective provisions of the mentioned law one employer may use the workforce of another employer (specifically hired by such other employer for provision to the employer-client) under the contract between them (subject to certain limitations and requirements).

    The legislation in this part still has a lot of gaps and outstaffing belongs to the grey zone, though it is rather popular in Ukraine. It is worth to mention that the government has recently announced the reform in the sphere of labour laws that will also consider changing and adapting of the Temporary Agency Work (currently, outstaffing) to the Ukrainian realities.

    The Collective Bargaining Agreement may contain certain restrictions regarding these matters.

    Changes To The Agreement

    According to the Ukrainian legislation in case of changes in production and labour organization it is possible to change the essential work conditions (system and amount of payments, privileges, work regime, establishment or cancellation of part-time work, professions overlapping, change of categories or name of positions etc.). In such a situation, the employer shall provide respective employees with at least two months prior notice before the changes come into force. If the previous essential work conditions cannot be preserved and the employee does not agree to continue work under the new conditions, the labour agreement shall be terminated with provision of severance payment in the amount of not less than one average monthly salary.

    When changing the essential conditions of work of a member of the primary trade union organization, the consent of the elective body of the primary trade union organization must be obtained.

    The Collective Bargaining Agreement and/or labour agreements may contain higher guarantees for employees in this case.


    Change In Ownership Of The Business

    Change in ownership of the business does not affect the employment relations with the employees. However, change in ownership is a ground for re-concluding the Collective Bargaining Agreement (if any). If the new Collective Bargaining Agreement was not concluded within a year after change in ownership, the previous one (effective as of the date of change in ownership) ceases to be effective.


    Social Security Contributions

    All employees are subject to the following categories of the state social security:

      1. insurance against temporary disability;
      2. insurance against professional diseases or accident at work;
      3. insurance against unemployment;
      4. pension insurance.

    The contributions for the mentioned categories of the state social security must be paid by the employer (at its cost) in the form of the Unified Social Contribution (current rate - 22% of the employee's gross income payed by the employer to the employee).


    Accidents At Work

    The employers have a duty to provide safe working conditions for employees. The employers must conduct fire and occupational safety instructions to its employees before they start their work. If the employee is injured, suffers from professional disease or dies due to an accident at work or because of severe/improper working conditions, the employer is obliged to start an investigation as well as notify the respective state authority.

    It is compulsory in Ukraine for an employer to take out insurance to cover potential claims by employees for injury/death/professional disease in the workplace (via Unified Social Contribution). The insurance covers loss of earnings paid on a regular basis, unless the employee regains the ability to work. Employees are also entitled to as well as one-off compensation paid in cases of death or significant harm to health and working ability. The insurer for such cases of professional diseases or accidents at work is the State Social Security Fund. In some cases where the employer violates the requirements of fire and/or occupational safety, its management, responsible to control and preserve safety at working place may also be criminally liable.


    Discipline And Grievance

    There are two types of disciplinary measures that may be taken against employee for violation of the labour discipline: dismissal (in cases envisaged in the Labour Code) or written warning (reprimand). Also, some other disciplinary penalties may apply to some categories of employees by legislation, disciplinary statutes and regulations (relevant only for specific spheres of activity or economy – e.g. in military sphere, medical sphere, etc.).

    A disciplinary penalty should be applied no later than one month after the day of revealing of the employee’s action, but not later than six months after the violation was committed. Before the application of a disciplinary penalty the employer must request a written explanation from the employee.

    For every breach, only one disciplinary penalty can be applied.

    When choosing the type of penalty, the employer must consider the degree of the violation, employee's guilt, the harm caused by the violation committed, relevant circumstances and the employee’s previous work record.

    An employee may argue improper disciplinary penalty in court.

    When imposing disciplinary matter to the member of the primary trade union organization, the consent of the elective body of the primary trade union organization must be obtained.


    Harassment/Discrimination/Equal pay

    The Labour Code precludes discrimination based on race, colour, ethnic and social origin, religious, political and other beliefs, gender identity, sexual orientation, property status, place of residence, suspicion or presence of HIV/AIDS, membership in a trade union, participating in the strike, addressing or intending to go to court or other bodies to protect their rights or to support other employees in protecting their rights, reporting possible corruption or corruption-related offenses, linguistic, or other characteristics.

    Under the Law of Ukraine On Ensuring Equal Rights and Opportunities for Women and Men taking measures to prevent and protect against sexual harassment and other gender-based violence falls into the employers' obligations. Moreover, they shall create equal work conditions as well, while implementing equal pay for women and men with the same qualifications and working conditions. The employers are restricted from specifying gender in a vacancy advertisement, except for certain types of work which may be performed by a person of a specific gender only.

    Also, there are few general laws on non-discrimination that also apply to the employment sphere

    Court disputes arising from the employee's claims against harassment or discrimination at the workplace are not common in Ukraine.

    Recently the Labour Code was also supplemented with the norm (Art. 60-2) allowing employees who suffered discrimination at work request a temporary transfer to remote work (for up to 2 months) if it is possible based on the employee's job function and employer's availability to provide for such working conditions.


    Compulsory Training Obligations

    Generally, there are no compulsory training obligations for employees, except for certain categories of professionals/workers subject to regular certification trainings (medical workers, teachers, attorneys, judges, etc.).

    The Collective Bargaining Agreement and/or labour agreements may contain higher guarantees for employees and/or additional obligations for the employer regarding this matter.


    Offsetting Earnings

    As a rule, the offsetting earnings are not usual for labour relations. There are two ways to conduct the deductions from the employee's salary:

      - upon the employee's written application and agreement between the employee and employer on return of loan provided by the employer to the employee. Such deductions may be conducted on monthly basis or as a one-time deduction.

      - pursuant to internal order/ court decision on deductions from the employee’s salary (e.g. to cover/reimburse the employer's losses occurred because of employee or to provide sums arrears to third parties in cases prescribed by law (e.g. alimony payments)). Such deductions may be done subject to the limits to the amounts that may be deducted from one monthly salary of the employee (the maximum is 70 % of the monthly salary).


    Payments For Maternity And Disability Leave

    Women are entitled to 70 days of maternity leave prior to the expected delivery date and 56 (sometimes 70 – in the case of delivery of two or more children and in case of complication of childbirth).

    The payment for pregnancy and delivery leave is provided based on the sick leave medical certificate. When calculating maternity pay, the employer takes into account an employee’s average salary for 12 months prior to maternity leave.

    A woman (single father, adoptive parent or child's guardian) is also entitled to an unpaid leave until the child reaches the age of 3 years (6 years - if the child needs home care).


    Compulsory Insurance

    See the sections on Social Security and Pension Plan.


    Absence For Military Or Public Service Duties

    For employees, called up for fixed-term military service, military service for the officers by conscription, military service during mobilization, for the special period or enlisted by contract, including reenlistment by a new contract for military service, the place of work, position and average salary must be retained during the special period (since 2014, as interpreted by the Supreme Court). At the time of performance of state or public duties, if, under the current legislation of Ukraine, these duties can be fulfilled during working hours, employees are guaranteed to retain a place of work (position) and average earnings. Employees involved in the performance of the military or public service duties are provided with guarantees and benefits.

    The Collective Bargaining Agreement and/or labour agreements may contain higher guarantees for such employees.


    Works Councils or Trade Unions

    Citizens of Ukraine are entitled to participate in professional unions in order to protect their labour, social and economic rights and interests. A trade union is a voluntary, non-profitable non-governmental organization of citizens united by mutual interests by the nature of their professional (labour) activity (study). Trade unions are established to represent, exercise and protect labour, social and economic rights and interests of their members and can have a status of primary, local, district, regional, republican, or all-Ukrainian ones. Foreign citizens and stateless persons are not allowed to establish trade unions, but are entitled to join them, if this is provided by their charters.

    The elected body of a primary trade-union organization has the following rights:

    • to conclude and control the implementation of collective agreements with the employer;
    • to ensure that the employer observes and ensures the working safety regulations, other legislation concerning employees’ rights;
    • to decide on provision of the consent to the employer for the dismissal of employees in certain cases defined by law;
    • to approve a schedule of vacations of employees, shifts schedules and certain other internal documents of the employer;
    • to participate in social development of company, improvement of working conditions of employees, etc.

    There is no such institute as Work Council in Ukraine; however, labour collectives of the employers may assemble (in a form of the General Meeting of the Labour Collective or Labour Collective Conference) and elect their representatives for further participation in collective bargaining or other related matters.

    The Collective Bargaining Agreement may contain higher guarantees for the employees-members of the trade unions and/or additional obligations of the employer in respect of the trade unions and their members as compared to the legislative rules.


    Employees’ Right To Strike

    According to the Constitution of Ukraine employees have the right to strike for protection of their economic and social interests. Prohibition of a strike is possible only in cases envisaged by law. Strikes are also prohibited during the effect of the martial law. Also, there are certain categories of employees that are not allowed to strike - policemen, firemen, militaries, etc. (this ban is aimed at protecting the State's and social welfare).


    Employees On Strike

    Participating in a strike, except when the strike is illegal, shall not be treated as a breach of the employment agreement and may not be considered as a basis for bringing a disciplinary action against an employee. However, organization of, or participation in, an illegal strike, will constitute a violation of the employment agreement.

    Employees participating in a strike are not entitled for any payment for the whole period of the strike. Non-striking employees, prevented from reaching their workplace due to the strike, shall be paid an average salary for the whole period of the strike.


    Employers’ Responsibility For Actions Of Their Employees

    The employer bears civil responsibility for losses caused by an employee in the course of work (the employer later may claim for damages to be compensated by the employee to the employer within the limits established by law). The employer is not liable for the employee’s actions committed outside the course of employment or not related to the employee's work functions.

    Procedures For Terminating the Agreement

    Parties may terminate employment only in limited circumstances listed by the Labour Code. The Labour Code of Ukraine provides exhaustive list of grounds for termination of a labour relations, among which are the following:

    • agreement of the parties;
    • expiry of the fixed-term agreement;
    • employee's will (with 2 weeks' notice, unless there are certain significant reasons that impede employee from continuing his/her work);
    • grounds arising from the employer's initiative:
    • redundancy;
    • disciplinary violations (one-time gross violation – applicable for certain categories only (e.g. CEO, chief accountant), systematic non-performance of duties (if there are two or more warnings applied to employee during a year), truancy, alcoholic intoxication, etc.);
    • reinstatement of the wrongfully dismissed employees
    • non-appearance at work for more than 4 months due to temporary disability;
    • recall of officials (applicable to certain categories of employees only), etc;
    • other grounds:
    • refusal of the employee to be transferred to work in another region together with the enterprise as well as refusal to continue work due to change of the essential work conditions;
    • coming into force of a judgment, pursuant to which the employee is sentenced to imprisonment or any other punishment excluding possibility to continue work;
    • reasons as provided by the labour contract;
    • reasons provided by other laws, etc.

    The Collective Bargaining Agreement and/or labour agreements may contain higher guarantees for employees regarding these matters.


    Instant Dismissal

    The right to instant dismissal may be used only in case of recall of the company's officials (CEO or board members) with the obligatory payment of severance payment in the amount of at least 6-months average salary.


    Employee's Resignation

    In case of termination on notice at the employee's initiative, the notice period is 2 weeks (may be reduced if there is any good reason for that).


    Termination On Notice

    Labour Code of Ukraine does not provide for such ground for termination of labour relations at the employer's initiative as termination on notice, even if both parties agreed to that in the labour agreement (except for cases when the contract as a special form of the labour agreement is concluded).


    Termination By Reason Of The Employee's Age

    The Labour Code of Ukraine does not provide for such ground for termination of labour relations. In case of retirement, the termination is usually formalized pursuant to other grounds (mutual agreement or termination at the employee's initiative).


    Automatic Termination In Cases Of Force Majeure

    The Labour Code of Ukraine does not provide for such ground for termination of labour relations, even by the will of both parties (except for cases when the contract as special form of the labour agreement is concluded).


    Collective Dismissals

    Should the need arise to layoff part or all of its staff (par. 1 part 1 Art. 40 of the Labour Code), the employer is obliged:

    • to consult with the trade union (if any) at least 3 months in advance;
    • to warn the employees at least 2 months in advance;
    • to notify the employment service of the lay-off, if it is massive:
    • 10 or more employees within 1 month – for enterprises with 20 to 100 employees;
    • 10% or more employees within 1 month – for enterprises with 101 to 300 employees;
    • 20 % or more employees within 3 months – regardless of the number of employees;
    • to make severance pays in amounts not less than the average monthly salary.

    There are limitations for this type of dismissal (e.g. employees’ seniority and other advantages must be taken into consideration if several employees occupying the same position are made redundant; transfer to other suitable position (if any) must be proposed during the whole notification period, ban on lay-off of pregnant women, women with a child of the up to 3 years of age (in certain cases 6 years), single fathers, etc.).

    The Collective Bargaining Agreement and/or labour agreements may contain higher guarantees for employees regarding these matters.


    Termination By Parties’ Agreement

    The parties have the right to terminate their relations at any time pursuant to their mutual agreement. No severance payment is required in this case, unless i negotiated by the parties.


    Directors Or Other Senior Officers

    Apart from other general grounds for termination of the labour relations, the director of the company or its branch, or his or her deputy, chief accountant, his or her deputy and some state officials may be dismissed due to gross violation of their employment obligations.

    Another ground to dismiss the director is his/her deliberate action resulting in untimely salary payment or payment of a salary below the statutory minimum.

    A trade union can initiate the dismissal of a company's CEO for violating labour legislation, not participating in collective bargaining agreement negotiations, or not fulfilling his or her obligations under that agreement and violating other laws that govern collective bargaining agreements.

    Upon decision of the company's shareholders, the company's senior officers belonging to the company's officials in terms of the labour, corporate and other legislation may be dismissed immediately without any reason with payment of severance pay of at least six months average salary ( recall of official).

    There are also some special rules stipulated under the Law on LLC. The officials of an LLC include members of the executive board, supervisory board and other officials envisaged by the charter of the company.

    Additionally, the LLC's officials (members of the executive body, supervisory board or other persons enlisted in the charter) can be dismissed without any compensation in case of:

    • receiving a reward from the LLC not stipulated in the agreement (contract);
    • not providing the company with a list of their affiliates;
    • not reporting the conflict of interest to the executive body, the supervisory board (if any) or the participants;
    • disclosing the confidential information or trade secrets of the company;
    • breaching of the non-compete clause envisaged by the Law on LLCs (applicable only for the head and members of the executive body).

    If directors or senior officers belong to the category of employees with whom it is allowed to conclude the contract as a special form of a labour agreement under the law, they may also be dismissed pursuant to the additional grounds provided for by such a contract.


    Special Rules For Categories Of Employee

    There are special regulations for civil servants: judges, policemen, firemen, custom officers, state servants, etc.

    There are also additional guarantees provided by the legislation for certain socially vulnerable categories of employees: persons with disability, minors, pregnant women, employees with children etc.


    Whistleblower Laws

    Though the Labour Code does not directly contain any provisions on whistle-blowers' protection, respective rules and guaranties were introduced by the Anti-Corruption Law in 2016 (with certain amendments in 2019).

    The whistle-blowers, their relatives cannot be denied employment, they cannot be dismissed or forced to dismissal, no disciplinary or other negative actions can be taken against them due to or in connection with their actions on reporting the alleged violation.

    Persons dismissed due to reporting an alleged violation are subject to instant reinstatement at their previous job (position) and must be paid an average salary for the period of forced absence pursuant to the respective general rules envisaged by the Labour Code for payments in case of wrongful dismissal. This rule applies also if the persons were transferred to another permanent lower paid job in connection with reporting the alleged violation.

    The whistle-blowers, their relatives, can claim compensation of six average salaries, if such persons refuse to be reinstated (two year's average salary if their reinstatement at work is not possible), provided that their dismissal occurred due to reporting an alleged violation.


    Specific Rules For Companies in Financial Difficulties

    The notice period for termination of employees due to liquidation, reorganization, bankruptcy, or restructuring of the entity and staff redundancy must be at least two months (with at least 1-month average salary as a severance pay). The payments to employees have priority over other company's debts. Please also see the Collective Dismissals section.

    The Collective Bargaining Agreement and/or labour agreements may contain higher guarantees for employees regarding these matters.


    Special Rules For Garden Leave

    Employment and labour legislation of Ukraine does not provide for possibility to use the Garden Leave. The most proximate form of structuring relations in respective cases is temporary removal (suspension) of the employee from fulfilment of his/her job duties, however it is allowed only in limited number of cases envisaged by laws (in case of criminal suspension by the respective ruling of the criminal court, corporate suspension of the member of the executive body, suspension of the employee who refused to pass medical examination etc.).


    Restricting Future Activities

    Any clause restricting the future possibility of employment of an employee contradicts the Constitution of Ukraine and, therefore, is unenforceable.


    Severance Payments

    The amounts of statutory severance payments are envisaged in the Labour Code and certain special laws (aimed at protection of special categories of employees – e.g. military veterans). The minimum amount of statutory severance payment falls within the range from at least 1-6 average monthly salaries of the employee (depending on the ground for dismissal) calculated based on the salary and other payments received by the employee during 2 months prior to the dismissal date.

    As a rule, severance payments must be paid in case of dismissal at the employer's initiative (the list of such grounds is in the respective article of the Labour Code, but not all dismissals at theemployer's initiative entail payment of the severance payment) or in case of dismissal due to refusal of the employee to continue his/her work after the change of his/her essential conditions of work.

    The Collective Bargaining Agreement and/or labour agreements may contain higher guarantees for employees regarding these matters.


    Special Tax Provisions And Severance Payments

    There are no special tax provisions regarding severance payments, - they are taxed as salary.


    Allowances Payable To Employees After Termination

    There is no allowance that shall be paid to the employee after termination of the labour relations.

    All settlements must be conducted not later than on the last day of work of the employee.


    Time Limits For Claims Following Termination

    The statutory time limit for claims following termination constitutes one month after the date of receipt of the copy of the dismissal order and/or labour book from the employer by the claimant.

    Specific Matters Which Are Important Or Unique To This Jurisdiction

    There are many outdated labour and employment legislative acts still valid in Ukraine (there are some acts dated as of middle of the 1920s) that were not adapted to the new queries and challenges of the quickly changing world. To this end, a labour reform was announced by the Ukrainian government to be accomplished in 2020-2021. It includes adopting new laws to amend the existing Soviet-era Labour Code. Specific laws in the sphere of employment of population, digitalization of employment paperwork, relations with trade unions, collective bargaining and dispute, strikes and lockouts, as well as occupational safety are also planned to be adjusted.



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    Contact a Contributing Author:
    Alesya Pavlynska
    Arzinger Law Firm
    Ukraine


    Disclaimer:

    © 2021, Arzinger Law Firm. All rights reserved by Arzinger Law Firm as author and the owner of the copyright in this chapter. Arzinger Law Firm has granted to Multilaw non-exclusive worldwide license to use and include this chapter in this guide and to sublicense Lexis Nexis, a division of RELX Inc. and its affiliates certain rights to use and distribute this Guide.

    The information in the How to Hire and Fire Guide provides a general overview at the time of publication and is not intended to be a comprehensive review of all legal developments nor should it be taken as opinion or legal advice on the matters covered. It is for general information purposes only and readers should take legal advice from a Multilaw member firm.

    Publication Date: June 2021