Continuing Reform of Labour Legislation
On 1 July 2022, the Parliament of Ukraine adopted draft Law of Ukraine “On Amendments to Some Legislative Acts of Ukraine on Optimization of Labour Relations” № 2352-IX (the “Law”). The Law entered into force on 19 July 2022.
The Law introduces important changes to the Labour Code of Ukraine, the Law of Ukraine "On Arrangement of Labour Relations under Martial Law" and some other laws. It provides for changes to the procedure for hiring and dismissing employees, as well as additional opportunities for employers to promptly respond to wartime challenges.
In particular, the Law provides for the following key changes and/or addresses the following aspects of employment relations:
· New grounds for employment termination:
- the inability to procure an employee with work stipulated in the employment agreement due to the destruction (absence) of conditions, means of production or property of the employer as a result of hostilities;
- the employee’s absence at work and information about the reasons for such absence for more than four months in a row;
- the death of the employee or the natural person-employer, or declaring him/her dead or missing.
· Shortened layoff procedure for companies suffered from war
It applies in case of the dismissal of employees due to the inability to procure them with work because of the destruction (absence) of conditions, means of production or property of the employer as a result of hostilities. Unlike the general layoff procedure, the shortened procedure provides for a ten-day prior notice to the employees, trade union and, in case of mass layoff - the state employment service.
· Reformed procedure for suspending employment agreements:
- Only inability of both parties to perform their obligations under the employment agreement is considered as a valid reason for the agreement's suspension.
- Suspension neither can be the hidden punishment and nor applies to heads and deputy heads of state bodies, as well as local self-government officials who hold elective positions;
- The employment agreement may be suspended for the period which does not exceed the martial law period;
- Suspension shall be formalized by the employer's order, which, in particular, must contain the information on the reasons for the suspension, including the inability of both parties to perform their obligations and the method of exchanging information, the period of suspension, the number, categories and full names, the tax ID or passport number of the relevant employees, conditions for the renewal of the employment agreement;
- If suspension of the employment agreement applies to the officials of state bodies and local self-government bodies, the employer must submit the order for the approval to the military administration, which exercises its powers in the relevant territory;
- A special procedure applies to the cancellation and appeal of the suspension of employment agreements.
· Cancellation of employer’s obligation to pay average salary to employees called into or enlisted for military service
Now, the employer is obligated to keep only the place of work and the position for such employees.
· Cancellation of a two-month notice period for worsening labour remuneration conditions
· Extension of scope of employer’s notification obligations
The law extends the scope of information to be notified by the employer to the employee before the commencement of work (art. 29 of the Labour Code), namely it must in a manner agreed with the employee notify the latter about the following:
- the place of work, employee’s job functions (position and list of job duties), date when the employee starts to perform their duties;
- the designated workplace, provision of tools necessary for the work;
- rights and obligations, working conditions;
- the presence at the workplace of dangerous and harmful production factors that have not yet been eliminated, and the possible consequences of their impact on health, as well as the right to benefits and compensation for working under such conditions as set forth in law and the collective agreement;
- rules of the internal work schedule or the conditions for establishing the working hours, the duration of working hours and rest time, as well as the provisions of the collective agreement (if any);
- the labour protection, industrial sanitation, occupational hygiene and fire protection trainings;
- the organization of professional trainings for employees (if any);
- the duration of the annual leave, terms and amount of pay;
- the procedure and terms for notifying of employment agreement termination which the employee and the employer must comply with.
It also obliges the employer to provide on the payment day a detailed breakdown of all amounts accrued and paid to the employee at the dismissal.
· Amendments to provisions related to working hours under martial law:
- An employer can increase the normal duration of working hours during the martial law period to 60 hours per week (40 hours – for those who have reduced working hours) only for employees employed at critical infrastructure facilities. In this case the labour remuneration shall be increased pro rata to increased working hours.
- A five-day or six-day working week is established by the employer without the decision of the military command with the military administrations.
· Amendments to provisions related to leaves under martial law:
- It is no longer prohibited to provide more than 24 calendar days of annual paid leave during martial law period. Now, the employer has the discretion to choose whether to limit the duration of such leave to 24 calendar days for the current working year or not.
- During the martial law period, the employees who moved to other countries or regions of Ukraine, at their request, may get the unpaid leave which does not exceed 90 calendar days. The employer cannot refuse to grant such a leave, however, the time of the leave does not count towards the length of service, which gives the right to annual basic leave.
· Simplification of HR documents flow, storage and sharing during martial law period:
- The parties to the employment agreement may agree with alternative methods of creating, forwarding and storing the employer's orders, messages and other HR documents and with any other available method of electronic communication which is chosen by agreement of the employer and the employee.
- The procedure for keeping HR records, maintaining labour books and archiving relevant documents in areas of active hostilities is determined by the employer independently, provided that there are reliable records of the works performed by the employee and the labour costs are accounted.
· Setting time limitations for collecting salary unpaid at dismissal
The Law reduces to 6 months the period for which the employee can demand the collection of average salary, if the employer breached its obligation to pay on time while dismissing such an employee. Earlier, the employee could seek the payment of average salary for the whole period of delay.
· Resumption of unscheduled audits of employers by the State Labour Service during martial law period
Unscheduled audits carried out by the State Labour Service of Ukraine, which were temporarily terminated after the beginning of the war were, resumed, although in limited scope. Namely, unscheduled audits can be conducted to check the compliance with the Law of Ukraine “Arrangement of Labour Relations under Martial Law,” as well as identify whether there are unregistered employment relationships, and the employment agreements are terminated lawfully.
· Compensation of lost salary and other amounts
The Law stipulates that all the amounts lost by employees and employers due to the armed aggression against Ukraine shall be compensated by the aggressor state, as well as out of the funds received from relevant recovery funds, with international technical and financial assistance and other sources. The respective procedure is to be approved by the Cabinet of Ministers of Ukraine.