Ukraine: Parliament Acts to Improve Labour Relations for Small and Medium Businesses During Martial Law

Legal Alerts
16.08.2022 123
On 17 August 2022, the President signed the Law of Ukraine "On Amendments to Certain Legislative Acts of Ukraine Regarding the Simplification of Regulation of Employment Relations for Small and Medium Business and Decrease of Administrative Burden on Business" (the "Law"). The main purpose of the Law is to improve the regulation of labour relations for small and medium businesses during martial law.
 
The Law will enter into force on the day following the day of its publication. The Law will cease to have effect from the date of termination or abolition of the martial law. 
 
Importantly, small business entities are companies that meet the following criteria:
  • the average number of employees for the reporting period (calendar year) does not exceed 50 employees; and
  • annual income from any activity does not exceed the amount of EUR 10 million. 
 
For a medium-sized business, the above criteria shall not exceed 250 employees and EUR 50 million, respectively.
 
The key points of the updated regulation of labour relations under the simplified regime in the employment agreement (the "Agreement") and other terms of such a simplified regime are described below.
 
 
I. Essential terms of the Agreement and its conclusion
 
The Law provides for the essential terms of the Agreement. In particular, the Agreement shall provide for the following provisions:
  • the deadline for notification on termination of the Agreement by the employer; 
  • the procedure for exchange of information between the parties, e.g., on the termination of the Agreement or changes to its terms, notifying the employee on changes in essential working conditions in case of their deterioration;
  • conditions on the non-disclosure of trade secrets, ensuring the protection of intellectual property; and
  • the amount of compensation to an employee for a violation of the terms of wage payment deadline.
 
The Parties may agree to conclude an Agreement in the form of an electronic document using electronic signatures. 
 
 
II. Termination of the Agreement
 
Grounds for termination
 
The Parties may agree on additional grounds for employment termination in the Agreement. 
 
At the same time, in the case of a simplified regime, the employer may terminate the Agreement on any basis not provided for by labour laws. Furthermore, the Law does not require that an exhaustive list of grounds for dismissal shall be set out in the Agreement. 
 
The procedure of termination on grounds not provided for by labour laws
 
If the employer wishes to take this opportunity to dismiss an employee on grounds not set out in labour laws, he shall comply with the following conditions:
  • notify the employee on the termination of the Agreement by the deadline specified in the Agreement;
  • provide reasons for such termination; and
  • provide the employee with compensation, the amount and procedure for payment of which shall be set out in the Agreement.
 
The Agreement is terminated either bilaterally (by signing an additional agreement) or unilaterally (by sending to the employee an official notice of termination by the employer).
 
In case of a unilateral termination of the Agreement, the notification shall be sent:
  • in the manner specified in the Agreement; or
  • by recommended dispatch with a postal description of the contents.
 
In this case, the Agreement shall be considered terminated (і) from the next business day after the date of the official notice delivery or (ii) seven calendar days from the date of receipt of the postal item at the employee's address post office.
 
At the same time, the employer shall be aware of his obligation to settle with the employee on the day of dismissal or no later than the next day after the dismissed employee submits a payment request.
 
 
Other peculiarities of the simplified regime 
 
Leave
 
An annual leave may be split into parts of any duration at the request of an employee.
By default, the wages for leave period are paid before its start. Other conditions may be provided in the labour or collective agreement.
 
Overtime and night work, working on holidays, non-working days and weekends 
 
The Agreement may provide for a separate regulation on overtime and night work, working on holidays, non-working days and weekends. For instance, the Agreement may provide for the grounds and procedure for the employee's engagement and the amount of payment (but not less than that stipulated in the Labour Code).
 
The employee's engagement in overtime work under the Agreement does not require the trade union's approval.
 
Documentation maintenance

Requirements to maintain documentation on personnel matters, the adoption of local regulations and organisational and administrative documentation do not apply to the employers applying simplified regime.

Follow our updates to find out about key changes in labour legislation, the adoption and entry into force of this and other laws.
 
 
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Our experts: Yevheniy DeynekoAndriy OlenyukOlha Horodniuk, Yuliia Sharabar. 
 
How we can help: 
  • advising on compliance with labour legislation, in particular during martial law; 
  • preparation of documents on labour relations, in particular employment agreements and contracts, employer's orders and regulations, internal regulations, including by taking into account the requirements for the organisation of labour relations during martial law; 
  • termination of labour relations, in particular with top management, key employees and taking into account the peculiarities of the martial law regime; 
  • legal representation in labour disputes; 
  • optimisation of staff recruitment under employment and civil agreements; and
  • appealing against decisions of public authorities in case of violations of labour legislation.

 

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