Business welcomes changes to the reservation procedure for persons liable for military service

Last week, the Government finally adopted Resolution No. 650, which not only provided for the possibility of booking military service electronically through the Diia portal, but also resolved some other important issues for businesses.

The European Business Association has supported the initiative of the Ministry of Economy from the very beginning regarding the need to introduce an alternative mechanism for booking military service electronically, which, in our opinion, should significantly speed up the entire booking procedure.

At the same time, the EBA advocated for the preservation and significant improvement of the existing reservation procedure, because if the electronic reservation system does not work immediately without failures, enterprises that are critically important for the state’s economy could face the problem of not being able to book their key employees for the period of martial law.

Therefore, the EBA welcomes the adoption of Resolution No. 650, which currently provides for the possibility of booking its employees both electronically through the Diia portal and in the traditional way by submitting the relevant lists of military personnel to the relevant central executive authorities or the relevant military administrations.

Moreover, within the framework of Resolution No. 650, a number of other issues important for business have been regulated.

First, the deferral period will now be 1 year instead of 6 months, as it was before, which the EBA has repeatedly requested.

Secondly, according to the new procedure, military personnel can be booked regardless of their military rank and military registration specialty, which will solve the critically important issue for businesses of booking military personnel with scarce military registration specialties.

Thirdly, businesses have repeatedly pointed out that the requirement to book no more than 50% of military personnel at the time of submitting the list of employees for booking, in practice, often leads to a constant decrease in the number of employees that the company can submit for booking. Therefore, the EBA  proposed to link the 50% reservation to the date of the beginning of the full-scale invasion of Ukraine. The government, in turn, in the draft resolution proposed to link it to May 18, 2024, as the date from which it is necessary to deduct 50% of the military personnel, which, in turn,could lead to a significant reduction in the quota for booking for enterprises that are currently planning to expand their staff. Therefore, as a compromise solution, the Government supported the EBA’s proposal to provide two alternative ways to calculate 50% of the military personnel, either from May 18, 2024, or from the date of submission of the current application for booking.

Fourthly, the new booking procedure provides for the possibility of booking not only employees of critically important enterprises, but also their ultimate beneficial owners, as well as members of the supervisory boards of enterprises that are of strategic importance for the economy and security of the state.

Fifth, the document provides that the restriction on the number of liable for military service at 50%, which are subject to booking, does not apply to enterprises of the fuel and energy complex, their contractors, representatives of companies that carry out emergency recovery work on the supply of communications, as well as critically important enterprises in the field of military-industrial complex.

Nevertheless, according to the assessment of the business community, there are certain problematic provisions in the order of booking, which we are working on from the side of the EBA. For example, (1) there is currently a conflict between the new law on mobilization (which provides for the registration of a deferment by a booked employee in the TCRs and SSs of the employer) and the updated Resolution 76 (where the TCRs and SSs of the employee, and not the employer, should do this), which in practice often leads to a situation where the TCRs and SSs refuse to issue a deferment/put the employee on a special register. From the EBA’s side, we propose to resolve this situation and establish the process of putting on a special register by ensuring the interaction of the relevant TCRs and SSs at the place of registration of employees and the TCRs and SSs in whose territory the enterprise is located. In the same context, (2) businesses also draw attention to the lack of any responsibility for failure to meet the deadlines for placing on a special account by the TCRs and SSs. Another unresolved issue is (3) the lack of an effective mechanism for booking employees of foreign representative offices, which is a significant problem for many companies.

Therefore, the business community of the EBA is currently preparing official proposals and comments with the hope of their consideration.

At the same time, the EBA sincerely welcomes the adoption of Resolution No. 650 and hopes that the Ministry of Digital Transformation and other responsible state bodies will be able to launch a new booking mechanism on the Diia platform within a month. We hope this will help make the booking process transparent and understandable. In addition,we expect a dialogue on other issues related to the work of businesses, in particular, the consideration of the issue of economic booking.