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EBA: the major changes in labour legislation 2021

22/ 10/ 2021
  Kateryna Morozova. Team Lead of the EBA Southern Ukrainian Office. Today, the labour market is at the focus of attention as it undergoes major legislative changes. Step by step, the Government and Parliament are getting rid of the “old” rules in labour relations, which are being replaced by new modern solutions. After all, for many years, the excessive amount of paper documents and reports, most of which do not have an important function, remained one of the burdens on business in terms of administrative costs. Therefore, it is important to gradually keep up with the times by digitalizing processes. For example, the business considers the existence of electronic employment books to be an interesting idea.  Finally, the year 2021 has marked the start of radical changes and improvement of labour legislation, in particular regarding electronic employment record books, the procedure for granting leave, including the parental one, relations with officials of Limited Liability Company (LLC) and Additional Liability Company (ALC), gig-contracts and gig-specialists covered with special working time conditions, electronic sick notes and replacement of paper sick notes with the Unified Register of Insurers (Register) of the Pension Fund’s web portal, etc.  In its turn, the European Business Association actively initiates such changes and monitors their implementation in practice. What exactly did the Ukrainian legislation prepare for business in 2021?     Changes in the relations of the employer with the officials of LLC and ALC were made to item 12 of Art. 39 of the Law “On Limited and Additional Liability Companies” under the Law “On Stimulating the Development of the Digital Economy in Ukraine”, which came into force on August 14, 2021.  The transition to electronic employment record books was introduced by the Law “On Amendments to Certain Legislative Acts of Ukraine Concerning the Accounting of Employee Labor Activities in Electronic Form”, which entered into force on June 10, 2021.  Gig-contracts were introduced under the Law “On Stimulating the Development of the Digital Economy in Ukraine” on August 14, 2021.  Maternity leave and paternity leave were introduced to the legislation under the Law “On Amendments to Certain Legislative Acts of Ukraine to Ensure Equal Opportunities in Childcare for Mother and Father” from May 9, 2021.  We propose to consider the key novelties of labour legislation in more detail. Electronic employment record books  . The changes were introduced by the Law of Ukraine “On Amendments to Certain Legislative Acts of Ukraine Concerning the Accounting of Employee Employment in Electronic Form”, which entered into force on June 10, 2021.   In order to facilitate a move to electronic employment records, the legislator has established a transition period of 5 years, or until June 10, 2026, precisely. The law provides two categories of persons responsible for transferring information to the Register – employers and employees (or individual entrepreneurs). Employers must upload scanned copies of the employment records of employees to the PFU Portal under the procedure established by the PFU Resolution №11-1. After employers transfer all information to the Register, employment records are returned to employees personally for signature and further deposit. Also, during the transition period, it will be possible to use both a hard copy of the employment record book and its electronic alternative with the available employment information. Liability for not transferring such kind of information has not yet been established by the legislator. However, the Cabinet of Ministers of Ukraine must ensure the development and approval of regulations arising from the Law mentioned above within three months from the date of publication.  Entering information into the Register . Information can be entered by both the employer and the employee (or individual entrepreneur) on the PFU Portal in electronic form by:   scanning copies;  creating an entry in the electronic user account of the insurer (employer) or employee, to which a scanned copies of documents will be added.  If an electronic record is created and submitted with errors, it is possible to create a new record.   Remote and home-based work  . On July 16, 2021, the Order of the Ministry of Economy dated 05.05.2021 № 913-21 came into force, which approved a standard form of employment contract for home-based work, as well as a full form of employment contract for remote work. What is new is that the standard forms provide for the possibility of concluding contracts for home and remote work in electronic form. It is only possible to supplement the provisions of the standard employment contract, not to deviate from them. Flexible working hours regime (FWHR)  . Flexible working conditions create additional employment opportunities, help to optimize the work process and the proper combination of family and work responsibilities.  In fact, flexible working hours in modern conditions have been practiced by employers for a long time, but the Labour Code of Ukraine has not yet established clear rules for its application. Finally, the Law of Ukraine of 04.02.2021 № 1213-IX made the necessary changes. What exactly does a flexible working hours regime provide?  This mode provides for:   fixed working hours;  variable working hours (the employee at his own discretion determines the periods of work within the norm);  break time for rest and meals.  FWHR is not applied at continuously operating enterprises, at the multivariate organisation of work and some other cases. In case of violation of this regime by the employee, he will face appropriate disciplinary sanctions. In addition, such an employee will be transferred to the work in general mode.  Parental leave and leave associated with childbirth. Until the current year, the unconditional right to childcare leave until the child reaches the age of three (maternity leave) was granted to the child’s mother. However, from May 9, 2021, the leave is also granted to:  the husband whose wife gave birth to a child;  the child’s father, who is not in a registered marriage with the child’s mother, provided that they live together, share a common household, have mutual rights and obligations;  grandparents or other adult relatives of the child who are actually caring for a child whose mother or father is a single mother (single father).  The procedure for granting leave associated with childbirth was approved by CMU Resolution № 693 of July 7, 2021. This is the first kind of leave for which the Cabinet of Ministers has developed a separate procedure. Thus, the duration of leave is up to 14 calendar days (excluding holidays and non-working days). The specific duration of leave is indicated by the employee in the application. The leave is paid, and it should be taken one-time. Division, extension, and transfer of this leave is not allowed. Upon dismissal, there is no reimbursement provided for this specific leave. An employee may exercise the right to leave for a period of three months from the date of childbirth. An employee who has been dismissed and re-employed within three months of the childbirth must present a certificate of non-use of such leave at the previous place of work.  What about Admission to a job after 10.06.2021?  . On June 10, 2021, the accounting of an employee’s labour activity should be carried out in electronic form and entered into the Register of labour activity on the PFU portal according to the new Labour Code rule. The law clearly stipulates that when hiring an employee for the first place of work, the employment record book is not issued if the employee does not ask for it. In this case, the employer must issue it within five days after hiring. This applies not only to employment records, but also to any other records that may be included in the employment record book (part-time work, transfer, etc.). And the responsibility for submitting employment records of employees to the Pension Fund of Ukraine, which as of 10.06.2021 are employed by the company, rests with the employer. What about dismissal after 10.06.2021?  . Under the new rules, in case of dismissal, the employment record is filled out only at the request of the employee, as information about the dismissal is transferred only to the Register (State Register of Compulsory State Social Insurance). That is, the long-standing problem with employees who evade obtaining an employment record book will be solved finally. However, this rule does not apply automatically to all employees. If during the Transitional Stage the employer has not completed the inclusion of missing information about the employment of a certain employee in the Register, then upon his dismissal the rule on the issuance of a properly executed employment record book on the day of dismissal will still apply. It should be noted here that from now on, a copy of the dismissal order must be issued to the employee upon dismissal (Article 47 of the Code). Previously, a copy of such an order had to be issued only in the case of dismissal at the initiative of the employer. From June 10, 2021, it is possible to file a lawsuit to appeal the dismissal only from the date of obtainment of the copy of the dismissal order according to the updates of Article 233 of the Code.   We can state that the balance in protecting the rights of both employer and employee is very important for business.   So, it is expected that every employer in Ukraine should update the internal policies and procedures that came into force in 2021 and inform employees about the relevant changes.  Source: The Odessa Journal
Kateryna Morozova Team Lead of the EBA Southern Ukrainian Office
Today, the labour market is at the focus of attention as it undergoes major legislative changes. Step by step, the Government and Parliament are getting rid of the “old” rules in labour relations, which are being replaced by new modern solutions.

After all, for many years, the excessive amount of paper documents and reports, most of which do not have an important function, remained one of the burdens on business in terms of administrative costs. Therefore, it is important to gradually keep up with the times by digitalizing processes. For example, the business considers the existence of electronic employment books to be an interesting idea. 

Finally, the year 2021 has marked the start of radical changes and improvement of labour legislation, in particular regarding electronic employment record books, the procedure for granting leave, including the parental one, relations with officials of Limited Liability Company (LLC) and Additional Liability Company (ALC), gig-contracts and gig-specialists covered with special working time conditions, electronic sick notes and replacement of paper sick notes with the Unified Register of Insurers (Register) of the Pension Fund’s web portal, etc. 

In its turn, the European Business Association actively initiates such changes and monitors their implementation in practice.

What exactly did the Ukrainian legislation prepare for business in 2021?    

  • Changes in the relations of the employer with the officials of LLC and ALC were made to item 12 of Art. 39 of the Law “On Limited and Additional Liability Companies” under the Law “On Stimulating the Development of the Digital Economy in Ukraine”, which came into force on August 14, 2021. 
  • The transition to electronic employment record books was introduced by the Law “On Amendments to Certain Legislative Acts of Ukraine Concerning the Accounting of Employee Labor Activities in Electronic Form”, which entered into force on June 10, 2021. 
  • Gig-contracts were introduced under the Law “On Stimulating the Development of the Digital Economy in Ukraine” on August 14, 2021. 
  • Maternity leave and paternity leave were introduced to the legislation under the Law “On Amendments to Certain Legislative Acts of Ukraine to Ensure Equal Opportunities in Childcare for Mother and Father” from May 9, 2021. 
  • We propose to consider the key novelties of labour legislation in more detail.

Electronic employment record books  

The changes were introduced by the Law of Ukraine “On Amendments to Certain Legislative Acts of Ukraine Concerning the Accounting of Employee Employment in Electronic Form”, which entered into force on June 10, 2021.  

In order to facilitate a move to electronic employment records, the legislator has established a transition period of 5 years, or until June 10, 2026, precisely. The law provides two categories of persons responsible for transferring information to the Register – employers and employees (or individual entrepreneurs). Employers must upload scanned copies of the employment records of employees to the PFU Portal under the procedure established by the PFU Resolution №11-1. After employers transfer all information to the Register, employment records are returned to employees personally for signature and further deposit. Also, during the transition period, it will be possible to use both a hard copy of the employment record book and its electronic alternative with the available employment information. Liability for not transferring such kind of information has not yet been established by the legislator. However, the Cabinet of Ministers of Ukraine must ensure the development and approval of regulations arising from the Law mentioned above within three months from the date of publication. 

Entering information into the Register 

Information can be entered by both the employer and the employee (or individual entrepreneur) on the PFU Portal in electronic form by:  

  • scanning copies; 
  • creating an entry in the electronic user account of the insurer (employer) or employee, to which a scanned copies of documents will be added. 

If an electronic record is created and submitted with errors, it is possible to create a new record.  

Remote and home-based work  

On July 16, 2021, the Order of the Ministry of Economy dated 05.05.2021 № 913-21 came into force, which approved a standard form of employment contract for home-based work, as well as a full form of employment contract for remote work. What is new is that the standard forms provide for the possibility of concluding contracts for home and remote work in electronic form. It is only possible to supplement the provisions of the standard employment contract, not to deviate from them.

Flexible working hours regime (FWHR)  

Flexible working conditions create additional employment opportunities, help to optimize the work process and the proper combination of family and work responsibilities. 

In fact, flexible working hours in modern conditions have been practiced by employers for a long time, but the Labour Code of Ukraine has not yet established clear rules for its application. Finally, the Law of Ukraine of 04.02.2021 № 1213-IX made the necessary changes. What exactly does a flexible working hours regime provide? 

This mode provides for:  

  • fixed working hours; 
  • variable working hours (the employee at his own discretion determines the periods of work within the norm); 
  • break time for rest and meals. 

FWHR is not applied at continuously operating enterprises, at the multivariate organisation of work and some other cases. In case of violation of this regime by the employee, he will face appropriate disciplinary sanctions. In addition, such an employee will be transferred to the work in general mode. 

Parental leave and leave associated with childbirth

Until the current year, the unconditional right to childcare leave until the child reaches the age of three (maternity leave) was granted to the child’s mother. However, from May 9, 2021, the leave is also granted to: 

  • the husband whose wife gave birth to a child; 
  • the child’s father, who is not in a registered marriage with the child’s mother, provided that they live together, share a common household, have mutual rights and obligations; 
  • grandparents or other adult relatives of the child who are actually caring for a child whose mother or father is a single mother (single father). 

The procedure for granting leave associated with childbirth was approved by CMU Resolution № 693 of July 7, 2021. This is the first kind of leave for which the Cabinet of Ministers has developed a separate procedure. Thus, the duration of leave is up to 14 calendar days (excluding holidays and non-working days). The specific duration of leave is indicated by the employee in the application. The leave is paid, and it should be taken one-time. Division, extension, and transfer of this leave is not allowed. Upon dismissal, there is no reimbursement provided for this specific leave. An employee may exercise the right to leave for a period of three months from the date of childbirth. An employee who has been dismissed and re-employed within three months of the childbirth must present a certificate of non-use of such leave at the previous place of work. 

What about Admission to a job after 10.06.2021?  

On June 10, 2021, the accounting of an employee’s labour activity should be carried out in electronic form and entered into the Register of labour activity on the PFU portal according to the new Labour Code rule. The law clearly stipulates that when hiring an employee for the first place of work, the employment record book is not issued if the employee does not ask for it. In this case, the employer must issue it within five days after hiring. This applies not only to employment records, but also to any other records that may be included in the employment record book (part-time work, transfer, etc.). And the responsibility for submitting employment records of employees to the Pension Fund of Ukraine, which as of 10.06.2021 are employed by the company, rests with the employer.

What about dismissal after 10.06.2021?  

Under the new rules, in case of dismissal, the employment record is filled out only at the request of the employee, as information about the dismissal is transferred only to the Register (State Register of Compulsory State Social Insurance). That is, the long-standing problem with employees who evade obtaining an employment record book will be solved finally. However, this rule does not apply automatically to all employees. If during the Transitional Stage the employer has not completed the inclusion of missing information about the employment of a certain employee in the Register, then upon his dismissal the rule on the issuance of a properly executed employment record book on the day of dismissal will still apply. It should be noted here that from now on, a copy of the dismissal order must be issued to the employee upon dismissal (Article 47 of the Code). Previously, a copy of such an order had to be issued only in the case of dismissal at the initiative of the employer. From June 10, 2021, it is possible to file a lawsuit to appeal the dismissal only from the date of obtainment of the copy of the dismissal order according to the updates of Article 233 of the Code.  

We can state that the balance in protecting the rights of both employer and employee is very important for business.  

So, it is expected that every employer in Ukraine should update the internal policies and procedures that came into force in 2021 and inform employees about the relevant changes.

Source: The Odessa Journal

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