Review of changes to labor legislation: suspension of the employment contract for the period of martial law

20/ 04/ 2022

Together with payroll and personnel administration experts BDO in Ukraine continues to review changes to labor legislation in connection with the imposition of martial law, provided by the Law of Ukraine “On the Organization of Employment Relations During Martial Law” dated 15.03.2022 No. 2136-ІХ. In previous publications, we have considered the peculiarities of personnel accounting in wartime and answered the question whether it is possible to dismiss employees in wartime. According to Art. 13 of the Law No. 2136, employment contract may be suspended in connection with military aggression against Ukraine, which rules out the possibility to provide work by the employer and to perform it by the employee. In fact, the employment relationship does not suspend. That is, the main condition for such a suspension is the absolute impossibility to provide work by the employer and to perform it by the employee. Therefore, we do not recommend using the suspension of an employment contract solely as a way of not paying the employee a salary, as such a suspension must be fully justified. We believe that the initiator of the suspension of the employment contract can be both the employer and the employee. The parties must notify each other of the suspension of the employment contract by any means available. We recommend notifying each other of the termination of the employment contract in writing or electronically using technical means of electronic communication. You may also be interested in: Taxation during martial law Afterwards, the employer shall issue an order suspending the employment contract based on the absolute impossibility of providing the employee with work (or inability to perform the work) due to military aggression against Ukraine and notifying the employee electronically in any possible way (e-mail, Viber, Telegram, etc.). It will be sufficient for the employee to send a statement to the employer. Please note that the order cannot be issued before March 24, 2022, and the employment contract cannot be suspended retroactively. It should also be noted that the period of suspension of the employment contract is not included in the length of service for the annual basic leave. In respect of the insurance job seniority, we assume that the period of suspension of the employment contract can be included in the length of service only if an aggressor country reimburses the employee due funds and a single social contribution or the Verkhovna Rada amends the law. However, this issue remains open, as no mechanism for such reimbursement has been developed yet; so, to date such a period is not included in the insurance job seniority. We advise employers to continue to keep records, accrue wages and fix the amount of the single social security tax, which would be due to the employee if the employment contract was not suspended. What about sick leave allowances? With regard to the payment of sick leave allowances in the period of suspension of the employment contract, as the employee does not receive a salary during this period, there are no grounds for the employer to appoint temporary disability benefits. We believe that an employee may resign voluntary or by agreement of the parties during such a period, because when suspending the employment contract, an employee is still in employment relationships, but temporarily ceases to work under the employment contract. The employer also has the right to dismiss the employee on its own initiative, in accordance with the grounds provided by labor legislation, but the State Labor Inspectorate does not recommend dismissing employees at the initiative of the employer during martial law (including absenteeism). If martial law is still in force, but the employer can provide the employee with work and the employee has the opportunity to start working, the employment contract may be renewed. To do so, the employee must write a statement to renew the employment contract. On the basis of such a statement, the employer issues an appropriate order to renew the employment contract and the employee resumes work on the same terms as before the suspension of the employment contract. We thank our experts for a detailed review of changes in labor legislation of Ukraine related to the imposition of martial law. Contact us for advice, if you have additional questions. Everything will be Ukraine!

Together with payroll and personnel administration experts BDO in Ukraine continues to review changes to labor legislation in connection with the imposition of martial law, provided by the Law of Ukraine “On the Organization of Employment Relations During Martial Law” dated 15.03.2022 No. 2136-ІХ. In previous publications, we have considered the peculiarities of personnel accounting in wartime and answered the question whether it is possible to dismiss employees in wartime.

According to Art. 13 of the Law No. 2136, employment contract may be suspended in connection with military aggression against Ukraine, which rules out the possibility to provide work by the employer and to perform it by the employee. In fact, the employment relationship does not suspend. That is, the main condition for such a suspension is the absolute impossibility to provide work by the employer and to perform it by the employee. Therefore, we do not recommend using the suspension of an employment contract solely as a way of not paying the employee a salary, as such a suspension must be fully justified.

We believe that the initiator of the suspension of the employment contract can be both the employer and the employee.

The parties must notify each other of the suspension of the employment contract by any means available. We recommend notifying each other of the termination of the employment contract in writing or electronically using technical means of electronic communication.

You may also be interested in: Taxation during martial law

Afterwards, the employer shall issue an order suspending the employment contract based on the absolute impossibility of providing the employee with work (or inability to perform the work) due to military aggression against Ukraine and notifying the employee electronically in any possible way (e-mail, Viber, Telegram, etc.).

It will be sufficient for the employee to send a statement to the employer.

Please note that the order cannot be issued before March 24, 2022, and the employment contract cannot be suspended “retroactively”.

It should also be noted that the period of suspension of the employment contract is not included in the length of service for the annual basic leave. In respect of the insurance job seniority, we assume that the period of suspension of the employment contract can be included in the length of service only if an aggressor country reimburses the employee due funds and a single social contribution or the Verkhovna Rada amends the law. However, this issue remains open, as no mechanism for such reimbursement has been developed yet; so, to date such a period is not included in the insurance job seniority.

We advise employers to continue to keep records, accrue wages and fix the amount of the single social security tax, which would be due to the employee if the employment contract was not suspended.

What about sick leave allowances?

With regard to the payment of sick leave allowances in the period of suspension of the employment contract, as the employee does not receive a salary during this period, there are no grounds for the employer to appoint temporary disability benefits.

We believe that an employee may resign voluntary or by agreement of the parties during such a period, because when suspending the employment contract, an employee is still in employment relationships, but temporarily ceases to work under the employment contract. The employer also has the right to dismiss the employee on its own initiative, in accordance with the grounds provided by labor legislation, but the State Labor Inspectorate does not recommend dismissing employees at the initiative of the employer during martial law (including absenteeism).

If martial law is still in force, but the employer can provide the employee with work and the employee has the opportunity to start working, the employment contract may be renewed. To do so, the employee must write a statement to renew the employment contract. On the basis of such a statement, the employer issues an appropriate order to renew the employment contract and the employee resumes work on the same terms as before the suspension of the employment contract.

We thank our experts for a detailed review of changes in labor legislation of Ukraine related to the imposition of martial law. Contact us for advice, if you have additional questions.

Everything will be Ukraine!