Optimising labour relations: what is new

On July 1, Ukrainian Parliament adopted the Law of Ukraine “On Amendments to Certain Laws of Ukraine on Optimising Labour Relations” (the “Law“). The Law was signed by the President and enters into force on the next day after its official publishing. The Law contemplates the following key changes in employee-employer relations.

Retaining of the average salary for mobilised employees

The Law abolishes the requirement for employers to retain the average salary of mobilised employees. Therefore, such employees are entitled to retain only their job and position within their employer.

E-documents

The Law allows exchanging information with employees in electronic form, including familiarising with the orders and notices of an employer, under condition of the obligatory imposition of an electronic signature or a qualified electronic signature. However, the parties may determine alternative ways to exchange information in an employment agreement.

In addition, during the period of martial law, the parties may agree on alternative ways of creating, sending, and keeping employer’s orders, notices and other employment-related documents and on any other available method of electronic communication.

New grounds to terminate an employment agreement

The Law introduces several new grounds to terminate an employment agreement, namely:

• the death of an employer-a natural person or an employee (the entry into force of a court judgement declaring such a natural person missing or dead)
• the absence of an employee from work and information about the reasons for such absence for more than four consecutive months
• the impossibility to provide an employee with the work specified in an employment agreement due to the destruction (absence) of production, organisational and technical conditions, means of production or the employer’s property as a result of military action. Under this ground, termination is allowed without the consent of a trade union and only, if it is not possible to transfer an employee to another job. At the same time, an employee is guaranteed the right to be notified ten days prior to the termination, severance pay in the amount of one salary, and rehiring if an employer hires individuals with similar qualifications within a year after termination.

Notification on worsening of remuneration conditions

During the period of martial law, employers are not obliged to observe a two months’ notice period before introduction of worsen rules on remunerating of their employees.

Obligations of an employer before starting work

The Law establishes a new list of information that an employer must provide to newly-employed staff members: work place and employer’s location, position and list of duties, working conditions, working and rest hours, duration of annual leave and amount of salary, etc.

Annual leaves

During the period of martial law:

• the basic annual leave may be limited to 24 calendar days based on an employer’s decision
• an employer may restrict an employee in taking unused annual leave days
• an employer is obliged to grant an employee an unpaid leave of not more than 90 calendar days at the request of the latter if such employee has left the territory of Ukraine or has acquired the status of an internally displaced person

The Law introduces a new rule on payment of a leave time, specifically, the payment shall be made before the start of leave, but the parties may agree to other rules in an employment or collective bargaining agreement. Previously, it was mandatory to pay for a leave time at least in three days before start of the leave.

Suspension of an employment agreement

The Law explicitly defines that the ground for suspension is the inability of both parties to perform the duties stipulated in an employment agreement due to military aggression.

In addition, the suspension should be formalized by an order, which, in particular, specifies information about the reasons for the suspension, including the inability of both parties to perform their duties, the method of exchanging information, the period of suspension, the number, categories and personal details of relevant employees, and terms of renewal of an employment agreement.

Such an employer’s order may be challenged under a simplified procedure before the State Labour Service of Ukraine. The latter, in coordination with the military administrations, may issue an order to an employer with the requirement to cancel the relevant order on suspension, which is mandatory to perform within 14 calendar days.

Labour disputes

In case of delay of salary payments upon dismissal, an employer may be obliged by a court to pay an employee the average salary for the entire time of delay in the payment until the day of the actual payment, but not more than for six months. The statute of limitation for such disputes is set at three months. The deadlines for applying to a court can be extended if missed, provided that no more than one year has passed.

Other changes

The Law also defines certain aspects of the duration of working time, notifying an employee on the amount of payments upon dismissal, relations under a fixed-term employment agreement, etc.

For further information please contact Asters’ Counsel Inesa Letych and Associate Iryna Shaposhnikova.