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Labour Disputes — What’s New?

04/ 09/ 2019
  During the first six months of 2019, the Supreme Court expressed numerous legal opinions in labour disputes. The case law is of special significance given the obsolete labour laws (as a reminder, the effective Labour Code of Ukraine was adopted in 1972). The court decisions fill the legislative gaps and regulate labour relations with account of the present-day circumstances. Let’s consider the most interesting and relevant legal opinions of the Supreme Court (hereinafter also referred to as the SC) in this category of cases.   Dismissal for absence without leave is illegal if the employee has not been notified of his workplace location (resolution of the Supreme Court dated 08.05.2019 in case No. 489/1609/17) The claimant working as a sales manager was dismissed at the employer’s initiative for absence without leave based on Clause 4 of Article 40 of the Labour Code of Ukraine. The Supreme Court upheld the conclusions of the lower courts as regards reinstatement of the employment. The Supreme Court stated that the employer acted in breach of Article 29 of the Labour Code of Ukraine and failed to notify the employee of his workplace location, so the employee had not violated the workplace discipline rules and was not guilty of his absence from the workplace. Outcome of the case: the reinstatement of the employment of the claimant, collection of the average income and non-pecuniary damages from the employer. Recommendations to the employer: the employee’s workplace must be clearly stated in the employment order or employment contract (if executed with the employee), or the way to determine the workplace location must be provided for.   When an employee discharges duties for the vacant office, payment is made based on this office (resolution of the Supreme Court dated 30.01.2019 in case No. 755/19954/15-ц) An employee held the office of the deputy director general, but had been discharging the duties of the director general for almost six months. In that regard, the employee filed a claim to the court for collecting the underpaid salary for discharging the duties of the director general. The Supreme Court upheld the previous court decisions satisfying the claim and stated that, according to effective Explanation by the State Labour and Salary Committee of the Council of Ministers of the USSR No. 30/39 dated 29.12.1965, in case an employee was appointed to discharge duties for the vacant office, payment was made based on that office. Outcome of the case: collection of the underpaid salary and compensations in the amount exceeding one million Ukrainian hryvnias from the employer for the employee’s benefit. Recommendations to the employer: in case an employee is appointed to discharge duties for the vacant office, remuneration for his labour must be paid based on this office and the fixed salary set out in the staff schedule.   The minimum wage does not have to be paid if the employee fails to comply with the work quotas (resolution of the Supreme Court dated 11.02.2019 in case No. 736/675/17) A former employee of the agricultural company filed a claim to court for collecting the salary that, in her opinion, had been paid in the amount less than the legal level of the minimum wage. The Supreme Court upheld the conclusions reached by the lower courts as regards the lack of grounds for satisfying the claim since the claimant had failed to prove that she had fully complied with the monthly or hourly work quota. The Supreme Court explained that labour remuneration at the level not lower that the minimum wage was not an unconditional guarantee and was paid provided that the employee complied with the work quota. Outcome of the case: the employee’s claim for collecting the difference between the minimum wage and the actual paid wage from the employer was dismissed. Recommendations to the employer: the minimum wage is paid for the monthly (hourly) work quota complied with by the employee. If the employee has failed to comply with the established work quota, the salary may be less than the minimum wage.   The employee’s transfer to another office without her consent is illegal (resolution of the Supreme Court dated 24.04.2019 in case No. 501/82/18) The employer notified the employee that her office of the deputy head was going to be made redundant due to the staff redundancy, and, despite no consent given by the employee, transferred the employee to the senior specialist’s office with its order. The Supreme Court agreed with the first-instance court’s decision on satisfying the claim and stated that the claimant’s transfer to the other office without her consent had been illegal. It was also noted by the Supreme Court that the employee had not been offered all the vacant offices, and the employer had failed to analyse the claimant’s performance and qualifications in comparison with the other employees offered those offices. Outcome of the case: invalidation and revocation of the transfer order, and reinstatement of the employment. Recommendations to the employer: to comply with Article 32 of the Labour Code of Ukraine, according to which an employee may be transferred to another job within the same enterprise, institution or organisation by his or her consent only.   The court shall check whether the employer complies with the rules for imposing disciplinary penalties (resolution of the Supreme Court dated 16.01.2019 in case No. 499/78/17-ц) The employee had received two reprimands and was dismissed due to the regular failure to discharge his duties based on Clause 3 of Article 40 of the Labour Code of Ukraine. The first-instance court and the court of appeal had dismissed the employee’s claim for reinstatement of the employment, but the Supreme Court submitted the case to the first-instance court for new consideration. The Supreme Court explained that when considering the cases as to the reinstatement of employment of the employees dismissed due to failure to discharge their duties without a good reason, the courts must find out what exactly the violation had been, what had caused the dismissal, whether it could be a basis for termination of the employment contract, and whether the employer had complied with the legal rules and procedure for imposing disciplinary penalties. Outcome of the case: reinstatement of the employment and collection of the average salary from the employer for the period of the forced absence. Recommendations to the employer: the rules for imposing disciplinary penalties prescribed by the Labour Code of Ukraine must be complied with when disciplinary penalties are imposed (regardless of whether they will be a basis for the employee’s dismissal in the future).   Employees must be held liable for offending their colleagues (resolution of the Supreme Court dated 20.05.2019 in case No. 591/7099/16-ц) In presence of the other staff, a colleague asked one of the employees, “Are you stupid?” The employee filed a claim for refuting the negative information and collecting three thousand Ukrainian hryvnias as non-pecuniary damages. The Supreme Court agreed with the court of appeal’s decision to compensate for the non-pecuniary damages in the amount of three hundred Ukrainian hryvnias. The Supreme Court stated that the value judgements were not to be refuted and proven. However, if a subjective opinion is expressed in a brutal, humiliating or indecent form assaulting dignity, honour or business reputation, the person who has expressed such opinion or judgement may be obliged to compensate for the non-pecuniary damages. Outcome of the case: the claim was satisfied partly, and three hundred Ukrainian hryvnias were collected from the employee offending the claimant as non-pecuniary damages. Recommendations to the employer: where possible, labour conflicts must be resolved by the employer. The corresponding clauses may be incorporated into the collective bargain agreement, internal policies and guidelines.   Outstaffing, freelance and ban on employment with competitors are the concepts that are not regulated by the labour laws of Ukraine. While the country has been waiting for the new Labour Code to fill the above gaps for more than four years, the case law of the Supreme Court plays a key role in development of the adequate algorithm for the employer’s actions in complicated situations in labour relations.

During the first six months of 2019, the Supreme Court expressed numerous legal opinions in labour disputes. The case law is of special significance given the obsolete labour laws (as a reminder, the effective Labour Code of Ukraine was adopted in 1972). The court decisions fill the legislative gaps and regulate labour relations with account of the present-day circumstances.

Let’s consider the most interesting and relevant legal opinions of the Supreme Court (hereinafter also referred to as the SC) in this category of cases.

 

Dismissal for absence without leave is illegal if the employee has not been notified of his workplace location (resolution of the Supreme Court dated 08.05.2019 in case No. 489/1609/17)

The claimant working as a sales manager was dismissed at the employer’s initiative for absence without leave based on Clause 4 of Article 40 of the Labour Code of Ukraine.

The Supreme Court upheld the conclusions of the lower courts as regards reinstatement of the employment. The Supreme Court stated that the employer acted in breach of Article 29 of the Labour Code of Ukraine and failed to notify the employee of his workplace location, so the employee had not violated the workplace discipline rules and was not guilty of his absence from the workplace.

Outcome of the case: the reinstatement of the employment of the claimant, collection of the average income and non-pecuniary damages from the employer.

Recommendations to the employer: the employee’s workplace must be clearly stated in the employment order or employment contract (if executed with the employee), or the way to determine the workplace location must be provided for.

 

When an employee discharges duties for the vacant office, payment is made based on this office (resolution of the Supreme Court dated 30.01.2019 in case No. 755/19954/15-ц)

An employee held the office of the deputy director general, but had been discharging the duties of the director general for almost six months. In that regard, the employee filed a claim to the court for collecting the underpaid salary for discharging the duties of the director general.

The Supreme Court upheld the previous court decisions satisfying the claim and stated that, according to effective Explanation by the State Labour and Salary Committee of the Council of Ministers of the USSR No. 30/39 dated 29.12.1965, in case an employee was appointed to discharge duties for the vacant office, payment was made based on that office.

Outcome of the case: collection of the underpaid salary and compensations in the amount exceeding one million Ukrainian hryvnias from the employer for the employee’s benefit.

Recommendations to the employer: in case an employee is appointed to discharge duties for the vacant office, remuneration for his labour must be paid based on this office and the fixed salary set out in the staff schedule.

 

The minimum wage does not have to be paid if the employee fails to comply with the work quotas (resolution of the Supreme Court dated 11.02.2019 in case No. 736/675/17)

A former employee of the agricultural company filed a claim to court for collecting the salary that, in her opinion, had been paid in the amount less than the legal level of the minimum wage.

The Supreme Court upheld the conclusions reached by the lower courts as regards the lack of grounds for satisfying the claim since the claimant had failed to prove that she had fully complied with the monthly or hourly work quota.

The Supreme Court explained that labour remuneration at the level not lower that the minimum wage was not an unconditional guarantee and was paid provided that the employee complied with the work quota.

Outcome of the case: the employee’s claim for collecting the difference between the minimum wage and the actual paid wage from the employer was dismissed.

Recommendations to the employer: the minimum wage is paid for the monthly (hourly) work quota complied with by the employee. If the employee has failed to comply with the established work quota, the salary may be less than the minimum wage.

 

The employee’s transfer to another office without her consent is illegal (resolution of the Supreme Court dated 24.04.2019 in case No. 501/82/18)

The employer notified the employee that her office of the deputy head was going to be made redundant due to the staff redundancy, and, despite no consent given by the employee, transferred the employee to the senior specialist’s office with its order.

The Supreme Court agreed with the first-instance court’s decision on satisfying the claim and stated that the claimant’s transfer to the other office without her consent had been illegal. It was also noted by the Supreme Court that the employee had not been offered all the vacant offices, and the employer had failed to analyse the claimant’s performance and qualifications in comparison with the other employees offered those offices.

Outcome of the case: invalidation and revocation of the transfer order, and reinstatement of the employment.

Recommendations to the employer: to comply with Article 32 of the Labour Code of Ukraine, according to which an employee may be transferred to another job within the same enterprise, institution or organisation by his or her consent only.

 

The court shall check whether the employer complies with the rules for imposing disciplinary penalties (resolution of the Supreme Court dated 16.01.2019 in case No. 499/78/17-ц)

The employee had received two reprimands and was dismissed due to the regular failure to discharge his duties based on Clause 3 of Article 40 of the Labour Code of Ukraine.

The first-instance court and the court of appeal had dismissed the employee’s claim for reinstatement of the employment, but the Supreme Court submitted the case to the first-instance court for new consideration.

The Supreme Court explained that when considering the cases as to the reinstatement of employment of the employees dismissed due to failure to discharge their duties without a good reason, the courts must find out what exactly the violation had been, what had caused the dismissal, whether it could be a basis for termination of the employment contract, and whether the employer had complied with the legal rules and procedure for imposing disciplinary penalties.

Outcome of the case: reinstatement of the employment and collection of the average salary from the employer for the period of the forced absence.

Recommendations to the employer: the rules for imposing disciplinary penalties prescribed by the Labour Code of Ukraine must be complied with when disciplinary penalties are imposed (regardless of whether they will be a basis for the employee’s dismissal in the future).

 

Employees must be held liable for offending their colleagues (resolution of the Supreme Court dated 20.05.2019 in case No. 591/7099/16-ц)

In presence of the other staff, a colleague asked one of the employees, “Are you stupid?”

The employee filed a claim for refuting the negative information and collecting three thousand Ukrainian hryvnias as non-pecuniary damages.

The Supreme Court agreed with the court of appeal’s decision to compensate for the non-pecuniary damages in the amount of three hundred Ukrainian hryvnias. The Supreme Court stated that the value judgements were not to be refuted and proven. However, if a subjective opinion is expressed in a brutal, humiliating or indecent form assaulting dignity, honour or business reputation, the person who has expressed such opinion or judgement may be obliged to compensate for the non-pecuniary damages.

Outcome of the case: the claim was satisfied partly, and three hundred Ukrainian hryvnias were collected from the employee offending the claimant as non-pecuniary damages.

Recommendations to the employer: where possible, labour conflicts must be resolved by the employer. The corresponding clauses may be incorporated into the collective bargain agreement, internal policies and guidelines.

 

Outstaffing, freelance and ban on employment with competitors are the concepts that are not regulated by the labour laws of Ukraine. While the country has been waiting for the new Labour Code to fill the above gaps for more than four years, the case law of the Supreme Court plays a key role in development of the adequate algorithm for the employer’s actions in complicated situations in labour relations.

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