During the last 12 months, the following significant changes in the labour legislation of Ukraine were enacted.
Currently, there are several other legislative initiatives that have been recently adopted or are pending at the Ukrainian parliament (Verkhovna Rada of Ukraine) regarding the further de-bureaucratisation and digitalisation of labour legislation, such as gig contracts for Diya-City residents (Law No 1667-IX was adopted on 15 July 2021 and it came into effect on 14 August 20021), zero-hours contracts, etc.
It is worth mentioning that the labour legislation of Ukraine is gradually changing in response to modern challenges and requests of the employers and employees. Also, a necessity to respond to COVID-19-related challenges became one of the drivers for a more rapid upgrade of certain labour law matters (eg, remote and home-based work, digitalisation, etc).
During the COVID-19 pandemic, additional simplified rules for partial unemployment benefits for employees working reduced hours (as a result of the pandemic) were introduced in Ukraine. The benefits are paid to employees at the rate of two-thirds of the salary set for an employee of the relevant category (capped by the amount of one legislatively established minimum wage).
Individual entrepreneurs are eligible to such benefits at the rate of two-thirds of the base for calculating a single contribution for compulsory state social insurance (or two-thirds of one legislatively established minimum wage for those who are exempt from paying a single contribution).
Remote and Home-Based Work
Initially, remote work was introduced in March 2020. It allowed the employers to instruct the employees to work remotely from home for the period of quarantine (the quarantine is formally in place until 1 October 2021, although this is expected to be extended).
The Law of Ukraine No 540-IX dated 30 March 2020 introduced remote work and home-based work regimes for an indefinite period, ie, they may be applied by parties to a labour relationship regardless of the pandemic. Currently, these regulations are effective in the wording of Law No 1213-IX dated 4 February 2021 detailing the use of such work arrangements based on model written agreements on remote or home-based work. However, during the pandemic, the transfer of employees to remote/home-based work without concluding a written agreement is allowed by the employer's order.
Simplified Unemployment Regulations
During the COVID-19 pandemic, Ukrainian legislation was amended to simplify the rules for:
During the established COVID-19 quarantine, a person may apply for unemployment status and benefits via electronic means.
During the COVID-19 pandemic, the Ukrainian parliament adopted several laws on the provision of a one-time payment of UAH8,000 to employees and individual entrepreneurs/self-employed insured persons who had lost their earnings due to COVID-19 quarantine restrictions and additional lockdown restrictions under certain conditions (in December 2020 and in March 2021).
Eligible for the payment were those who had no other employment and whose employer had paid unified social contributions for the previous periods and operated in the areas of economic activity included in the list approved by the government (eg, restaurants, small shops, etc).
Self-Isolation Sick Leave
During the COVID-19 pandemic, Ukrainian legislation was amended to provide for self-isolation sick leave with the payment of 50% of the average daily earnings regardless of the employees' seniority; this rose to 100% for medical workers who are required to isolate upon a doctor's instruction and under medical observation.
Pursuant to Law No 530-IX (effective as of 17 March 2020), the employee may take unpaid leave for the whole period of the quarantine, and such leave will not be included in the total number of days of unpaid leave allowed for the employee per year (ie, 15 calendar days per year).
Differences in the Status of White-Collar and Blue-Collar Workers in Ukraine
Unlike other jurisdictions, the legislation of Ukraine does not provide for different regulations or sets of guarantees for blue-collar and white-collar workers. All employees in Ukraine enjoy the same set of rights provided for by labour laws.
The only minor difference lies in different approaches to categorising the names of job titles and professions by the State Profession's Classifier and different procedures for approving the job descriptions for such professions – job descriptions for blue-collar workers (work instructions) must be additionally approved by the employer’s primary trade union organisation or representative body of the labour collective.
Status of Corporate Officials
The labour and corporate legislation of Ukraine provides for specific rules for appointing, suspending and terminating the powers of officials of companies in Ukraine, for example:
Though corporate and labour appointment/suspension/termination may not coincide in time (because of the double nature of relations with such persons), such employees enjoy all labour rights and guarantees provided for by the labour legislation of Ukraine.
Specific Regulation for Certain Employee Categories
There are special regulations for civil servants: judges, police officers, firefighters, customs officers, state servants, etc.
Employment Agreements in Ukraine
The absence of any written employment agreement is common practice in Ukraine, as employment relations are usually formalised via employment orders. However, the written form of such agreement is mandatory in certain cases (eg, with foreign nationals, minors, in case of employment contracts, agreements for remote/home-based work).
Types of Employment Agreements
There are various types of employment agreements in Ukraine depending on certain criteria, for example:
Currently, there are a few legislative initiatives that have been recently adopted or are pending on the introduction of gig contracts (for Diya-City technological park's residents – Law No 1667-IX was adopted on 15 July 2021 and came into effect on 14 August 20021), zero-hours agreements, and agreements with domestic workers.
Terms of Employment Agreements
Currently, the legislation does not provide an explicit list of mandatory terms for an employment agreement. However, the following information is required to be included in practice:
A regular working week in Ukraine is 40 hours (eight hours/day). Specific working hours arrangements are as follows.
Overtime work is generally not allowed and may take place only under exceptional circumstances envisaged by the laws (eg, in case of an emergency/accident, for liquidation of its consequences, necessity to maintain continuous production, etc). Overtime work cannot exceed four hours on two consecutive days or 120 hours a year and is compensated at double rates.
Work on Days Off
Work on weekends, days off, public and religious holidays is allowed only in exceptional cases and is compensated at double rates or by an additional day off in lieu.
The gross monthly salary for a full-time employee cannot be lower than the legislatively established minimum wage (reviewed on an annual basis and approved by the Law on the State Budget of Ukraine for the respective year). Currently, the gross monthly minimum wage amounts to approximately EUR180.00 (UAH6,000.00).
The salary of an employee is subject to mandatory indexation (an insignificant monthly increase if the inflation rate reaches a certain point), pursuant to a separate accounting procedure.
Employees are entitled to other types of compensations pursuant to legislation, employment agreements/labour contracts and/or collective bargaining agreements. Bonuses and certain other incentives are usually paid depending on provisions of collective bargaining and individual employment agreements as well as internal incentive schemes.
Foreign Employees' Salaries
Employment of foreign employees in Ukraine is possible subject to work permits previously obtained for them by the employers (with certain exceptions), provided that such employees are paid a gross monthly salary in the amount of at least ten (in certain cases five – eg, for employees of NGOs, charitable funds, etc) minimum wages. This requirement does not apply to the special category of foreign employees, eg, IT-specialists, art workers, ultimate beneficiary owners/participants of a Ukrainian entity employing them, graduates of top-100 best world universities (according to ARWU, QS World University Rankings or Times Higher Education World University Rankings), and some others.
Government and State Intervention
Though the government/state does not intervene, except for setting minimum wages and general incentive schemes for public servants and some other spheres, additional temporary measures can be introduced from time to time. By way of example, the government of Ukraine took temporary measures in response to the COVID-19 crisis to limit the salaries of officials of state companies (members of executive and supervisory boards) to ten minimum wages starting from April 2020 till the month in which the COVID-19 quarantine ends. However, that measure was cancelled as of October 2020.
The duration of the statutory paid basic annual vacation is 24 calendar days (for certain categories of employees, such as teachers, persons with disabilities, minors etc, longer vacations are established).
Additional annual vacations are provided based on the laws of Ukraine, employment agreements and/or collective bargaining agreements and include, among others, the following vacations:
Other types of additional vacations include:
The total number of days of annual vacations (both basic and additional) cannot exceed 59 calendar days. In addition, an employee may use one-time vacations, provided that there is a specific ground.
Sick Leave Compensation
The minimum sick leave payment for employees and other insured persons varies depending on the periods of social insurance paid for an employee by the employer or by an employee him/herself (eg, self-employed or individual entrepreneur):
During the COVID-19 pandemic, Ukrainian legislation was amended to allow sick leave to be granted with the payment of 50% of the average daily earnings, regardless of the seniority (100% for medical workers) to employees who are required to isolate upon a doctor's instruction and under medical observation.
Unlike the legislation of some other countries, the laws of Ukraine do not provide for garden leave. However, the most proximate form of structuring relations in respective cases is temporary removal (suspension) of an employee from his/her job duties – allowed only in cases envisaged by the law (eg, in case of criminal suspension by the respective ruling of the criminal court, corporate suspension of a member of the executive body, suspension of an employee who refused to pass medical examination if obligatory, etc).
The labour legislation of Ukraine does not explicitly provide for an employee's duty to respect the confidentiality of the employer’s commercial and business information, neither is there any related dismissal ground envisaged in the Labour Code of Ukraine. However, there are specific regulations introduced in 2018 by corporate laws for LLC's corporate officials, prohibiting them to disclose information that constitutes trade secret or is confidential. In case of breach, an official may be dismissed immediately without any compensation. This prohibition also applies for the period of one year after the termination of an employment agreement/contract, whereas another (longer) period may be specified in the agreement/contract.
Usually, employers include relevant provisions into employment agreements/labour contracts, job descriptions, internal regulations or conclude a separate non-disclosure agreement with employees to protect secret and confidential information.
The laws of Ukraine neither allow nor forbid including non-disparagement clauses into employment agreements, though such clauses are often included into termination agreements. However, enforceability is questionable due to difficulties in gathering respective evidence and the lack of relevant court practice.
Employee's Disciplinary Liability
Employees in Ukraine are subject to disciplinary liability in case of misconduct only in the following alternative forms:
Other disciplinary penalties under legislation, disciplinary statutes and regulations may be applied to employees of specific areas of activity or economy eg, in the military services, civil service, etc.
The rules for applying disciplinary penalty are as follows:
The employee may appeal the applied penalty in court.
Employee's Material Liability
The employer has the right to apply material liability measures to an employee who caused damage to the employer in the amount of the direct damage caused, however, not more than the employee’s average monthly salary.
In certain cases (as per the exclusive list established by the Labour Code of Ukraine), the full material liability may be applied, for example:
The material liability may be applied to an employee pursuant to an internal order or court decision on deductions from the employee’s salary. Such deductions may be done within the limits of the amounts deductible from one monthly salary of an employee (the maximum is 50% of the monthly salary).
The employee may appeal the applied material liability measures in court.
Non-compete clauses in Ukraine are not generally allowed as they may be recognised as contradictory to Articles 42-43 of the Constitution of Ukraine envisaging freedom of entrepreneurship and freedom to freely choose the employment.
Non-compete during Employment
The only exception pursuant to the Labour Code of Ukraine is the prohibition of secondary employment during an employee’s work for the employer that may be established by an employment agreement/labour contract or collective bargaining agreement.
Though many employers tend to include post-employment non-compete clauses into agreements with employees, such provisions may be recognised as void and unenforceable. Though some recent decisions of trial courts depart from that point of view, upholding employers' arguments, these decisions may not be relied on and will probably be revised by the courts of higher instance.
Non-solicitation clauses in Ukraine are not generally allowed and may be recognised as void and unenforceable (please see 3.1 Non-competition Clauses).
The collection, processing, and protection of personal data within the frames of employment relations in Ukraine must be based on the following principles.
Basis for Data Collecting and Processing
The legal basis for data collecting and processing is as follows.
Transmission of Data Abroad or to Third Parties
If personal data are to be transmitted abroad or to any third parties, the employer is obliged to notify the respective employees thereof.
In case of processing sensitive personal data, the employer is obliged to notify the Ukrainian data protection authority thereof, except when such processing is necessary pursuant to the rights and obligations of the employer as controller of personal data under the law.
Other Data Protection Rules
Personal data shall be promptly deleted as soon as the purpose of their collection and processing ceases to exist.
The illegal collection and/or processing of personal data leads to administrative liability under Ukrainian law.
Employment of foreigners in Ukraine is allowed only based on a work permit obtained by the employer for a specific person and his/her job title before the foreign employee commences his/her work. Further, foreign directors (members of the management board) are also considered to be in employment relations and require work permits.
Nevertheless, there are exemptions for certain categories of foreign employees. Thus, foreigners who have a permanent residence permit for Ukraine or foreign citizens of Ukrainian origin with a special "foreign Ukrainian" status do not need work permits to work in Ukraine.
While applying for a work permit, the employer submits, inter alia, a draft employment agreement to be concluded with a foreign employee and a statement guaranteeing that the work to be performed by the foreign employee is not related and does not require access to the information marked as a state secret.
Foreign employees cannot be employed in positions that are related to the Ukrainian citizenship status and/or require access to state secrets.
The use of foreign workforce is possible only subject to the obtention of a work permit.
The procedure for obtaining a work permit for a foreign employee envisages the payment of a gross monthly salary of not less than ten minimal salaries (five minimal salaries in some cases), except for special categories of foreign employees – IT specialists, graduates of a university included in the list of world's top 100 universities, participants/founders/beneficiaries of a Ukrainian legal entity, highly paid professionals, etc.
A work permit is normally issued for one year and is subject to renewal for the same period of time. It may also be issued for a longer period for special categories of foreign employees (IT specialists, art workers, ultimate beneficiary owners/participants of the Ukrainian entity-employer of such employee, graduates of one of the world's top 100 universities, highly paid foreign professionals, etc) of up to three years.
Work permits are obtained at local employment centres within seven business days after the first-time application or within three working days in case of prolongation.
After a work permit is issued, the employer has the right to conclude an employment agreement/contract with the foreign national within 90 calendar days and shall notify the employment centre within ten calendar days thereof. No further registration requirements for the employers with regards to foreign employees are applicable in Ukraine.
Foreign employees continuously staying in Ukraine (for more than 90 calendar days per 180-day period – for residents of visa-free states) are obliged to obtain a temporary residence permit based on the work permit obtained by the employer and a long-term Visa D-04 (employment visa, issued for 90 calendar days for the purposes of obtaining a further temporary residence permit).
An application for a temporary residence permit shall be filed by the employee personally not later than 15 working days before the expiration date of his/her legal residence in Ukraine (eg, Visa D-04 validity). The processing of the application takes up to 15 working days.
A foreign national is obliged to register his/her place of residence in Ukraine within 30 calendar days of arrival in Ukraine and his or her receipt of a temporary residence permit (eg, an apartment lease agreement).
The Ukrainian legislation stipulates that all Ukrainian citizens united by mutual interests by the nature of their professional (labour) activity (study) have the right to ensemble and to establish trade unions (primary, local, district, regional, republican, or all-Ukrainian trade unions). Foreign citizens and stateless persons are entitled to join trade unions if this is permitted by the charter of the relevant trade union.
Powers of Trade Unions
Trade unions represent and protect labour, social and economic rights and interests of their members. The elective (management) body of a primary trade union has the right:
If a collective bargaining agreement is concluded, it may contain additional guarantees for the employees that are members of trade unions, as well as additional obligations on the employer in respect of trade unions and their members as compared to the statutory rules.
Unlike in other jurisdictions, there are no work councils in Ukraine (at least in the meaning and with authorities familiar to other countries). Still the interests of the labour collective are represented by the trade union or, if there is none, by the representative of the labour collective elected at the general meeting (conference) of the labour collective.
The meeting of the labour collective is deemed duly constituted if more than 50% of the employees are present and the decisions are made by the majority of votes. The conference of the labour collective is deemed duly constituted if at least two-thirds of the of the employees' delegates are present and the decisions are made by the majority of votes. The meeting of the labour collective/conference of the labour collective may establish a permanent body to represent the labour collective's interests between the meetings/conferences of the labour collective – labour collective council.
In case there is no trade union, the representative body of the labour collective:
Additionally, the labour collective body adopts the internal labour regulations based on the employer's draft and has some other powers.
However, its authority is restricted compared to the authority of trade unions. If only trade unions are specifically vested with certain powers by the law (eg, to give consent to employees' dismissals in certain cases), in the absence of established trade unions in the company, employers are entitled to decide on these issues themselves.
A collective bargaining agreement is an agreement concluded between the employer and the representative body of the labour collective or the trade union(s) (if any) to protect the social, economic, and labour interests of the labour collective.
A collective bargaining agreement is concluded under a separate bargaining procedure established by the law upon the initiative of one of its parties. In case of any disagreement between its parties they may resolve such a dispute at the labour arbitration body or the National Mediation and Conciliation Service under specific procedures.
A collective bargaining agreement may contain the provisions on:
A collective bargaining agreement may also contain broader guarantees for employees as compared to the legislative rules (eg, higher severance pay or longer vacations).
General Information on Termination of Employment
There is no "at-will" employment in Ukraine, unlike in some other jurisdictions.
The only exception is dismissal of corporate officials (ie, members of management and supervisory boards) due to termination of their corporate powers (with a severance pay in the amount of at least six average monthly salaries).
An exhaustive list of grounds for dismissal is set out directly in the Labour Code of Ukraine. Each termination ground has its specific procedure and notice period (if applicable) and requires that certain conditions be in place.
Grounds for Termination of Employment
The grounds for termination of employment are as follows:
Additional grounds for termination of employment under special regulations are established for civil servants: judges, police officers, firefighters, customs officers, state servants (eg, due to negative performance results of a civil servant), etc.
In case of redundancy (including collective redundancy) the employer is obliged to:
There are also other requirements/limitations applicable to the redundancy procedure, such as:
A notice period is not a prerequisite for all types of termination of employment in Ukraine. However, the legislation provides for different rules and terms for cases when a notice period is applicable/required.
Termination at the employee's initiative
Termination at the employer's initiative
The legislation of Ukraine does not allow severance pay/compensation "in lieu" of notice period where such notice periods are applicable.
Severance is to be paid only in cases and in amounts not less than those envisaged in the Labour Code of Ukraine and/or other laws aimed at protecting special categories of employees (eg, military veterans, Chornobyl catastrophe victims).
The statutory amount of severance varies from one to six average monthly salaries of an employee (depending on the grounds for dismissal). The exact amount is calculated based on the payments received by an employee in the two months prior to the dismissal date.
Collective bargaining agreements and/or employment agreements may envisage a higher amount of severance than the statutory rate. .
Dismissals for (serious) cause in Ukraine are mostly recognised as disciplinary dismissals – behaviour-related employer-initiated dismissals. Pursuant to the Labour Code of Ukraine there are the following types of disciplinary dismissals:
Disciplinary dismissals require following the strict procedure established by the Labour Code of Ukraine for this type of dismissals:
Also, there are certain other types of "for cause" dismissals, though they are not formally recognised as disciplinary ones:
There are also some special types of dismissals (without any compensation) applicable to LLC's members of the executive board, supervisory board and other officials envisaged by the company charter (pursuant to provisions of the Law on LLCs):
The parties to an employment agreement have the right to terminate their relations at any time pursuant to their mutual agreement. No severance is required in this case, unless negotiated by the parties.
The legislation does not specifically provide for any definite terms of such type of agreements. However, the following terms are included in practice:
Releases or waiver clauses are not enforceable under Ukrainian legislation, though still often included in termination agreements.
The legislation of Ukraine does not provide for any specific limitations on termination agreement terms. The only specific exception is that the termination (including, the terms of the termination agreement) of relations with a member of the elective body of the trade union is to be agreed with the elective body of the trade union and higher trade union organisation.
The Ukrainian labour legislation provides special protection against employer-initiated dismissals (except for redundancy in case of liquidation) for the following categories:
Additional guarantees for certain other categories of employees in case of dismissal include:
Also, additional guarantees in case of dismissal (eg, higher severance) may be established in employment agreements and/or collective bargaining agreements.
In case of an allegedly wrongful dismissal, an employee may challenge it in court within one month of receipt of a copy of the dismissal order.
Claims of a former employee may include a reinstatement claim, a demand regarding the payment of average daily earnings for forced truancy until the date of reinstatement as well as moral damages and court expenses (including legal support).
The Labour Code prohibits discrimination based on race, colour, ethnic and social origin, religious, political and other beliefs, gender identity, sexual orientation, age, property status, place of residence, suspected or actual HIV/AIDS diagnosis, membership of a trade union, participation in a strike, addressing or intending to go to court or other bodies to protect his or her rights or to support other employees in protecting their rights, reporting of possible corruption or corruption-related offenses, or other discrimination criteria.
Employers are obliged to take measures to prevent and protect employees against sexual harassment and other gender-based violence, create equal work conditions and implement equal pay for women and men with the same qualifications and working conditions pursuant to other anti-discriminatory laws of Ukraine.
Employers are prohibited from specifying gender and age in a vacancy advertisement, except for certain types of work which must be performed by a person of a specific gender.
There are neither specific rules/procedures for discrimination claims at the legislative level nor separate courts or state bodies for handling discrimination cases. Still, court disputes arising from employees’ claims of harassment or discrimination in the workplace are not common in Ukraine.
Burden of Proof
In discrimination claims, the plaintiff (ie, the employee) is obliged to provide factual evidence that discrimination has taken place. If such evidence is available, the burden of proof regarding non-discrimination lies on the defendant.
An employee may claim for ensuring his/her equal rights as an employee, elimination of the discrimination, as well as moral compensation (non-pecuniary damages).
Local Level Regulations
Employers may establish specific rules for handling discrimination claims at the local level in the internal labour regulations or anti-discriminatory policies. Among the employers that have implemented such a system are numerous Ukrainian offices of international groups of companies. They usually have a separate compliance system that includes schemes for reacting to such allegations/violations (eg, whistleblowing hotline, internal investigation procedures) as a pre-court stage for processing discrimination claims internally. Any measure for consideration of such cases internally cannot preclude an employee from making a claim in court (via the general court procedure).
Individual employment-related disputes in Ukraine are subject to consideration by the following courts.
There are no specialised employment forums in Ukraine.
Decisions of trial courts may be appealed in regional courts of appeal and afterwards in the court of cassation (Supreme Court).
Representation in Court
Representation in court is carried out exclusively by attorneys-at-law (professional legal aid), except in cases established by law (eg, legal guardians, self-representation, including of the employers by their in-house lawyers).
As a general rule, an employee/former employee may present a claim before the general court within three months of the violation of his/her labour rights (after such violation became known to him/her).
In case of an allegedly wrongful dismissal, a former employee may file a claim within one month of receipt of a copy of the dismissal order.
In case of disputes regarding remuneration matters, the limitations for the period when such a claim may be made in court do not apply.
The administrative/commercial courts have separate limitation periods for lodging court claims.
During the COVID-19 quarantine, the limitation periods are prolonged for the period of its duration.
Class Action Claims
Unlike in some other jurisdictions, there are no class action claims in employment disputes in Ukraine.
Collective Labour Disputes
Collective labour disputes are handled by separate specialised authorities – a labour arbitration body or the National Mediation and Conciliation Service under specific procedures. Collective disputes arise in case of disagreements between a labour collective representative body/trade union and an employer regarding, or in the process of concluding, a collective bargaining agreement, in relation to a violation of its provisions or other guarantees/rights of employees separately or the labour collective in general.
The labour legislation of Ukraine allows the parties to an employment agreement to opt for pre-judicial dispute resolution resorts by filing a claim with the employment disputes commission in cases allowed by the legislation (eg, cases regarding reinstatement at work are subject to consideration only by the court). A commission may be established at a company with more than 15 employees, and there is no dispute resolution fee. However, these commissions are still rare in Ukraine. The possibility to apply to an employment dispute commission does not preclude an employer/employee from filing a lawsuit before a court.
An employee may present his/her claims before an employment dispute commission within three months of the alleged violation of his/her rights (there are no limitation periods for remuneration-related disputes).
An employment dispute commission considers a case if at least two-thirds of its members are present at the respective meeting, and decisions are made by the majority of the members present. The decision may be challenged before a court by both employees and employers.
Mediation is not yet formally acceptable in labour law disputes, though several legislative initiatives to implement this form of dispute resolution were taken in the recent years. The latest attempt is Draft Law No 5555 on amending the Labour Code of Ukraine to improve the procedure for individual labour dispute resolution.
Pursuant to it, the parties to a labour agreement will have a possibility to refer to a mediation procedure as a pre-court dispute resolution resort. In case the parties fail to reach an agreement through mediation, or in case of failure of the other party to perform the obligations under it, they will have a right to file a lawsuit before the court.
Mediation will not preclude the parties to an employment agreement from filing a lawsuit before the court.
In case of a court dispute, both an employer and employee/former employee may claim compensation for the court expenses (including attorney's fees) confirmed by duly formalised documents (eg, court and post fee receipts, agreement with an attorney, invoices, etc).
Main Trends in Ukranian Labour Legislation: Pandemic-Driven Digitalisation of Employment Relations and Focus on Equal Opportunities
Ukrainian labour law has been quite outdated for a long time as it remained under the influence of the Soviet-era labour law. Thus, a lot of the legislative acts adopted long ago (some of them as far back as in the 1930s) are still in force and formally focus on employees' rights and protection. The Labour Code of Ukraine, though revised and amended several times every year, is not an exception.
Only recently, and due to the COVID-19 pandemic, has the labour legislation of Ukraine begun to develop, with new mechanisms and forms of work being introduced, shifting gradually to the new era of technologies and telework.
Pioneer provisions on remote working were introduced in spring 2020, in response to the COVID-19 quarantine restrictions. Though provisions on home-based work were in effect long before that (the relevant norms were adopted in 1980s), they did not reflect the needs of the modern employers and employees. Those provisions were applicable mostly to manual workers and required obligatory checks of the working conditions at the employee's home with the participation of a trade union representative (which is hard to imagine in the 21st century).
In February 2021, the legislation was further modernised, introducing detailed rules on remote and home-based work as well as distinguishing between these two types.
The remote work arrangements allow an employee to determine his/her place of work at his/her own discretion as well as the periods of his/her work under a flexible working time regime, with the guaranteed right to disconnect during determined hours. Another particularity is that remote work is performed using electronic communication.
In turn, home-based work differs by the obligation of an employee to work strictly at his/her home or another relevant place that cannot be changed without the employer’s prior consent. Moreover, home-based work is only allowed for employees that have (or are ready to obtain) certain practical skills and does not mandatory require the use of electronic communication. As an example, the home-based work model could be used by small production and handicraft businesses, tailor shops, etc.
In both remote and home-based work models, the employer is responsible for providing occupational safety training for employees (including via electronic communication), as well as ensuring the safety of the equipment provided (if any). In both cases, employees are responsible for the occupational safety of their workplaces.
Both remote and home-based work may be established during COVID-19 quarantine restrictions and after their relaxation (in the latter case, a written agreement is required – based on the model agreement to be approved soon).
10 June 2021 marks the start of the shift to an electronic employment record system that will fully replace the outdated labour (employment record) books by 10 June 2026. Employers are gradually returning paper-form labour books to employees after uploading scanned copies of the labour books to the electronic register of employment records. Prior to the changes, employers were obliged to keep employees' labour books in a special safe box and return them to employees only in case of dismissal. However, if a conservative employee insists on making entries to the paper-form labour book, the employer is still obliged to do so.
The electronic register is available for both employers and employees upon authorisation of a certified electronic signature.
Non-discrimination and equality
The legislation of Ukraine is moving towards international standards for ensuring equality and non-discrimination of employees at work. The Labour Code of Ukraine and the Law of Ukraine on Ensuring Equal Rights and Opportunities for Women and Men prohibit any kind of discrimination of employees and oblige employers to protect employees against sexual harassment and other gender-based violence as well as to prevent such cases. Employers in Ukraine are obliged to create equal conditions of work and provide equal pay for women and men with the same qualifications and working conditions (ensure fair wages).
Recently, the non-discrimination legislation took the following steps forward.
There are a few additional legislative initiatives currently pending at the Ukrainian parliament (Verkhovna Rada of Ukraine) regarding the further improvement of non-discrimination and inclusivity legislation, collective bargaining, collective redundancies, and so on.
Hidden and deemed employment
In the last few years, active measures were taken in Ukraine to eliminate the so-called "hidden" (when no official agreement is concluded with the employee) and "deemed" (when a services agreement is used instead of an employment agreement) employment by:
Additionally, there are legislative initiatives to define the criteria for the requalification of labour relations in law (similar to those indicated in ILO Employment Relationship Recommendation No 198), as requalification is currently carried out on a case-by-case basis following internal procedures of labour inspectors and the established court practice.
Employment in IT
Ukraine is famous for its rapid development in the IT-sector and has a growing number of highly qualified IT specialists. However, the labour legislation of Ukraine is not flexible enough for IT specialists and the companies that hire them. For this reason, IT specialists mainly opt for another form of conducting of their activity – as individual entrepreneurs providing services to their clients based on civil law service agreements/contracts. The companies hiring such IT specialists must prepare carefully drafted service agreements, avoiding any employment indicators to decrease the risk of recognition of the relations with such specialists as "deemed employment" and further penalties for the company and its officials (eg, avoiding any co-employment wording, focusing on the result of works/services rather than the process itself, avoiding subordination clauses, provision of bonuses and other employment incentives).
To make the legislation and working climate of Ukraine more investor-oriented, Law No 1667-IX was recently introduced (the Law was adopted on 15 July 2021 and came into effect on 14 August 2021). Among other things, the Draft Law envisages a special working regime – namely, gig contracts – for IT specialists hired by the companies that are members of the soon-to-be-created Diya City technological park. These contracts are to be more flexible than ordinary employment agreements and regulated by a separate law in terms of remuneration, working time, vacation provision, contract termination and other matters.
Although no complex labour law reform has been introduced as yet (there have been no further attempts to adopt a new Labour Code of Ukraine since the Draft Law No 2708 on Labour on 4 March 2020 was withdrawn due to the resignation of the cabinet of ministers of Ukraine), a lot of efforts have been made to make it more investor-oriented. The following new rules are also envisaged in different areas: