The main legislative act governing employment relations in Ukraine is the Labor Code of Ukraine - an act approved many years ago in the days of the USSR. There are also some other laws that have been enacted after Ukrainian independence, such as the Law on Remuneration of Work, On Leaves etc.
Under the law, employees are given a wider scope of rights when compared to employers. Labor legislation establishes minimum guarantees for employees, which cannot be contracted out by an employer and the employee (such as the length of working hours, annual leave, etc). It is important for the employer to be aware of the provisions of employment agreements that limit the employee’s rights and guarantees granted by the law which are considered void. Thus, in most cases it is impossible to foresee in the employment agreement the term, the additional grounds for dismissal, extra working hours, etc.
Usually the terms and conditions of an employee’s work are determined in a written labor agreement. In the meantime, as written labor agreements are not always required, the employee may be employed based on an employment order in which the name, the position, date work commenced and the salary are defined.
The obligations and duties of the employee are established in the employment agreement or in the job description, which should be read and signed by the employee before commencement of his/her work. The job description should be prepared carefully as the employee cannot be required to fulfil duties that are not directly stipulated in his/her employment agreement or job description.
An employee is entitled to work for several employers simultaneously unless otherwise not afforded by the law or in an employment agreement.
Although it is widely practiced in Ukraine for employers to make employment agreements for a certain period of time, employment agreements with definite terms may be concluded only if it is allowed by the law, if the employee requests so or due to the nature of work an indefinite term cannot be agreed.
The terms and conditions of employment cannot be changed unilaterally. If the terms of employment worsen (including decreases in salary) an employer has to give two months prior written notice to an employee.
There are specific types of labor agreements – labor contracts that may be concluded only in certain cases directly stipulated by the law. The law allows for the definition of additional terms and conditions in labor contracts that in fact may contract out the minimum guarantees and rights established by the law (e.g. by establishing additional grounds for material liability, dismissal, etc).
Salary
The salary of an employee is agreed between the employer and the employee. The monthly salary, however, cannot be less than the minimum monthly salary fixed by the law. Starting January 1, 2006 the minimum monthly salary is UAH 350 (approximately USD 69). Salary must be paid in Ukrainian currency twice a month with the interval not more than 16 days.
In Ukraine criminal responsibility is established for failure to pay salary.
Probation
Probation can be established in the employment agreement or in the order on employment for the purpose to check aptitude of a newly hired employee. The term of probation should not exceed three months. A longer term may be established subject to prior approval of the trade union organization but in any way should not exceed six months. The probation term for workers is limited by law to one month. If during the probation period it becomes evident that the employee does not meet the requirements established for his/her position, the employer may terminate the employment agreement without prior notification and payment of severance.
Working time, Time off and Overtime
The standard work week is 40 hours with two days-off.
Time worked by an employee over the standard work week is considered overtime. Overtime work is allowed in extraordinary circumstances that are directly stipulated in the law and is subject to prior approval of a trade union organization. An employee cannot be engaged in overtime work that exceeds four hours during two consecutive days. Moreover, the total overtime work of an employee per year cannot exceed 120 hours as should be recorded by the employer. Overtime work is subject to extra payment according to rules established by the law and an employee cannot be compensated for overtime work by granting the time off. There are certain categories of employees that may not be required to work overtime (such as pregnant women, employees under age of 18, etc).
The Labor Code of Ukraine prohibits work on a day-off and official holiday, except in certain exceptional circumstances, such as:
The work on days-off and official holidays should be paid in double or compensated by time off should an employee give consent.
Annual leave
Employees are entitled to annual leave of 24 calendar days (the first one may be requested by an employee upon expiration of a 6 months period after commencing employment).
For irregular working days, an employee may be provided with the additional annual leave of up to seven calendar days as stipulated in the collective agreement. Some categories of employees are entitled to additional leaves.
Maternity leave
Women have the right to maternity leave of 70 calendar days prior to and 56 calendar days after birth. Longer maternity leave after birth is provided for in the event of complications while giving birth or in the case of multiple births. Maternity leave is paid by the State Social Insurance Fund of Ukraine. After maternity leave a woman or another person that cares for a child may request leave until the child is of the age of three. During the entire period of such leave, the employee’s position should be kept.
Sick leave
Sick leaves are granted to employees for the term of their disability. As the employees are insured by the state, sick leave compensation is covered by the State Social Insurance Fund against Temporary Disability. Absence from work due to disability requires an employee to submit a medical certificate only after his/her recovery. This document is also the ground for payment of the compensation.
Termination
An employment agreement may be terminated by the mutual consent of an employee and an employer at any time.
An employee is entitled to terminate his/her indefinite term employment due to any reason by advanced notice 14 days prior to dismissal (in the event of so-called “reasonable excuse” an employee may require termination on requested date and even immediate termination). A definite term employment agreement may be terminated by an employee due to:
Unlike an employee, an employer may terminate employment only due to one of the grounds stipulated by the law (e.g. reduction, employee’s poor qualifications or disability, absence from work, etc) by giving at least two months prior written notice to an employee. The Labor Code provides for severance in amount of one average employee’s month salary to be paid by the employer in the event of employment termination initiated by an employer. In the event of violation of employment legislation by employer, the latter must pay severance in amount no less than three average month’s salary.
Safety
An employer is obliged to ensure safe and harmless working conditions for its employees, which include safety of technological processes, machines, mechanisms, equipment and provision for means of collective and individual defence, complying with effective sanitary terms.
During certain productions, employees should be provided with special clothes, detergents and disinfectants.
According to the law, employees are insured against production accidents and compensation costs in the event of such accidents as covered by the State Fund of Social Insurance against Production Accidents and Professional Diseases.
Material liability
An employee is liable for damages, caused to an employer as a result of violation by the employee of his/her work duties. The full material liability is strictly regulated by the law and usually an employee is liable within the amount of his/her monthly average salary. Save for several other grounds stipulated by the law, full material liability may be rested only on those employees with whom the agreements on full material liability are concluded. The law establishes a limited list of employee's positions and work when an agreement on the full material liability may be concluded (such as cashiers, storekeepers, etc). Full material liability may be also imposed in certain cases even if the agreement on full material liability was not concluded, e.g. if an employee committed a crime that resulted in damages to an employer, damages were caused by an employee intoxicated by alcohol, drugs, etc.
Prepared in accordance with the materials of DLA Piper Ukraine LLC
The Constitution of Ukraine is the primary legal act in the field of foreign citizens’ employment in Ukraine. Article 26 of the Constitution provides foreigners, which legally reside in Ukraine, with rights equal to those of Ukrainian citizens, in particular, in the field of work and employment, as well as social security, except for cases stated by the Constitution, laws or international agreements of Ukraine. Labor relations are also regulated by international agreements, which Ukraine has concluded with countries – members of the CIS (Belarus, Armenia, Moldova, the Russian Federation, Azerbaijani Republic), as well as with other states such as Poland, Vietnam, the Lithuanian Republic and the Slovakian Republic.
Foreign employment in Ukraine is subject to regulation by the Code of laws on labor of Ukraine, laws of Ukraine “On employment of population,” “On legal status of foreign citizens and stateless citizens,” and “On agreements of product distribution.”
The mentioned legal documents develop the constitutional principle of equal legal status for Ukrainian and foreign citizens, for instance, when involved in investment entrepreneurship. At the same time, they determine some peculiarities related to labor agreements with foreign citizens, as well as special features of labor agreement fulfillment by the parties.
Foreigners, who have come to Ukraine to be employed for a certain period, may work on the basis of an employment permit that was received through a due order.
The need to obtain such a permit is defined by Article 8 of the Law of Ukraine “On legal status of foreign citizens and stateless citizens” and partially by the second part of the Article 8 of the Law of Ukraine “On employment of population.”
The exceptions are cases when foreign citizens are employed in Ukraine and hired by investor in the framework and to positions (by professional field) determined by the product distribution agreement; physical individuals involved in entrepreneurial activities, as well as foreigners, which registered their relations with an employer by civil agreements. Persons, which suit these categories, are not required to get a permit.
The procedure for issuing a permit, terms of its validation period, and other matters are regulated by the Decree of the Cabinet of Ministers of Ukraine “On approval of the Procedure of employment permit issue to foreign and stateless citizens in Ukraine” No.2028 of November 1, 1999.
The State employment center of the Labor Ministry, or upon its instruction, the respective employment centers of the Autonomous Republic of Crimea, regions, cities of Kiev and Sevastopol prepare and give employment permits to an employer, who invites a foreigner to a particular position (by professional field) in Ukraine. The pre-requisite for the permit to be issued is if the region has no workers able to perform such a job, or if there is a substantial number of expedient reasons why a foreign specialists’ labor should be used, except as otherwise provided by international agreements of Ukraine.
To fulfill Ukraine’s obligations related to WTO accession and which are subject to the Labor Ministry’s overview, a 6-month break in renewing permits for continuing professional activities for foreigners in Ukraine after a 4-year period of permanent stay has been eliminated. To regulate intracorporate cessionaries stay in Ukraine at foreign investment enterprises, the draft Decree on issuing employment permits for the cessionaries for the period stated by the Contract has been developed, negotiated with the involved ministries and institutions, and submitted for consideration to the Cabinet of Ministers of Ukraine.
Reference: In compliance with the Agreement on partnership and cooperation between Ukraine and the European Community and its member-states, intracorporate cessionary is deemed an individual working for an organization on the territory of either Party and is being temporary transferred in the framework of economic activities on the territory of another Party.
According to the Procedure, an obligatory requirement for issuing a permit is the employer’s registration as a taxpayer and payment of an obligatory duty. To secure implementation of such principles, the Order of the State tax administration of Ukraine No.261 of May 6, 2004 ratified the reference form on employer’s payment of all taxes and duties spelled out by the law. This reference form is given to the respective employment centers and can be obtained by an economic entity immediately after registration with the State tax administration.
Only employer’s debt, which is stated in the reference form (article 6), is a violation of the legislation of Ukraine and is a reason for refusal to issue a permit for employment of foreign citizens.
Legislation of Ukraine puts some restrictions on application of foreign citizens’ labor in Ukraine. In particular, foreign citizens may not be appointed to some positions or be involved in certain work, if, according to the laws of Ukraine, such activities are necessary to receive citizenship (for instance, state service, elected positions in state authority bodies or local self-governments, the field of justice, etc.). The corresponding restrictions are set directly by the Constitution of Ukraine, as well as by special laws, such as “On state service,” “On judicial system of Ukraine,” etc.
In case the labor of foreign citizen is used without a permit from the State employment service of Ukraine, the violators-employers are charged with a fee equal to 50-times (before-taxes) the minimum income for each of the hired employees.
Prepared in accordance with the materials of Ministry of labor and social policy of Ukraine