1 Legal framework
1.1 Are there statutory sources of labour and employment law?
The main statutes in the sphere of labour and employment law include:
- the Labour Code of Ukraine dated 10 December 1971, No 322-VIII;
- the Law of Ukraine on Remuneration dated 24 March 1995, No 108-95-BP;
- the Law of Ukraine on Employment of Population dated 5 July 2012, No 5067-VI;
- the Law of Ukraine on Vacations dated 15 November 1996, No 504-96;
- the Law of Ukraine on Collective Bargaining Agreements dated 1 July 1993, No 3356-XII; and
- the Law of Ukraine on Compulsory State Social Insurance dated 23 September 1999, No 1105-XIV.
1.2 Is there a contractual system that operates in parallel, or in addition to, the statutory sources?
The parties to an employment agreement are free to agree on any other terms in addition to the compulsory provisions (eg, salary, employment commencement date, work regime, job function), provided that these terms do not contradict the law. However, in certain cases, a special type of employment agreement – that is, a labour contract – may be concluded with special categories of employees as envisaged by law (eg, chief executive officers, members of the executive body of the company, athletes, teachers). Among other things, such contracts may envisage additional grounds for termination and are usually concluded for a fixed term.
1.3 Are employment contracts commonly used at all levels? If so, what types of contracts are used and how are they created? Must they be in writing must they include specific information? Are implied clauses allowed?
It is not obligatory for an employment agreement to be in writing, except for certain mandatory cases (eg, agreements with minors, employment contracts, agreements for remote/home-based work). Usually, such agreements are formalised by the employee's application and the employer's order.
All employment agreements may be divided into the following categories:
- Depending on the term:
- open-ended employment agreements;
- fixed-term employment agreements; and
- employment agreements concluded for the term for the performance of certain types of work.
- Depending on the type of engagement in labour activity:
- part-time employment agreements; and
- full-time employment agreements;
- Depending on the type of employer-employee relations:
- employment agreements for primary employment (usually full time); and
- employment agreements for secondary employment (additional employment agreements, usually part time).
There are also certain types of employment agreements relating to short-term and seasonal work; however, they are currently regulated by outdated statutes from the Soviet era.
Although Ukrainian employment law does not explicitly specify obligatory terms for employment agreements, in practice, the following terms must be included:
- the names of the parties;
- the employment commencement date;
- the remuneration and terms of its payment;
- the hours of work;
- the place of work; and
- a job title/job description.
Ukrainian employment law does not recognise implied clauses. However, statutory rules will have mandatory application if:
- certain issues are not regulated by the text of the employment agreement; or
- the provisions of the agreement are less favourable to the employee than the legislative rules.
Additionally, collective bargaining agreements, rules of internal labour procedure and other internal procedures may envisage supplementary benefits and terms to be followed.
2 Employment rights and representations
2.1 What, if any, are the rights to parental leave, at either a national or local level?
Women are entitled to 70 days of maternity leave prior to the expected delivery date and 56 days (or 70 days in the case of complications or the delivery of two or more children) starting from the delivery date. Pay during pregnancy and delivery leave is based on a sick leave medical certificate. When calculating maternity pay, the employer will consider the employee's average salary in the 12 months prior to the maternity leave. A father (or another adult family member of a single father/mother, such as a grandparent) is entitled to up to 14 calendar days of unpaid leave to take care of the child after birth.
A woman (or the child's father, adoptive parent or guardian) is also entitled to unpaid leave until the child reaches the age of three (or six if the child needs home care).
A collective bargaining agreement may contain more favourable guarantees for employees than the legislative rules – for example, the employer may grant additional days of vacation or additional financial aid payments for all or part of the childcare leave.
2.2 How long does it last and what benefits are given during this time?
Please see question 2.1.
2.3 Are trade unions recognised and what rights do they have?
A trade union is a voluntary, non-profitable non-governmental organisation of citizens united by mutual interests by the nature of their professional (labour) activity (study). Trade unions are established to represent, exercise and protect the labour, social and economic rights and interests of their members. They can be primary, local, district, regional, republican or national. Foreign citizens and stateless persons are not allowed to establish trade unions, but are entitled to join them if this is permitted by the union charter.
The elected body of a primary trade union has the following rights:
- to conclude and control the implementation of collective agreements with the employer;
- to ensure that the employer observes and ensures compliance with working safety regulations and other legislation concerning employees' rights;
- to decide whether to provide consent to the employer regarding the dismissal of employees in certain cases defined by law;
- to approve employee vacation schedules, shift schedules and certain other internal documents of the employer; and
- to participate in the social development of the company, the improvement of working conditions and so on.
The collective bargaining agreement may contain more favourable guarantees for employees who are members of trade unions and/or impose additional obligations on the employer in respect of trade unions and their members as compared to the legislative rules.
2.4 How are data protection rules applied in the workforce and how does this affect employees' privacy rights?
Employers should observe the basic principles of data protection prescribed under Ukrainian law, as follows:
- Purpose limitation: Data must be collected for specified, explicit and legitimate purposes, and must not be further processed in a manner that is incompatible with those purposes;
- Lawfulness: Each data processing operation must have a legal basis; and
- Data minimisation: The data collected must be adequate, relevant and limited to what is necessary in relation to the purposes of the processing.
Depending on the purpose of data processing, different legal bases may apply:
- Consent: This must be freely given and can be withdrawn. It is not recommended to process personal data under consent if it is possible to refer to any other legal basis.
- Provisions of legislation: For instance, the processing of certain personal data by the employer may be necessary in order to warrant safe work conditions.
- Performance of a contract: In this case the contract must include provisions on the collection and processing of personal data of specific categories of personal data (eg, under an employment agreement/contract).
- Vital interest: In this case the employer must prove that the processing is needed to protect an interest which is essential for the life of the data subject or of another natural person. Ukrainian data protection law still requires the consent of the data subject in such cases where it is possible to obtain it.
- Performance of a legal obligation: This applies where the employer is obliged to report certain data to the state authorities (eg, the tax authorities).
- Legitimate interest: This applies where the legitimate interest is such as to prevail over protection of the rights and freedoms of the data subject.
There are also limitations on the processing of sensitive data by employers. As a rule, the employer must notify the Ukrainian data protection authority of any processing of sensitive personal data. However, if the data processing is necessary pursuant to the rights and obligations of the employer as the controller of personal data under the law, there is no need for notification.
Where the personal data of employees is transferred abroad or to third parties, the employer is obliged to notify the employees accordingly.
Personal data must be timely deleted as soon as the purpose for its collection and processing ceases to exist.
It is also recommended to take measures to fulfil the accountability principle in relation to personal data processing, such as:
- adopting policies on personal data;
- appointing responsible personnel; and
- keeping a register of personal data processing.
The illegal processing of personal data leads to administrative liability under Ukrainian law.
2.5 Are contingent worker arrangements specifically regulated?
Contingent worker arrangements are not specifically regulated in Ukraine. In most cases, such workers are self-employed persons or individual entrepreneurs. Contingent workers do not enjoy the same range of rights as employees (eg, no guarantees in case of dismissal, vacation, work and rest period restrictions).
A few draft laws are currently before the Parliament in relation to:
- the gig economy – for example, a draft law that will govern companies in the soon-to-be-created Diya City technological park (Draft Law 4303); and
- zero-hours contracts (Draft Laws 5161 and 5161-1).
3 Employment benefits
3.1 Is there a national minimum wage that must be adhered to?
Yes, this changes from time to time as approved by the Law of Ukraine on the State Budget for the respective year. Currently, it is UAH 6,000.
3.2 Is there an entitlement to payment for overtime?
As a rule, overtime is not allowed. Overtime work – that is, over 40 hours per week or eight hours per day:
- is allowed by law only in exceptional cases (eg, to address an emergency or fulfil a need to maintain continuous production);
- may not exceed four hours on two consecutive days or 120 hours a year; and
- is compensated at double rates.
Work on weekends and on public and religious holidays:
- is also allowed only in exceptional cases; and
- is compensated at double rates or by an additional day off in lieu.
If such overtime is worked only occasionally, an irregular working hour regime may be established. This allows the employee to work after normal hours from time to time (ie, not regularly) if necessary, but without additional payment for such hours. The employee is nonetheless entitled to compensation in the form of additional days of annual vacation (from one to seven – to be specified in the employment agreement) for working to this regime. In such case, it is necessary to specify the regime and the additional vacation days in the relevant employment agreement or the collective bargaining agreement.
3.3 Is there an entitlement to annual leave? If so, what is the minimum that employees are entitled to receive?
The statutory paid annual vacation is 24 calendar days (basic vacation). For certain categories of employees, the law provides for a longer vacation period – for example:
- employees with a disability are entitled to 26 or 30 calendar days, depending on the class of disability; and
- minor employees are entitled to 31 calendar days.
There are also some additional annual paid vacation types in Ukraine – for example:
- for work of a special nature, such as:
- non-standard working hours – up to seven calendar days; and
- work in harmful and dangerous conditions – up to 35 calendar days;
- for employees with two or more children under the age of 15 or an adult child with a disability classed as type A, group I – 10 calendar days; and
- for army veterans and war-disabled persons –14 calendar days.
The total number of days of annual vacation (both basic and additional) cannot exceed 59 calendar days.
Collective bargaining agreements and/or employment agreements may contain more favourable guarantees for employees regarding vacations.
3.4 Is there a requirement to provide sick leave? If so, what is the minimum that employees are entitled to receive?
Employees in Ukraine are insured by their employer (and at the employer's expense) against illness or temporary disability through (mandatory) payment of the single social contribution. The first five days of illness or temporary disability are to be reimbursed by the employer, subject to the provision of a medical certificate by the employee. The State Social Security Fund reimburses the employee's lost earnings for the period of illness or temporary disability starting from the sixth day of illness or temporary disability (with some exceptions).
The minimum sick leave payment varies depending on the periods of social insurance paid for either by the employer on the employee's behalf or by the employee himself or herself (eg, if self-employed):
- 50% of the average daily earnings – up to three years;
- 60% of the average daily earnings – between three and five years;
- 70% of the average daily earnings – between five and eight years; and
- 100% of the average daily earnings – more than eight years.
Due to the COVID-19 pandemic, new provisions have been introduced into Ukrainian law to allow sick leave to be granted with the payment of 50% of the employee's average daily earnings, regardless of seniority (100% for medical workers), to employees who are required to self-isolate (where instructed to do so by a doctor and under medical observation).
3.5 Is there a statutory retirement age? If so, what is it?
The statutory retirement age is 60, as long as the employee has accrued a sufficient social insurance seniority period prior to retirement (ie, at least 35 years from 2028 onwards). The seniority period that is currently required is 28 years; this will increase by one year each calendar year until 2028. If the employee has not accrued a sufficient seniority period, he or she may retire at the age of 65 if he or she has accrued a seniority period of at least 15 years (or earlier if he or she accrues the necessary seniority period between the age of 60 and 65).
There are no limits on the maximum employment age. However, there are certain age limitations for certain types of state (civil) service and military service.
In case of retirement, the termination is usually formalised pursuant to other grounds (mutual agreement or termination at the employee's initiative).
4 Discrimination and harassment
4.1 What actions are classified as unlawfully discriminatory?
The Labour Code precludes discrimination based on:
- ethnic and social origin;
- religious, political or other beliefs;
- gender identity;
- sexual orientation;
- property status;
- place of residence;
- suspected or actual HIV/AIDS status;
- membership of a trade union;
- participation in a strike;
- intention to pursue or actual pursuit of rights before the courts or other bodies, or support of other employees in protecting their rights;
- reporting of possible corruption or corruption-related offences;
- linguistic abilities; or
- other discriminatory criteria.
Under the Law of Ukraine on Ensuring Equal Rights and Opportunities for Women and Men, employers are obliged to take measures to prevent and protect against sexual harassment and other gender-based violence. Moreover, they must ensure equal working conditions and implement equal pay for women and men with the same qualifications and working conditions. Employers are restricted from specifying gender in a recruitment ad, except for certain types of work which must be performed by a person of a specific gender.
4.2 Are there specified groups or classifications entitled to protection?
Special guarantees vary depending on the type of protected employees. Those employees who enjoy certain additional guarantees and additional protection include:
- pregnant women;
- women with a child under the age of three (or six if the child requires homecare), single mothers with a child under the age of 14 or a child with disabilities, single fathers and adoptive parents/guardians;
- persons retired from military or alternative (non-military) service;
- conscripted persons (in case of mobilisation of the military forces) or persons with military service/alternative (non-military) service contracts;
- internally displaced persons;
- trade union members and members of a trade union's elective body; and
4.3 What protections are employed against discrimination in the workforce?
The legislation provides for additional guarantees to certain categories of employees:
- a prohibition on establishing a probation period (eg, for minors, persons retired from military or alternative (non-military) service, pregnant women, single mothers with a child under the age of 14 or a child with a disability, and internally displaced persons);
- a prohibition on dismissal upon the employer's initiative (eg, for pregnant women, women with a child under the age of three (or six if the child requires homecare), single mothers with a child under the age of 14 or a child with a disability, single fathers, adoptive parents and guardians, except in the case of the winding up of the employer);
- pre-emptive rights to stay at work in case of lay-offs or to be employed in similar positions that open up within one year of lay-off (eg, pre-retirement employees, employees with family duties, persons retired from military or alternative (non-military) service);
- preferences in establishing a part-time work regime at the employee's request (eg, pregnant women, women with a child under the age of 14 or a child with a disability);
- pre-emptive right to work from home/remotely (eg, pregnant women, women with a child under the age of three (or six if the child requires homecare), women with two or more children under 15, persons with disabilities and their family members);
- right to retain their place of work and average salary (eg, conscripted persons (in case of mobilisation of the military forces) or persons with military service contracts);
- protection against certain types of dismissals (eg, disciplinary dismissals, lay-offs) without the trade union's consent (for trade union members);
- protection against certain types of dismissals (eg, disciplinary dismissals, lay-offs) without the additional consent of the trade union of the highest rank, special rules for the application of disciplinary measures, additional vacation time and paid free hours for trade union-related work and so on (for members of the trade union elective body); and
- other guarantees.
Additional guarantees may be established in individual employment agreements and/or collective bargaining agreements.
4.4 How is a discrimination claim processed?
There are no specific procedures for handling discrimination claims at the legislative level. However, such rules may be established by employers at the local level in internal labour regulations or internal anti-discriminatory policies. Many employers (especially the Ukrainian branches of international groups of companies) have a separate compliance system that includes schemes for reacting to such allegations/violations (eg, whistleblowing hotlines, internal investigation procedures). In fact, this is the pre-court stage for processing discrimination claims internally.
An employee may file suit against the employer or its officials/employees through the general court procedure (there are no special proceedings). However, court disputes arising from employee claims of harassment or discrimination in the workplace are not common in Ukraine.
4.5 What remedies are available?
Internal investigations and consideration of the claim by the employer at the internal level do not preclude the employee from initiating court proceedings (a lawsuit against the employer or its officials/employees).
The Labour Code was also recently supplemented with a new provision (Article 60-2) allowing employees who have suffered discrimination at work to request a temporary transfer to remote working (for up to two months) if this is possible based on the employee's job function and the employer's capacity to provide such working conditions.
4.6 What protections and remedies are available against harassment, bullying and retaliation/victimisation?
Please see questions 4.4. and 4.5.
Additional guarantees/remedies may be established in individual employment agreements and/or collective bargaining agreements, internal policies and codes of conduct.
5 Dismissals and terminations
5.1 Must a valid reason be given to lawfully terminate an employment contract?
Parties may terminate employment only in the limited circumstances listed by the Labour Code. The Labour Code provides an exhaustive list of grounds for termination of labour relations, including the following:
- agreement of the parties;
- the expiry of a fixed-term agreement;
- the employee's will (with two weeks' notice, unless there are certain significant reasons that impede the employee from continuing in his or her work);
- grounds arising from the employer's initiative, such as:
- disciplinary violations (eg, a one-off gross violation – applicable to certain categories only (eg, chief executive officer, chief accountant); systematic non-performance of duties (if one or more previous warnings have been issued to the employee in the past year); truancy; intoxication);
- reinstatement of wrongfully dismissed employees;
- non-appearance at work for more than four months due to temporary disability; and
- recall of officials (applicable to certain categories of employees only); and
- other grounds, such as:
- refusal of the employee to be transferred to work in another region together with the enterprise, or to continue work due to a change in essential working conditions;
- the entry into force of a judgment, pursuant to which the employee is sentenced to imprisonment or any other punishment that excludes the possibility to continue work; or
- such other reasons as are set out in the labour contract.
Company officials can be dismissed through the simplified procedure of ‘recall of officials', without any prior notice or definite grounds, on payment of severance in the amount of at least six months' average salary.
5.2 Is a minimum notice period required?
In case of termination of an open-ended employment agreement at the employee's initiative, the notice period is two weeks (this may be reduced for good reason).
In case of a fixed-term employment agreement, termination at the employee's initiative is possible only if there is good reason for such termination (in this case, such agreement is to be terminated on the date requested by the employee), unless the employment agreement/contract envisages specific rules in this regard.
The Labour Code does not allow for dismissal at the employer's initiative as termination on notice (as a separate ground for termination), even if both parties have agreed to this in the employment agreement.
The notice period for termination of employees due to liquidation, reorganisation, bankruptcy or restructuring and staff redundancy must be at least two months (with at least one month's average salary as severance pay).
In case of disciplinary dismissal (ie, behaviour-related), certain terms regarding the disciplinary procedure must be followed; however, these are not ‘notice periods', but rather limitation periods.
5.3 What rights do employees have when arguing unfair dismissal?
The employee may challenge his or her dismissal before the court within one month of receipt of the labour book or a copy of the dismissal order.
In addition to a reinstatement claim, the former employee may demand payment of the average daily earnings for the period between dismissal and the date of reinstatement, as well as moral damages and court expenses (including legal support).
5.4 What rights, if any, are there to statutory severance pay?
The amounts of statutory severance pay are envisaged in the Labour Code and certain special laws (aimed at the protection of special categories of employees – for example, persons who suffered from the Chernobyl catastrophe or who participated in the remediation of its aftermath). The minimum amount of statutory severance pays falls within the range of one to six months' average monthly salaries of the employee (depending on the grounds for dismissal), calculated based on the salary and other payments received by the employee in the two months prior to the dismissal date.
As a rule, severance payments must be paid in case of dismissal:
- at the employer's initiative (the list of such grounds is set out in the Labour Code, but not all dismissals at the employer's initiative will incur a severance payment);
- due to refusal of the employee to continue in his or her work after a change to the essential conditions of his or her work; or
- upon the employee's initiative due to a violation of the labour legislation by the employer.
The amount of severance does not depend on the period of seniority in Ukraine.
Collective bargaining agreements and/or employment agreements/contracts may envisage more favourable guarantees for employees (ie, higher severance pay).
6 Employment tribunals
6.1 How are employment-related complaints dealt with?
Employment-related disputes are subject to consideration by an employment disputes commission (if established at the employer's company – please see question 6.2.) and/or by the court. Certain claims are reserved for consideration only by the court (eg, regarding reinstatement).
Employment-related disputes are subject to consideration by the following courts:
- General courts: General jurisdiction over claims arising from employment relations, with some exceptions (below);
- Administrative courts: Disputes between employee civil servants/public officers and their employer (ie, public service organisations, bodies or institutions);
- Commercial courts: Disputes between companies and their officials in certain cases (corporate recalls and appointments). The Supreme Court of Ukraine published its position that disputes relating to the dismissal of officials due to their recall (paragraph 5, part 1, Article 41 of the Labour Code) are to be considered by these types of courts.
The employee must file his or her claim with the general court within three months of the violation of his or her labour rights, or of learning of such violation. If the dispute involves the unlawful dismissal of the employee, he or she may file the claim within one month of receipt of a copy of the dismissal order or labour book. There are no limitations for disputes regarding salary payments.
The commercial and administrative courts have separate rules for proceedings and timeframes for the submission of court claims. Decisions of the courts of first instance may be subject to appeal before the regional courts of appeal and thereafter before the Supreme Court (cassation).
6.2 What are the procedures and timeframes for employment-related tribunals actions?
Labour collectives of employers that employ more than 15 employees can create employment dispute commissions to consider individual disputes of their employees. There is no fee for the parties for the consideration of a dispute by an employment dispute commission. The employee must file his or her claim before the employment dispute commission within three months of the violation of his or her labour rights, or of learning of such violation. There are no limitations for disputes regarding salary payments.
A meeting of the employment dispute commission is valid if at least two-thirds of its members are present. Decisions are adopted by a majority of voices of the commission members attending the meeting. The parties must be provided with copies of the decision within three days of its adoption.
The possibility to apply to the employment dispute commission does not preclude an employee from filing a lawsuit against the employer before the court. Both parties to the dispute have the right to challenge the employment dispute commission's decision before a court.
In practice, employees rarely refer to employment dispute commissions and such dispute resolution bodies are seldom established.
7 Trends and predictions
7.1 How would you describe the current employment landscape and prevailing trends in your jurisdiction? Are any new developments anticipated in the next 12 months, including any proposed legislative reforms?
Ukrainian labour law is quite outdated, as many statutes either were adopted during the Soviet era (some of the acts in force were adopted back in the 1930s) or do not address the challenges of the modern era (eg, provisions on remote working were introduced only in Spring 2020, in response to the COVID-19 quarantine restrictions).
However, in the second half of 2020 and the first half of 2021, several attempts were made to amend various labour acts. Some of these were successful, while others are still under consideration by the Parliament. The Ministry of Ukraine for Economic Development, Trade and Agriculture is primarily driving the reforms and is preparing certain additional draft laws that should follow soon.
The most interesting draft laws pending are the following:
- Draft Law 5388 on the deregulation of labour relations regarding probation periods, fixed-term agreements and written employment agreements, termination of employment relations, the role of trade unions, approval of the employer's internal documents, overtime and work on weekends, holidays and days off, full material liability and so on;
- Draft Law 5266 on strengthening the protection of employee rights with regard to protection against discrimination, collective bargaining, mass dismissals and so on;
- Draft Laws 5054 and 5054-1 on defining the criteria for requalification of labour relations; and
- Draft Laws 5161 and 5161-1 on zero-hours employment agreements.
8 Tips and traps
8.1 What are your top tips for navigating the employment regime and what potential sticking points would you highlight?
Ukrainian labour law is quite outdated, but efforts are underway to update it and make it more investor-oriented. New work arrangements and opportunities were recently introduced (eg, flexible working hours, remote working, conversion to electronic labour books and sick leave). The introduction of new rules on the deregulation of the labour legislation is also planned (eg, reducing the role of trade unions, introducing zero-hours employment agreements and gig economy contracts).
Among other peculiarities, the following should be noted:
- Company CEOs should be employed within the terms of an employment contract executed in writing, as a CEO is also considered to be an employee.
- Foreigners may be employed in Ukraine, subject to the employer obtaining a work permit in advance (with certain exceptions). Based on this work permit, the employee may obtain a temporary residence permit (if necessary).
- Ukrainian law allows businesses to use the staff of other companies without formally employing them (eg, temporary agency activities and outsourcing), but in some respects, the activities of temporary agencies still fall within a grey zone.
- The Labour Code sets out an exhaustive list of grounds for dismissal (eg, dismissal for disciplinary reasons), and each ground requires that certain conditions be met.
- Cross-border employment relations remain unregulated.
- Labour inspectors have the authority to oversee employers' compliance with labour laws and have a wide range of powers, with inspections taking place as surprise audits. Sanctions for many violations are quite stringent (eg, for hidden employment or non-payment of salaries).
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.