L&M Finance Group


On December 28, 2019, the Verkhovna Rada of Ukraine registered the draft Law of Ukraine "On Labor" (hereinafter - the Draft), developed by the Government of Ukraine. We have analyzed the project and are forced to state that it will, if adopted, really make a lot of interesting changes in the working days of Ukrainians. Among other things, we highlighted the following key points:
  • it was established that the accounting of labor activities of workers is carried out in electronic form (put an end to paper work books);
  • the content of the labor contract and its individual types is provided, and also the following types of the labor contract are highlighted: (1) unlimited (2) urgent (not more than 5 years), (3) short-term (for up to 2 months) , (4) seasonal (during a certain period (season)) (5) with non-fixed working hours (the obligation to perform work arises subject to the availability of available work), (6) a student’s employment contract (a combination of the employee fulfilling training duties at the workplace) , (7) an employment contract with a domestic worker (for the purpose of household (family) services);
  • the signs of labor relations are clearly defined: (1) regular remuneration, (2) personal performance, (3) workplace, (4) performance of work similar to the work of full-time employees, (5) establishment of working time and rest time in the interests of the employee. Also, the presence of such a relationship can be established on other grounds;
  • a mandatory written form of an employment contract is provided (electronic form is also considered written);
  • the probationary period is established by the employment contract and, unless otherwise provided in the employment contract, may not exceed 3 months. A list of cases in which a probationary period is not established (an employee under 18 years old, a pregnant woman, an employment contract for up to 12 months, etc.) is also established;
  • the employer has the right to terminate the employment contract unilaterally with prior notice, the period of which depends on the sum of the periods of the employee’s work with this employer (from 15 to 90 days). It is envisaged that the obligation of warning may be replaced by compensation;
  • the employee has the right to terminate the employment contract unilaterally with prior notice at least two weeks in advance;
  • the employment contract may be terminated at the initiative of the employer due to the employee's failure to appear for work for more than 4 consecutive months or 150 days during the working year as a result of temporary disability
  • the institute of a flexible regime of working hours and home work is provided;
  • weekly continuous rest (weekends) must be at least 24 hours during each seven-day period (instead of 2 days off);
  • holidays - the same, however, transfers of working days to create favorable conditions for celebration are determined individually by agreement of the parties;
  • annual basic paid vacation - 24 calendar days;
  • in an employment contract, the amount of wages may be determined in the monetary unit of Ukraine, indicating the equivalent amount in foreign currency;
  • greater freedom is provided in the application of overtime work: their application is provided for by a labor or collective agreement (the maximum number has not been established).
However, in view of the foregoing, we see the following significant deficiencies in this Project:
  • a non-exhaustive list of signs of labor relations and, as a consequence, the provision of broad discrete powers of labor inspection;
  • the employer's ability to unilaterally terminate the contract without even informing the employee in advance (by paying compensation). It should be understood that such compensations will be calculated from the salary, very often the minimum;
  • the provision that in the event that a court decision establishes the fact that a person has performed work (rendering services) without concluding an employment contract, such persons lose the right to benefits or the use of a subsidy to pay for housing and communal services within two years from the date of entry into force court decisions;
  • the provision that the employer, when collecting information from past workplaces, must notify the employee (it can lead to manipulation, and, as a result, reduce the quality of personnel);
  • an extremely high permissible term of absenteeism for dismissal is 10 days (which can be critical, say, for design work or continuous production).
Thus, in our opinion, despite numerous positive innovations, the Project contains some problem points and needs to be finalized.