Labor Code 2020: Attorney's View of the Bill

The need to adopt a new codification of labor legislation has been discussed for a very long time, both at the legislative level and directly by employers.

On November 8th, 2019, the Verkhovna Rada registered drafts of the Labor Code of Ukraine No. 2410 and 2410-1, which are identical, excluding minor technical corrections. Lawyers of Legal Alliance Company analyzed the bill and made some conclusions on it.

The draft Labor Code, in contrast to the current one, contains provisions on remuneration for labor, leave and determination of the amount of losses. Some of the most interesting novelties of the published bill are:

1. Labor relations. The criteria by which it is necessary to distinguish labor relations from others, in particular civil law. Here the practices that have already been proposed to be introduced, were used, which we wrote about in the article "No Miracle Happened: a New Draft Amendments to the Labor Code."

2. Employment contract:

• Clear requirements to the form and content of the contract - to the place of work, grounds for fixed-term contract, labor function, conditions of remuneration, work and rest, the nature of work, working conditions at the workplace.
• Expanding and detailing the list of grounds for concluding a fixed-term employment contract.
• The provision on the labor contract is proposed to be excluded from the law, therefore existing labor contracts will be considered as labor contracts with the preservation of their content and substance.

3. Dismissal and removal of an employee:

• Introduction of the institution of suspension of the employment contract, that is, the temporary release of the employer from the obligation to provide the employee with work and the temporary release of the employee from the obligation to perform work.
• Expanding the list of grounds for suspending an employee from work, in particular for the duration of an internal investigation and disciplinary proceedings.
• By agreement of the parties to the employment contract, warnings of impending redundancy may be substituted by monetary compensation in the amount of at least two average monthly salaries. A warning period can be reduced to one month by agreement of the parties.
• The introduction of a direct prohibition of redundancy if an employee has more grounds for keeping his job (preemptive right) than other employees.
• A change in material working conditions is redundancy initiated by the employer.
• The employer has the right to dismiss an employee within two months from the date of adoption of the relevant decision by the performance appraisal commission.

4. Organization of work and working time, working conditions:

• Possibility of dividing into parts and establishing a flexible working time, remote work mode. For more details see the article "Potential Changes in the Form of Labor Organization - New Proposals of the Ministry of Social Policy".
• It is proposed to consider truancy as absence of an employee not for 3 hours, but during the working day without good reason.
• Inclusion of the right to conduct inspection visits. We wrote about this in "Inspections in the Labour Area: Current Status and Legislative Trends."
• The requirement by the employer to sign non-disclosure agreement if labor relations already exist is a change in the essential working conditions.
• A person’s refusal from providing a written consent to collect information about himself cannot be a ground for refusing employment.
• Nighttime work is remunerated 30 percent more.
• The introduction of the concept of traveling work and workers working on field basis, additional guarantees that must be provided by the employer are determined as well.
• The employee’s movement associated not with a change in location, but with a change in the conditions of transport accessibility (availability of public transport and the usual expenses for this area for travel from the place of residence to the place of work).
• Increase in the duration of leave up to 28 calendar days.
• Increase in father's social paid leave by 14 calendar days in connection with the birth of a child.

Despite a significant number of new and relevant provisions, the draft Labor Code partially worsens the situation of employers. In terms of blocking the decision to change the essential working conditions due to the refusal of the employee of the social category from such changes. The bill introduced a provision on changing the essential working conditions as redundancy, which, according to the logic of the regulatory act, is the termination of the employment contract at the initiative of the employer. However, the draft Labor Code prohibits the termination of the employment contract at the initiative of the employer for social categories of workers.

Thus, the new draft, despite the emergence of a large number of innovations, does not solve the existing problems in the relations between employers and employees. We hope for an alternative draft codified act, the preparation of which was announced in early autumn by representatives of the parliamentary majority. We will continue to keep you updated on current changes and projects in this area.