Legislative initiative of introducing additional protection of right to a salary

According to the State Service of Statistics as of March 1st, 2019, salary arrears to employees are UAH 2,446,768,000, with almost a third part thereof being owed by enterprises going through solvency recovery procedure or bankruptcy declaration.

The Ministry of Social Policy believes that one of efficient ways to solve this problem is to enshrine in legislation conditions for additional protection of employees to timely salary.

The draft Law of Ukraine “On Amending Some Legislative Acts of Ukraine on Reinforcement of Employees’ Rights to Timely Salary” has been developed with this view. The draft law prescribes to entitle employees with the following rights:

• To stop work and be absent from workplace for the whole period of salary delay if such delay exceeds 15 calendar days;
• To obtain compensation from the employer of at least two-thirds of salary proportionally to work stoppage period;
• To assignment of right to demand salary in case of employer’s insolvency from the State Labour Service;
• To obtain penalty in the amount of 0.06% from amounts in arrears for each day of delay in case such delay exceeds 15 calendar days;
• To obtain compensation in the amount not exceeding three average monthly wages determined for the last 12 months, and 20 minimum wages as of January 1st of the corresponding year, after entering claims to the debtor to the creditors’ claim register.

If the majority of the mentioned rights related to pecuniary compensation do not raise special questions and are quite logical measures aimed at restoring violated rights of employees, the right to stop work due to its ability, if applied, to create adverse consequences for employer must be described more in detail.

Thus, for implementation of this right it is necessary to inform the employer in writing two days before. However, consequences of failure to inform so or employer’s refusal from receiving such a notice are not described. The condition of work restoration under which employee continues performing his duties after employer pays salary and informs the employee thereof in writing remains unclear.

Based on the draft norm, employee can abuse the right to be absent from the workplace during salary delay period since in this case written notification must be served by post, where period from the moment of paying salary debt till the moment of getting the letter-notification can be quite long considering that the employee may not receive such a letter by post at once.

We consider that regardless of the quite important guarantees this draft law offers to introduce, it requires quite attentive review as concerns giving details of some procedures, in particular, the procedure for implementation of the right to stop work.

As of this publication date the draft law is on discussion by April 26th, 2019 upon which further conclusions to work on it will be made.

Legal Alliance team will track further work on this draft law and keep you updated on the changes.

Contact the authors: Illia Kistin, partner, kostin@l-a.com.ua; Yaroslav Furyaka, Junior Associate, furyaka@l-a.com.ua