In the process of working on clients' projects in the scope of labour law, the team of Legal Alliance Company repeatedly met the practice of applying foreign currency to determine the wages of workers in Ukraine. The use of this calculation method derived logically from the provisions of the Civil Code of Ukraine. The right to use foreign currency was conditionally confirmed by the absence of substantiated claims on behalf of the supervisory authorities.
Mostly, disputes on this issue arose between the employee and the employer regarding the legality of the application of a particular course, as well as the need to comply with the procedure for notification of changes in essential working conditions when establishing such a rule for determining wages.
The Supreme Court finally resolved this issue on June 26, 2019. Being a part of the Civil Court of Cassation, it issued a ruling confirming the legality of determining the wages of employees in foreign currency with their subsequent payment in equivalent of national currency.
In its decision, the Court referred to the fact that the employee has the right to receive remuneration (wages) for his work done in currency that are legal tender and must be accepted throughout Ukraine. This currency is hryvnia, so the employer's monetary obligation to pay salaries can be determined with its help.
At the same time, the employer and the employee are entitled to determine the amount of the monetary obligation, which is wages in equivalent to foreign currency. The labour legislation does not contain separate prohibition on the use of foreign currency for payroll.
For all questions regarding this topic, please contact:
Illya Kostin, attorney-at-law, partner at Legal Alliance Company, kostin@l-a.com.ua;
Yaroslav Furyaka, associate at Legal Alliance Company, furiaka@l-a.com.ua.
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