Labour Relations in the Wartime Will Be Regulated in a New Way

On 15 March 2022, the Parliament of Ukraine adopted Draft Law #7160 "On Arrangement of Labour Relations under Martial Law" (the Law). At the moment, the Law is expected to be signed by the President.

The Law provides more opportunities for employers to promptly respond to challenges during the war and introduces the following key amendments to the instruments governing employer-employee relations:

• Form of Employment Agreement: the written form is no longer required in cases set forth in the Labour Code.
• Probation: when an employment agreement is concluded, a probation period may be set for any category of employees without the restrictions referred to in Part 3, Article 26 of the Labour Code.
• Replacement of Absent Employees: employers may enter into fixed-term employment agreements with new employees for the period over which the war continues or a temporarily absent employee is replaced.
• Transfer to another job: while the martial law remains in effect, an employer is entitled to transfer an employee to another job (position) not covered by the employment agreement without his/her consent (however an employee may not be relocated to the other area where active hostilities continue):
  - if such duties are not medically contraindicated for the employee;
  - with no other purpose other than to prevent or eliminate consequences of hostilities or other circumstances that endanger or may endanger lives or normal living conditions of people
  - with the renumeration not less than the average salary for the performance of their previous duties
• Change of Essential Terms of Employment: an employer may change essential terms of employment due to changes in arranging operations and labour without giving a 2-month prior notice to the employee. Should the employee disagree with such changes, he/she may be dismissed by virtue of Clause 6, Part 1, Article 36 of the Labour Code.
• Resignation: an employee may terminate the employment agreement on his/her own initiative without giving a 2-week prior notice to the employer if the area where the enterprise is located is under attack, and the employee's life and health are endangered.
• Dismissal Caused by Company Liquidation: an employer may terminate an employment agreement with an employee due to the liquidation of the enterprise, institution, organization caused by the destruction of all productive, organizational and technical capacities or the enterprise's properties in the military attack given that it gives a 10-day prior notice and the severance pay to the employee which may not be less than the employee's average monthly salary.
• Dismissal during Temporary Incapacity or Vacation: an employee may be dismissed when on sick leave or vacation (except when a woman is on pregnancy or maternity leave), and the dismissal date will be the first working day following the temporary incapacity end date specified in the document proving temporary incapacity or the first working day after the vacation.
• Working Hours and Leisure Time: while martial law remains in effect, normal working hours of employees may not exceed 60 hours per week (50 hours for the employees with fewer working hours as set forth by law). The time when an employee should start and finish his/her daily work (shift) is determined by their employer, and the duration of weekly uninterrupted leisure time may be reduced up to 24 hours.
  During the period while the martial law remains in force, working hours on the day before holidays, days-off and weekends are not reduced, and overtime thresholds, regulations on "no work on holidays, days-off and weekends" as well as on the shift of holidays and weekends do not apply.
• Leaves: the duration of an annual basic paid leave provided to employees is 24 calendar days. While the martial law remains in force, an employer may deny the employee's request for any type of leave except for pregnancy and maternity leave, if such an employee is engaged in operations of critical infrastructure facilities.
  Upon the employee's request, the leave without pay may be provided for an unlimited period.
• Employment of Women and Disabled People: women (except for those who are pregnant or breastfeed a child under the age of one) may be engaged to perform hard work or work presupposing harmful or dangerous working conditions, and underground work. Pregnant women, women with children under the age of one, disabled people who have respective medical contraindications may not be engaged to perform works at night, unless absolutely necessary.
• Possibility to Suspend the Payment of Salaries: if an enterprise is unable to pay salaries due to armed hostilities, such payments may be suspended until it recuperates to perform its main activities.
• Partial Termination of Collective Bargaining Agreement: certain provisions of the collective agreement may be suspended on the employer's initiative for the period while the martial law remains in effect.
• Suspension of Employment Agreement: an employment agreement may be suspended for the reason of armed hostilities against Ukraine which make an employee unable to perform their work. Suspension means the temporary release of an employer from its obligation to provide the employee with work and the temporary release of an employee from its obligation to perform work under the employment agreement which does not result in the termination of employer-employee relations.
  The Law says that salaries, guaranteed amounts, and compensations to employees for the period, while their employment agreements are suspended, must be reimbursed by the aggressor state. However, the Law does not contain the procedure for such suspension, providing related guarantees to employees and the mechanism for recovering the employee's losses.
• Trade Unions: while the martial law remains in force, the consent of the trade union is not required to terminate an employment agreement on the employer's initiative. This rule does not apply to cases when the employees elected to trade union bodies are dismissed. Employers are also released from their obligation to pay contributions to trade unions.

The Law stipulates that the provisions of labour laws governing the relations regulated by the Law do not apply while the martial law remains in force.

The Law shall enter into force on the day following its publication date.

We draw your attention to the fact that the text of the Law has not been signed and published as of today, and therefore, the final version may differ slightly.

Authors:
Illya Tkachuk, Partner, Head of Corporate and M&A, Labour Law, Compliance
Inna Kostrytska, Attorney, Senior Associate in Corporate and M&A, Labour Law