Well established Labor Law - Collective Agreements

Each company that has employed labor (even a single employee) must have a Collective Agreement. At the newly created company the Collective Agreement is concluded within three month after company registration should either employees or employer initiate negotiations on signing Collective Agreement.

A Collective Agreement is concluded to harmonize employer and employees relationships in order to prevent tensions and conflicts. It is a written agreement between the owner or his authorized representative and the company trade union that acts as a representative of the company employees. The employer must accept conclusion of Collective Agreement upon employees’ demand.  If Collective Agreement is concluded, it will be binding for all company’s employees.

40 hour working week

There is 40 hours working week in Ukraine. Working time structure may be regular (for example, from 9 a.m. to 6 p.m.) or irregular (for example, an employee works 6 hours one day, then 10 hours another day). According to Ukrainian legislation overtime work can be introduced only in cases of emergency. Overtime work is limited to not more than 4 hours per two days consequently and not more than 120 hours per year. However, it differs in practice.

All hours worked, which exceed 40 hours a week limit are considered overtime work and should be double paid.

Both full-time and part-time employees are eligible for annual paid vacations. An employee is entitled to 24 calendar days of annual vacation after 12 consecutive months of employment.

Minimum salary

Minimum salary is established by law. Employee’s salary cannot be lower than the established minimum.  Salary must be paid in Ukrainian currency twice per month in equal parts. Overtime and work in weekends and official holidays is to be paid at double rates.

Regulated Lay-offs

According to the Labor Code of Ukraine a labor agreement may be ceased by:

consent of parties (employer and employee)

expiration of labour agreement if concluded for a definite period, except for cases when the employee proceeds working and none of the parties requires terminating the labour agreement

termination of a labour agreement by employer or employee unilaterally on the grounds foreseen by a law

specific provisions of labour contract

other reasons set by a law.

The employer may terminate a labor agreement unilaterally having one of the following reasons:

Restructuring, liquidation, bankruptcy or changing a company activity

Employee skills do not comply with position occupied or employees health conditions prevents sufficient performance

Repeated violations of work obligations determined in a labour agreement or in orders of the company

Absence from work more than three hours during working time

Absence from work more than 4 months in a row due to temporary disability (not taking into account pregnancy vacation)

Presence at work in the state of alcoholic intoxication

Committing theft at the work place by the employee.

To lay-off an employee on the basis of reasons 2-6 the employer needs to get approval of company trade union (if created in the UA-Company).

According to laws of Ukraine employee cannot be layed-off while being in any type of leave. Additionally, pregnant women and women with child up to three years cannot be fired by employer’s initiative unless full liquidation of employing company.

Trade Unions

According to laws of Ukraine, trade unions are voluntary organizations of employees and may be created in any company irrespective of the quantity of people hired. Therefore, it is upon employees to decide on creation of trade union in the UA-Company.

In case of firing an employee on the basis of reason 1 the employer is obliged to inform the latter 2 months in advance. For other above stated reasons such notice should be also done by employer prior to the termination of labor agreement, but there is no specific term set.

Employee may terminate labor agreement concluded for indefinite period of time with two weeks notice. This provision means that if an employee from any reason wants to leave the company he is obliged to make a notice to the employer 2 weeks in advance. The term of 2 weeks is applied on in case when an employee wants to terminate labor agreement. It is not used for the employer.