Dismissed employee's final claims in the event of delayed full and final settlement must be determined on the actual payment date.1
The employer failed to make the full and final settlement on the employee's last working day at the organization. The court of cassation maintained that after the court ordered the recovery of any outstanding employee compensation, Article 117 of the Labor Code of Ukraine (the "Labor Code") is not applicable to the matter in dispute. The Supreme Court of Ukraine (the "Supreme Court") concluded that the violation by the employer of the labor laws, namely Article 116 of the Labor Code, is a continuing violation, and therefore the departed employee may make a final determination of his/her claims under Article 117 of the Labor Code on the date when a violation ceases, which is the actual payment date.
Further, the Supreme Court, by its Order dated 29 January 2014, confirmed that the employer must not be discharged from liability after the court ordered the recovery of any outstanding employee compensation in accordance with Article 117 of the Labor Code.2 That means that the employer must settle the payments due to the employee, i.e. to pay his/her average salary for the period of delay up to and including the actual payment date.
Discharge for absence of an employee who is an elected member of a primary trade union organization is unlawful if no prior consent is obtained from the trade union.
The employer discharged the employee for an unexcused absence without a compelling reason not in compliance with the dismissal procedure (violation included reprimand after lapse of the limitation period and failure to obtain prior consent from the elected body of a primary trade union organization).
The Supreme Court concluded that the dismissal was wrongful due to the employer's failure to obtain consent from the elected body of the company's primary trade union organization of which the employee is a member, and from the superior elected body of such trade union, as required in Articles 43 and 252 of the Labor Code. Hence, the discharged employee must be reinstated.
The court must order the reinstatement of a person if dismissed during temporary disability.4
A chief executive officer who was receiving hospital treatment was discharged for misconduct constituting a serious single-instance breach of duty. The employer claimed that the discharge was for violating the order of the State Affairs Management Office regarding financial and statistics filings by the state-owned enterprises operated by the State Affairs Management Office. The employer served the employment a termination notice on the date when the employee returned to work.
The Supreme Court concluded that labor laws provide for events when employment may by terminated by the employer, but also guarantee enforcement of the employee's rights in the event of wrongful dismissal. This includes dismissals for absence due to temporary disability.
Temporary disability excludes the employee's performance of his or her duties and, as a result, is valid ground to discharge an employee for failure to perform them. Hence, the court must issue an order for such employee's reinstatement.
Dismissal of a company officer during the temporary disability period may be fair.5
A chief executive officer of a state-owned enterprise was dismissed for the company's failure to discharge its taxation liabilities owed to the pension fund, which is a dismissal event provided for in the employment contract. The officer claimed that the dismissal was in violation of the laws (under Article 40 of the Labor Code as he was on sick leave on the dismissal date).
The court concluded that Articles 40 and 41 of the Labor Code providing for the employment agreement termination events were not applicable to the matter in dispute, for in this case, the dismissal event was in addition to, and separate from, the statutory events, and was provided for in the employment contract. Further, the court determined that the claimant failed to notify the company of the commencement of his sick leave. Hence, issuing the order to dismiss the chief executive officer before a lapse of his employment contract and during the temporary disability period was fair.
Provisions of the Civil Code of Ukraine for delayed payment are not applicable to employment disputes.6
An employee brought action against his employer seeking recovery of his average salary adjusted for inflation plus interest at 3% per annum for the period of delay of full and final settlement due on the employee's last working day at the organization.
The Supreme Court concluded that the debtor's liability for delayed discharge of its monetary obligation under paragraph 2 of Article 625 of the Civil Code of Ukraine assumes the existence of contractual obligations, and applies to default under monetary obligation.
Hence, Article 625 of the Civil Code shall not apply to employment-related liability arising as a result of delayed final settlement in connection with employment termination and delayed salary payment, as such relations are governed by labor laws, and relevant provisions of the Labor Code are applicable to such employment-related liability.
Commencement of bankruptcy proceedings in respect of the employer must not relieve the employer from the obligation to make a full and final settlement upon an employee's termination.7
The employer failed to make the full and final settlement with an employee upon termination. The courts of lower instances concluded that the employer incurred no liability due to commencement of bankruptcy proceedings.
The Supreme Court concluded that commencement of bankruptcy proceedings in respect of the employer, long time execution of the proceedings by the executive service, disproportion between the amount of the company's debt representing outstanding compensation for unused annual leave owed to the person compared to the total amount of average salary for the period of delay of full and final settlement from the person's last working day up to and including the actual payment day are all not sufficient enough evidence to prove that the employer is not liable for the failure to pay all outstanding amounts due to the person, and must not relieve the employer from its obligation to pay such amount.
First signatory authority in respect of payroll statements and payment orders, and receipt of SMS confirmation that money was credited to the bank account contain no information on gross salary amounts as accrued.8
An operations director was discharged for misconduct constituting a serious single-instance breach of the employee's duty under paragraph 1 of Article 41 of the Labor Code. The employee brought a wrongful dismissal action seeking reinstatement, recovery of outstanding salary, average salary for the period of forced absence from work, and moral damages.
The court established that the dismissal was wrongful as the employee had no management duties at the company. Further, the amount of salary accrued and paid by the employer to the employee was less than the amount set forth in the employment agreement, meaning that the compensation was less favorable than agreed, and the employer failed to make the full and final settlement upon the claim asserted by the employee.
The court concluded that the signatory authority in respect of payroll statements and payment orders, and receipt of SMS confirmation that the money was credited to the bank account were not sufficient enough evidence to prove that the employee was aware that the amount of his salary was changed.
So called SMS confirmations only contain information on the amount of salary credited to the bank account, i.e. net salary after deduction and withholding of taxes and other amounts, and contain no information on gross salary amount as accrued. Hence, the employer failed to comply with the provisions of the Labor Code which require communicate the amounts of gross salary and any deduction or withholding to the employee.
Discharge for loss of trust is fair, if the employee directly involved in handling money or goods has acted willfully or as a result of negligence in a way giving to the employer the reasons for loss of trust.9
An employee was accused of missing inventories and as a result dismissed for loss of trust. The court established that dismissal for loss of trust is fair only if the employee directly involved in handling money or goods (including their acceptance, storage, transportation, assignment or otherwise) has acted willfully or as a result of negligence in a way giving to the owner or its authorized body the reasons for loss of trust. Such actions include, without limitation, violation of the rules for handling such inventories.