All questions

Discontinuing employment

i Dismissal

Termination of an employment agreement at the employer's initiative is difficult and the employee cannot be dismissed without cause. The employer may dismiss an employee in the following limited cases provided in the Labour Code:

  1. changes in the company's activities, including its liquidation or reorganisation, bankruptcy, changes in its business, or reduction of its staff. In this case the employer must notify the relevant government authorities about the pending dismissal of its employees two months in advance and provide each affected employee with a two-month dismissal notice, which cannot be replaced with a payment, as discussed in subsection ii, below. The consent of the company's trade union is required for the dismissal of each member employee subject to dismissal on this ground (except for the company liquidation);
  2. non-compliance by an employee with his or her position owing to inadequate qualification or a health condition interfering with the ability to perform employment duties;
  3. systematic failure by an employee to fulfil his or her employment duties if disciplinary actions were previously taken against him or her;
  4. failure by the employee to appear at work for more than three consecutive hours in one working day without a good reason for such absence;
  5. failure to appear at work for more than four consecutive months owing to a temporary incapacity to work unless a longer term is permitted by law for certain diseases and unless such incapacity was caused by work-related illness or severe injury;
  6. if an employee came to his or her workplace drunk or in a narcotic-induced or intoxicated state;
  7. resumption of work of another employee who was previously occupying this position;
  8. if an employee was found guilty of larceny of his or her employer's property;
  9. if an individual owner has been called up for the military service or mobilised during a special period; and
  10. establishment during the probationary period of non-compliance by an employee with his or her position or work performed by him or her.

The trade union's consent is required for dismissal of the trade union member employee on the grounds in points (a) to (f), above.

Some employees can be dismissed on the following additional grounds stipulated in the Labour Code:

  1. gross violation of employment obligations by a director of the company or its branch, or his or her deputy, chief accountant, his or her deputy and some state officials;
  2. deliberate action of a company director that results in untimely salary payment or payment of a salary that falls below the statutory minimum salary;
  3. purposeful actions of an employee managing funds or commodities if such action results in the loss of trust in such employee;
  4. immoral misconduct of the employee performing pedagogical functions that prevents such employee from further holding this position;
  5. working under direct supervision of the close person in the meaning of the Anti-Corruption Law; and
  6. termination of the authorities of a company officer.

The trade union's consent is required for dismissal of the trade union member employee on grounds (c) and (d) above.

It is prohibited to dismiss:

  1. employees during their sick leave or vacation (if initiated by the employer);
  2. pregnant women, women with children under three, single mothers with children under 14 or a disabled child, except in the event of:
    • company liquidation; or
    • the expiry of a fixed-term employment agreement or contract for the relevant employee;
  3. employees on the sole basis of reaching retirement age; or
  4. trade union member employees without obtaining prior trade union consent (in most cases).

On the dismissal date, the employer provides the employee with his or her labour book and dismissal order, and settles all payments due to this employee.

When an employee is dismissed because of redundancy or other changes in the company's activities, an employee's non-compliance with his or her position, or the resumption of work of another employee, he or she is entitled to one average monthly salary as a severance payment. The Labour Code also establishes a severance pay due to company officers dismissed because of the termination of their authorities in the amount of their six-monthly average salaries.

Employees subject to dismissal on any grounds provided by Ukrainian law are entitled to receive compensation for unused vacation. The employer shall also pay to an employee any additional compensation or benefits that may be specified in a written employment agreement or contract with this employee and the collective bargaining agreement.

The law does not prohibit the employer and the employee from concluding a settlement agreement. To be enforceable, however, the provisions of this agreement must not worsen the employee's position as compared with Ukrainian labour law.

ii Redundancies

Under the Labour Code, an employer may unilaterally initiate the dismissal of its employees because of redundancy. In such a case, the employer must notify all its employees of their pending dismissal no later than two months before their dismissal. This notice cannot be replaced with a payment.

Under the Labour Code, employees with higher productivity levels or qualifications are given priority to stay when dismissals are carried out because of redundancy or other changes in the company (except in the event of company liquidation).

Between employees with equal qualifications and productivity levels, priority is given based on various criteria, including preference for an employee who is the only working person in a family, who has long-term experience working at the company, who was disabled during work at the company or developed a work-related disease or who has three years left before reaching the pension age.

The Labour Code also entitles employees dismissed because of redundancy or other changes in the company (except for the company liquidation) to be rehired by the employer within one year of their dismissal if the employer has vacancies for employees with similar qualifications. During the rehiring, priority is given to the above-mentioned categories of persons prioritised for retention during redundancy.

Redundancy can be performed only after prior trade union consent (for member employees). The trade union shall consider the employer's reasonable written redundancy petition within 15 days, in the presence of each employee to be dismissed. The trade union must notify the employer in writing of the adopted decision within three days. If this deadline is not met, it is considered that the trade union has agreed with the dismissal of all proposed employees.

Employees subject to redundancy have to be considered for employment in other available positions.

The State Employment Centre must be provided with at least two months' prior notice of the prospective mass lay-off, stating the grounds for the pending dismissal of the company's employees and the positions, qualifications and salary of each employee.

The categories of employees protected from dismissal, severance and other dismissal payments, and the possibility of the parties to enter into a settlement agreement are discussed in subsection i, above and apply equally to redundancies.