On 23 August 2016, the Cabinet of Ministers of Ukraine, the Federation of Employers of Ukraine (FEU) and the Federation of Trade Unions of Ukraine (FTUU) signed the first ever general bargaining agreement regulating social and labour relations in Ukraine for 2016-2017 (the “Agreement”). 

The negotiation of the Agreement between the Ukrainian state, 95 Ukrainian trade unions and 93 organizations of employers and their associations lasted for more than four years and resulted in compromise arrangements aimed at maintaining a strong labour environment, producing competitive products and paying fair salaries to employees.  

The Agreement’s main economic arrangements include the following: to develop the domestic market, to support national producers, to provide financial support to the real economy and to solve the issues related to tax overpayments and underpayments. 

The social policy section of the Agreement is aimed at increasing minimum and average salaries, the social protection of employees and enhancing labour protection standards. The FTUU is expecting a 20% increase in the actual minimum salaries as a result of the Agreement. 

The Agreement became immediately effective as of the date of its signing. All of its terms have to be implemented by the end of 2017. 

Any and all employers doing business in Ukraine are required to comply with the terms of the Agreement in their daily activities. The standard of their employment policies must not fall below those set out in the Agreement. That principle shall apply irrespective of whether such employers have entered into collective bargaining agreements with the labour collectives or trade unions operating at their companies or not. 

As a result of the Agreement having been signed, one expects that employer-employee relations in Ukraine will become more transparent and predictable and that the employment market in Ukraine will generally become more civilized. 

Legislation: A General Agreement Regulating the Key Principles and Standards for Implementing the Social and Economic Policy and Labour Relations in Ukraine for 2016-2017 dated 23 August 2016.