Labour Code and Aliens Act
The Ukrainian labor law differs considerably from the German labor law and plays a major role for any business as a key component regulating internal relationships between the personnel and the management in any company. The Ukrainian labor law includes a large number of diverse legal acts and regulations and it is crucial to comply with them to ensure proper management of the company and its day-to-day operations. Of particular importance are: the applicable laws and regulations on labor safety, respect of employee rights and payroll accounting.
Field inspections of companies by the State Compliance Supervision Department within the Labour Ministry of Ukraine have become a frequent occasion; unfortunately such inspections detect a large number of non-compliances with labor law and typically result in the application of administrative sanctions and penalties to the employer and its senior managers.
Labor law and HR documentation requirements prescribe quite many formalities in Ukraine. A hire, dismissal, promotion or application of sanctions to an employee (by the way the CEO is also an employee under the Ukrainian law) involves rather complicated bureaucratic procedures regulated to the tiniest detail, and any non-compliance with such procedures produces quite often a negative effect for the employer, such as e.g. a reversal of the dismissal order by the court decision followed by the reinstatement of the relevant employee in office and a ruling to pay such an employee considerable indemnification. Therefore the applicable Ukrainian labor law makes it impossible to get rid of a problematic employee by way of “just writing a dismissal order of several lines”; the existence of the mandatory internal regulations, guidelines and employment record (aka ‘labor book’) maintenance rules as well as the necessity to comply with many other formal requirements is a key pre-requisite for an employer who wants assurance and security from the negative after-effects of a labor dispute.
The collective labor law that has lost some of its importance during the transit 1990’s is re-establishing itself and quite many foreign investors are already aware only too well of the negative consequences caused by a neglect to comply with the collective bargaining agreement and a strike .
The Ukrainian labor law applies to everyone – foreigners and stateless persons included – who work for a fee in Belarus, whereby preferential nation treatment is presumed in case of foreigners. However it can be extremely complicated to send an expat employee to work in Ukraine in view of the necessity to obtain multiple approvals and permits entitling a foreigner to work in Ukraine and to solve a number of issues regarding in particular the expat employee’s status in terms of the social security law and his/her taxpayer status in the country of permanent residence.
The Ukrainian laws and regulations on the use of expat labor and on the employment of foreigners in Ukraine provide for a very complicated system; quite an impressive package of documents has to be filed with the authorities to apply for a mandatory work permit; the procedure involves multiple tricky details that must be taken into consideration, such as the requirement to attach translations into the state language to all foreign documents, to have those documents properly authenticated by the relevant authority, etc. Furthermore the provisions of Ukraine’s international treaties in the respective sphere find application as well. A decision to refuse the issuance of a work permit can be challenged in court. However this procedures is rather lengthy, complex and highly bureaucratized.
The skilled legal counsels in our Kiev Office offer you detailed advice on any aspects of practical application of the Ukrainian labor and migration law and Rödl & Partner HQ in Nuremberg offers the advisory support of a specialized legal team focused on the advisory to so-called expats - i.e. foreigners dispatched by their principal employers to work in Ukraine.