Navigating employment termination in Ukraine requires a thorough understanding of the country's labor code, which provides specific regulations designed to protect both employers and employees. The process involves strict adherence to notice periods, proper calculation and payment of severance, and following precise procedural steps depending on the grounds for termination. Employers must be diligent to avoid potential legal challenges and ensure compliance with all statutory requirements.
Understanding the legal framework is crucial for any company operating in Ukraine, whether employing local staff directly or through an Employer of Record. The rules governing dismissal are detailed and failure to comply can lead to significant liabilities, including reinstatement of the employee and payment of back wages. Therefore, a clear grasp of the lawful grounds, required procedures, and employee rights is essential for managing workforce changes effectively and compliantly.
Notice Period Requirements
Ukrainian labor law specifies minimum notice periods for termination, primarily depending on the grounds for dismissal. These periods are designed to provide employees with time to seek new employment.
| Grounds for Termination | Minimum Notice Period |
|---|---|
| Termination initiated by the employee (resignation) | Two weeks |
| Termination initiated by the employer due to redundancy, reorganization, or liquidation | Two months |
| Termination initiated by the employer due to employee's failure to meet performance standards or health issues preventing work | Two weeks |
| Termination during the probationary period | Not applicable (can be terminated with three days' notice) |
| Termination by mutual agreement | As agreed by parties |
It is important to note that collective agreements or individual employment contracts may stipulate longer notice periods than the statutory minimums, but they cannot reduce the minimums set by law.
Severance Pay
Severance pay entitlements in Ukraine depend on the specific grounds for termination. Not all types of termination trigger a severance payment.
Severance pay is typically required in cases of:
- Redundancy, reorganization, or liquidation of the employer.
- Employee's refusal to relocate with the employer or refusal to continue working due to significant changes in working conditions.
- Employee's health condition preventing them from continuing their work, if no alternative position is available.
- Reinstatement of an employee who previously held the position.
The standard severance pay calculation is based on the employee's average monthly salary. The minimum severance payment is typically one month's average salary. However, collective agreements or internal company regulations may provide for higher severance amounts.
Calculation of average salary for severance purposes follows specific rules outlined in Ukrainian legislation, generally based on the payments received by the employee over the last two calendar months preceding the month of termination.
Grounds for Termination
Ukrainian law provides an exhaustive list of legal grounds for terminating an employment contract. These can broadly be categorized as initiated by the employee, initiated by the employer (with or without cause), or other circumstances.
Termination Initiated by the Employee:
- Resignation (with two weeks' notice, or without notice for valid reasons like inability to continue work, employer's breach of labor law, etc.).
Termination Initiated by the Employer (With Cause):
These grounds relate to the employee's conduct or performance:
- Systematic failure to perform duties without valid reason, if disciplinary measures have been applied previously.
- Absenteeism (including absence from work for more than three hours during the working day without valid reason).
- Appearing at work in a state of alcoholic, narcotic, or toxic intoxication.
- Theft of employer's property.
- Gross violation of labor duties by an employee holding a position requiring full material responsibility.
- Actions of an employee directly serving monetary or commodity values, if these actions lead to loss of trust by the employer.
- Immoral misconduct by an employee performing educational functions, incompatible with the continuation of this work.
Termination Initiated by the Employer (Without Cause):
These grounds are typically related to the employer's operational needs or external circumstances:
- Changes in the organization of production and labor, including liquidation, reorganization, bankruptcy, or redundancy.
- Employee's failure to meet performance standards or health condition preventing continuation of work, if no alternative position is available.
Other Grounds:
- Mutual agreement of the parties.
- Expiration of the contract term (for fixed-term contracts).
- Transfer of the employee to another enterprise with their consent.
- Refusal of the employee to transfer to work in another locality together with the enterprise.
- Refusal of the employee to continue working due to changes in essential working conditions.
- Entry into legal force of a court verdict preventing the employee from continuing work.
Procedural Requirements for Lawful Termination
Strict adherence to procedural requirements is critical for a lawful termination in Ukraine. The specific steps vary depending on the grounds for dismissal.
General procedural steps often include:
- Documentation of Grounds: Gathering evidence and preparing necessary documents to support the chosen ground for termination (e.g., performance reviews, disciplinary act, medical certificate, redundancy plan).
- Issuance of Notice: Providing the employee with written notice of termination within the legally required timeframe.
- Consultation (if applicable): For certain grounds (like redundancy), consultation with the trade union (if one exists and the employee is a member) is mandatory. The employer must obtain the trade union's consent for dismissal.
- Issuance of Termination Order: Preparing a formal order ( приказом про звільнення) specifying the grounds for termination according to the Labor Code.
- Final Settlement: Calculating and paying all amounts due to the employee on their last day of employment, including wages, compensation for unused vacation days, and severance pay (if applicable).
- Issuance of Work Record Book: Making the relevant entry in the employee's work record book (трудова книжка) and returning it to the employee on the day of dismissal.
- Issuance of Copy of Order: Providing the employee with a copy of the termination order upon request.
Failure to follow these steps precisely can render the termination unlawful, even if the grounds for dismissal were valid.
Employee Protections Against Wrongful Dismissal
Ukrainian labor law provides significant protections to employees against unfair or unlawful dismissal.
Key protections include:
- Limited Grounds: An employer can only terminate employment based on the specific grounds listed in the Labor Code. Termination for reasons not stipulated by law is illegal.
- Procedural Compliance: As noted, strict adherence to the required procedures is mandatory. Any procedural error can invalidate the dismissal.
- Protection for Vulnerable Categories: Certain categories of employees receive enhanced protection, such as pregnant women, employees on maternity or parental leave, and employees who are temporarily incapacitated (on sick leave). Dismissal of these employees is generally prohibited, except in cases of complete liquidation of the employer.
- Trade Union Consent: For employees who are members of a trade union, obtaining the union's consent is often required before dismissal on certain grounds.
- Right to Challenge: Employees have the right to challenge their dismissal in court within a specific timeframe (usually one month from receiving the copy of the termination order or the work record book).
- Consequences of Wrongful Dismissal: If a court finds a dismissal to be unlawful, the employee must be reinstated to their previous position, and the employer is liable for paying the employee their average salary for the entire period of forced absence. The employer may also be required to compensate the employee for moral damages.
Understanding and respecting these protections is vital for employers to ensure compliant and legally sound termination processes in Ukraine.
