Martial Law in Ukraine

On February 24, 2022, Ukrainians were awoken early in the morning by explosions. I had been a practicing corporate/M&A as well as labor and employment attorney in Kyiv until shortly before the invasion. I was able to leave the country with my children, but my husband remained behind to assist in the defense of the country, as required by law. Prior to the invasion, he worked as an engineer in renewable energy projects and is not a trained soldier.

The unprecedented attack of the Russian Federation on Ukraine has caused drastic changes for both employers and employees. The Ukrainian labour legislation was not prepared for such developments. Nobody was.

On the same day as the invasion, the President of Ukraine declared martial law throughout Ukraine by decree, which was approved by the Parliament and entered into force on the same day. Martial law included among other things restrictions of the constitutional rights and freedoms of humans and citizens (Art. 43, 44 of the Constitution of Ukraine). It is the second time in Ukrainian history that martial law was declared. The first took place in 2018, also due to Russian hostilities. However, though it was clear for both employers and employees that employment relations will not stay intact, it took the Parliament three more weeks to adjust the labor legislation to recognize martial law.

Work during martial law in Ukraine

On March 15, 2022, the Parliament of Ukraine adopted the Law of Ukraine “On Organizing Labour Relations under Martial Law” (came into effect on March 24, 2022), which clarified relevant restrictions of the constitutional rights and freedoms and set out special rules applicable to labor relations to replace the “normal” rules of the Labour Code of Ukraine.

Generally, all changes are more favourable for employers rather than employees, considering the circumstances when most businesses are on the verge of collapse. The primary changes may be summarized as follows:

Entering into employment agreements

• The parties may choose any form of the employment agreement (either oral or written), as agreed between them. Prior to martial law, written agreements were obligatory in certain cases.
• A probationary period can be imposed for all employees. Previously, probationary periods were not possible for some categories of workers such as temporarily displaced persons, pregnant women, fixed-term employment agreements up to 12 months, etc.
• Employers may enter into fixed-term employment agreements with new employees for the duration of martial law or the period of replacement of a temporarily absent employee. Open-ended agreements had priority previously, whereas the conclusion of fixed-term agreements was allowed only in certain limited cases.

Change of working conditions

• Employers have the right to transfer their employees to another job without the latter’s consent (with some exceptions).
• A two-month notice period, which was the general rule for “peaceful times” does not apply when essential working conditions change within the period of martial law.

New working regime

• Normal working hours cannot exceed 60 hours/week for full time employees and 50 hours/week for part time employees. Previously, the usual 40 hours/week and 36/24 hours/week respectively. No premium is owed for overtime work.
• The beginning and end of daily work (shift) shall be determined by the employer only. Previously trade unions and employees’ representatives were to be involved in setting the shift start and end times.Holidays and days off are cancelled during the martial law, along with related provisions such as reduced duration of work on the eve of holidays, days off and shifting of the days off.
• Categories of employees enjoying certain restrictions in peacetime may be involved in certain types of work now. For example, women with children may be involved in heavy work or work at night with their consent.
• The paid annual leave may not exceed 24 days per year. Employers may refuse to grant any leave to critical infrastructure employees (except pregnancy and maternity leaves). It is allowed to grant unpaid leave for the entire wartime if requested by the employee.

Remuneration

• Though the law doesn’t generally allow employers to stop salary payments without a legal basis, no sanctions will be applied to employers who violate payment terms (e.g. late payment) if the delay is caused by the invasion and related hostilities.

Termination and suspension of labour relations

• In connection with hostilities in the area of the employer’s location, employees may terminate employment agreements on their own without a two-week notice period, with some exceptions.
• Trade union’s consent to dismissal of employees is not required anymore, except for dismissal of members of the trade union’s management.
• The parties have the right to suspend the employment agreement. This is a new mechanism that requires further clarifications. It is generally understood that this option is possible only when both criteria are met: the employer doesn’t have any work for the employee, and the employee can’t perform any job duties due to military aggression. No payments to employees are made. Salary compensation, guarantees and compensation payments to employees for the suspension period are fully imposed on the state carrying out military aggression (Russian Federation). It is expected that such a mechanism will be further elaborated in the future.

Collective bargaining and collective bargaining agreements

• Certain provisions of the collective bargaining agreement may be suspended by the employer. However, those duplicating the statutory rules will of course remain intact.
• For the period of martial law, the effect of Art. 44 of the Law of Ukraine “On Trade Unions, their Rights and Activity Guarantees” (payment by the employer of at least 0.3% of the payroll for cultural, sport and recreational work) and the relevant provisions of collective bargaining agreements shall be temporarily suspended

Mobilization of employees

On March 3, 2022, the Parliament also approved the Decree of the President of Ukraine of February 24, 2022, on general mobilization.

In Ukraine, employers must comply with legislative guarantees for employees for the duration of their duties related to admission to military service (e.g. conscription, military service under a contract, medical examination, military trainings etc.). In all of these cases the employers must retain their place of work, job position and average earnings. These costs are not covered by the state.

Given the circumstances, the employee may fail to provide supporting documents on conscription/entry into military service on time. Usually, it is recommended not to dismiss the employee for absence at work but to wait until the documents are provided, allowing the employee time to properly formalize the grounds for absence.

The guarantees regarding retaining of workplace and payment of average earnings shall also be valid for employees who have joined the ranks of territorial defense. To be granted such guarantees, the employee must present a territorial defence volunteer contract to the employer.

Challenges for local and international employers

Most employers immediately started the relocation of personnel after the start of the war, be it internal relocation (to the western part of Ukraine) or abroad. However, this was and still is not an easy process, given the rapid developments and various personal circumstances of employees. Unfortunately, the western regions of Ukraine also are not safe, as Russia’s recent missile attacks have demonstrated. Moreover, many companies are involved in production activities and have production sites that cannot be relocated. Thus, every situation is indeed unique, whereas much depends on the company’s activity in Ukraine, the character of work the employee is performing, professional and language skills, experience and personal circumstances. At that, Ukrainian men aged between 18–60 may not leave the country (with some exceptions), as they can potentially be mobilized to the armed forces. Moreover, some employees voluntarily enroll in the army. Overall, this leads to uncertainty for management and HR, who are unable to precisely calculate their personnel needs and payroll costs.

Generally, employers choose among the following solutions, if ordinary working processes are interrupted due to hostilities:

• Transfer of personnel to remote/home-based work (for the period of the threat of armed aggression) or hybrid working models;
• Decrease of salary and/or transfer to part-time (change of essential working conditions);
• Transfer to another job or relocation to the relatively safe regions in Ukraine;
• Relocation abroad, which is a popular option with multinational employers.

As far as there is no formal transfer process (transborder transfers are not regulated in Ukraine) in practice, the employees are dismissed in Ukraine and re-employed by a foreign legal entity;

• Granting leaves (paid or unpaid);
• Declaring downtime (with payment of at least 2/3 of the salary under the law); and
• Suspension of the labor agreements under the newly adopted legislation

It is generally not recommended to dismiss employees for no-show at work, as under the circumstances such absence could probably have a justifiable cause (hostilities in the region, mobilization etc.).

Thus, at the moment Ukrainian employment lawyers have to face challenges that would have seemed surreal just several months ago. However, both employers and employees are gradually adjusting to the new rules and looking for new opportunities even in times of crisis.