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UPDATES ON UKRAINE’S PROPOSED NEW LABOR CODE: ANALYSIS OF DRAFT LAWS №2410 AND №2410-1 

UPDATES ON UKRAINE’S PROPOSED NEW LABOR CODE: ANALYSIS OF DRAFT LAWS №2410 AND №2410-1 

On 08.11.2019 two draft Labor Codes (No.2410 and 2410-1) were registered in the Verkhovna Rada of Ukraine. The draft law № 2410  was registered by MP`s Korolevska, Larin, Bort, Kachniy, Solod, Kaltsev. The draft law № 2410-1 was registered by MP`s Timoshenko, Ivchenko, Shahov, Tsimbalyuk, Babenko.

Texts of both law drafts were initially the same. But the title of the draft 2410-1 was changed after submission into “Code of Ukraine on labor”. On November 12, its text was withdrawn and currently 2410-1 the text appeared on the Rada website only on 18.11.2019. 

According to Labor Initiatives lawyers, both drafts narrow the existing scope of employee`s and unions rights and don`t match with particular international obligations Ukraine has.

Drafts 2410 and 2410-1 have some positive provisions both with serious concerns.

 Among the positive amendments, LI lawyers consider the following:

1. Burden of proof in discrimination cases is shifted to an employer

2. Gender identity and sexual orientation were added as one of protected characteristics

3. Art.30 defines the concept of labor relations, as well as the criteria of labor relations. Thus, any work (service) will be situated within the framework of labor relations (regardless its name and type of contractual relations) if there are three or more of the following indicators:

> Reward is given to a person consistently and periodically (two or more times) for the performed work (rendered service) in the interests of another person

> This reward is the only source of income or constitutes 75 or more percent of income during 6 months

> Work is performed by a particular profession, qualification, on behalf and under control of an authorized person

> Work is performed or services are rendered in a particular workplace defined by an authorized person observing the Internal Regulations

> Performed work is similar to that executed by the ordinary employees

> Working time and rest time are established by an authorized person

Such a rule will help to tackle the problem of masking labor contracts as civil contracts. The drafts also explicitly tell that it is forbidden to conclude civil contract in cases where labor contract should be signed. Labor Initiatives lawyers also contributed to including of this rule into the text as they believe it is an effective instrument to decrease informal economy in Ukraine. 

3. Annual vacation is increased to 28 calendar days (Art.173). 

4. Art.382 of the draft release employees from all court fees in labor disputes. It is improvement of current situation when employees are released from paying court fees only in cases on reinstatement and wages recovery. According to the Labor Initiatives statistics employees who face different labor law violations offen can`t afford to pay court fee. Numerous times LI lawyers made their suggestions to amend the Law on court fee to the Verkhovna Rada of previous convocation to solve this problem.

5. Art.267 and 268 imposes more guarantees in case of wage arrears. In case of wage arrears for more than 7 calendar days an employee will be entitled to suspend work temporarily.  If an employer violates the terms of wage payment provided by law and CBA, he will be obliged to pay a compensation to an employee in the amount not less than the national discount rate. 

Labor Initiatives lawyers contributed to include this provision in the text and they believe that this provision is necessary in situation when employees often suffer from wage arrears. 

The 2410 and 2410-1 drafts of the Labor Codes still features numerous areas for concern, in the opinion of LI legal experts:

1. Art.35 of the draft laws allows to conclude fixed-term contracts in cases stipulated by laws or directly provided in a labor contract. Such wording “directly provided in a labor contract” may cause abuses from employers when they will force employees to sign labor contracts with a fixed time condition. Such clause opens up the list of situations allowing conclusion of fixed term contracts. ILO Recommendation 166 recommends to close the list of situations allowing conclusion of fixed term contracts by providing that contracts other than those on the list should be deemed contracts of indeterminate duration. Under the current legislation signing the fixed-term contract is allowed only in case when there is impossible to predict the long-term employment relationships taking into account the type of work or for the interest of employee.

As lawyers from the ILO and ITUC have mentioned previously the problem is that Art.58 allows for a broad prerogative to conclude fixed-term contracts. They also stated that provisions in points 7-13 do not comply with the requirement of justification of the recourse to fixed term contract by objective reasons (ILO Convention 158 + ILO Recommendation 166 Para 3(2)a) and EU Framework Agreement enforced by the Directive 1999/70, Clause 5). Such objective reasons must represent concrete circumstances characterizing the activity the worker is expected to perform, instead of a subjective employer preference or a sector-based or occupation-based prerogative to conclude fixed term contracts as a form of labour market policy.

2. Art.29 of the drafts allows the “technical control” over the fulfilling of employees` obligations – it may be video recording, installing app`s etc. The rules of technical control should be stipulated in a collective bargaining agreement; employer is not eligible to control the private conversations of employees in exception when xuch conversations violate the provisions of the internal regulations or local rules. But in practice such norm may lead to abuses and may violate the Art.32 of the Constitution of Ukraine that guarantees the right to protect person`s private life;

3. Art.92 defines truancy as one of the grounds for dismissal. But it explains truancy in the workplace as “absence it the workplace during the working day” – so in practice even 1 minute of absence may be considered as truancy, as the definition is deficient.

4. Art.110 of the drafts allows to dismiss elected union leaders on the common grounds provided in Art.92-96;

5. Art.362 of the drafts comparing to the current labor legislation has reducing amount of fines for informal employment – now it is amounted of 30 minimum wages and drafts propose amount of 10 minimum wages. Considering the problem of shadow economy and informal employment this reducing fines may put obstacles to tackle the issue.

6. Сomparing to the current Code of Labor laws proposed drafts do not contain the chapter of trade unions rights. Thus such provisions are left only in the special trade union law.

7. Art.294 of the draft allows women with children under 15 years or child with disability to be involved under their written consent to night and overtime work, work on weekends. Current labor legislation imposes an absolute prohibition to involve women with children under three years to overtime and night work.  

In addition to the above mentioned provisions, draft law 2410-1 contains the crucial differences from draft law 2410 in its first edition, specifically considering provisions on strike and lockout procedures: 

1. Article 338: in order to resolve a collective labor dispute or ensure the execution of a decision reached in the process of regulation (conciliation) of such a dispute, the parties of a collective labor dispute have the right to take the following collective actions: 

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– Trade unions or trade union organizations have the right to organize and conduct strikes and protest actions, in accordance with the procedure established by this Code; 

– Employers and employers’ organizations have the right to organize lockout.

Thus, the highly toxic notion of lockout is introduced on a legislative level in Ukraine, a provision that is especially negative with regards to trade unions and individual workers. As legal practice around the world has demonstrated, lockout can be considered as the most dangerous phenomenon for workers and the fulfillment of workers’ rights; implanting it into labor law may have catastrophic impact on the social and labor sphere in Ukraine. 

2. The definition of lockout is provided in Art. 350 of draft law 2410-1: Lockout is defined as the decision announced by an employer or an organization of employers to suspend the fulfillment of employment contracts of the striking employees of one or more employers, accompanied by the suspension of wage payments, and/or dismissal of employees, and applied as the final means in the fight against the violation of equality of parties in collective labor disputes. 

The given provision will, in practice, render impossible the collective actions of workers. 

3. Draft law 2410-1, in Part 2 of Article 352 in fact gives employers permission to employ strikebreakers: The employer has the right to fill the vacant job slots, under fixed-term employment contracts, by hiring new employees, employ temporary workers, or offer the given slots to other workers at the enterprise, institution, or organization, without violating the overtime/additional work stipulations prescribed by the given Code.

4. The provisions on peaceful assemblies that are included in draft law 2410-1 are highly unclear. Art. 339 of the project contains provision on “protest actions”: A protest action is an open declaration of disagreement by a party of a collective labor dispute, through action or omission, in order to influence the other party to resolve a collective labor dispute. Protest actions are conducted in the form of: meetings, rallies, demonstrations, marches, picketing, or any other form of peaceful assembly that does not violate the Constitution and laws of Ukraine. 

The regulation of peaceful assemblies is enshrined in Art. 39 of the Constitution of Ukraine. The right to freedom of peaceful assembly is a civil and political right and is enshrined in the articles of the Universal Declaration of Human Rights, the International Covenant on Civil and Political Rights, the European Convention for the Protection of Human Rights and Fundamental Freedoms. In turn, the right to strike is part of the social and economic rights enshrined in the International Covenant on Social, Economic and Cultural Rights, as well as the European Social Charter. Thus, conjoining two vastly different typologies of law isn’t appropriate in this instance, in part because the fulfillment of the right to peaceful assembly is not typically regulated by labor law, in spite of the high incidence of peaceful assemblies in the practices of trade unions and individual workers. 

In addition, Part 3 of Art. 339 raises significant concerns, as it states that “the authority (person), who is in charge of the planned event, must notify the employer or their authorized body (person), local government and law enforcement authority no later than three days prior to the onset of protest actions” – this provision contravenes the art.39 of Constitution of Ukraine that states that only executive authorities or local council should be notified about the peaceful assembly and also contravenes the decision of April 19, 2001, № 4-рп/2001, issued by the Constitutional Court of Ukraine, which does not set specific deadlines of prior notice of a peaceful assembly, but instead states that “the terms of prior notice should be within reasonable limits and should not restrict the right of citizens to peaceful gatherings, meetings, rallies, marches, and demonstrations, prescribed by Article 39 of the Constitution of Ukraine.”

5. Regarding the realization of the right to strike – draft law 2410-1 contains positive provisions with regards to the declaration of strike due to the refusal of employer to satisfy the requirements of the employees or their entrusted body, trade union, with a prior notification no later than three days in advance of the strike, and in the case of a decision to strike at a continuously operating production – with a prior notification no later than ten business days in advance. In addition, strike may be used as a means to resolve a collective labor dispute without recourse to regulation (conciliation) procedures in the case when payment of delayed wages is a demand of the employees. 

6. Draft law 2410-1 contains a positive provision on the possibility to organize a warning strike, as defined in Article 341: a warning strike is a voluntary suspension of work by the employees for the duration of one hour to demonstrate the degree of organization of employees and their determination to seek the satisfaction of their stated demands. 

7. With the draft 2410-1, the Law of Ukraine “On the procedure of collective labor disputes (conflicts)” is no longer in effect – this leads to a legal vacuum on many issues related to the announcement and procedure of collective labor disputes and conciliation procedures. 

8. Part 2 of Article 346, draft law 2410, establishes that it is forbidden to declare a strike with regards to the demands or work conditions that are already regulated in the collective agreement, while the collective agreement is in effect. In case the demands or work conditions defined by the collective agreement are upheld, this makes it impossible to improve work conditions relative to the ones already prescribed by the collective agreement. In addition, the category of “upholding” work conditions raises many questions as to the subject that is entitled to determine whether the work conditions are “upheld”. 

9. Given the introduction of employers’ right to lockout in draft law 2410-1, even the positive new provisions on workers’ right to strike will be invalidated in practice.