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New draft law deals a major blow to Ukraine’s gig workers

New draft law deals a major blow to Ukraine’s gig workers

On November 2, 2020, a group of MPs submitted a draft law No.4303 “On promoting the development of digital economy in Ukraine”.

In Labor Initiatives lawyers` opinion, this draft law contains multiple dangerous provisions that would undermine any initiatives to protect and provide decent work for workers of the platform economy. For instance, whereas the whole world tries to provide labor rights for gig workers, authors of the draft law introduce the term “gig-worker” and “gig-contract” in national labor legislation. Even the platform companies avoid such terms preferring “independent contractors”.

Moreover, this draft law contradicts with the recent positive draft law of the Ministry of Economy regarding signs of employment relations aimed to combat shadow and informal economy.

The law draft is connected to the new project developed by the Ministry of Digital Transformation called “Diya City” – the platform described by developers as a ”digital business country in which there are no other boundaries for investment, job creation or development of new technologies”. The registration in this platform performs by the decision of the Cabinet of Ministers. Although it aims to attract investments in the digital sector, in fact, any company may be registered in it – there are no restrictions.

As we mentioned above, the law draft introduces the term “gig-worker” and “gig-contract”. A resident of “Diya City” may hire employees on the basis of “gig-contracts” which has no boundaries on its duration and other conditions – all issues should be negotiated between parties and the law doesn`t provide the minimum threshold of guaranteed rights. Thus, the balance of power in such relations drastically deteriorates.

The draft law introduces at-will employment for such workers. Termination of the gig-contract may be done without any grounds with a 30-day advance notice. Moreover, if a gig worker worked less than 3 months, the notification of firing may be done with a 3-day advance notice. Such provisions atrociously violate ILO convention № 158.

Simultaneously with the delivery of a written application to the gig worker to terminate the gig contract or in case of receiving such notification from the gig worker, the resident of Action City has the right to remove the gig employee from work with payment of at least the daily gig worker`s fee for each the day of such removal. The existence of grounds provided by the Labor Code of Ukraine for dismissal is not required.

There are no provisions on the possibility to form unions for such “gig-workers”.

The procedure and mechanism of remuneration calculation are also highly questionable. No provisions on wages, in particular minimum wages, are enshrined here. For the work performed during the month, the gig worker is paid remuneration in accordance with the terms of the gig contract. The procedure and terms of payment of remuneration are determined by the parties in the gig contract at their own discretion.

In the absence of agreement of the parties on the amount of daily and hourly remuneration of the worker, it is considered that the parties have agreed on the minimum amount of such remuneration. The amount of minimum remuneration is calculated as follows:

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1) for daily remuneration – by dividing the monthly remuneration specified in the gig contract by 21;

2) for hourly remuneration – by dividing the monthly remuneration specified in the gig contract by 168.

Under the draft law, the gig-worker independently determines their workplace, is responsible for ensuring proper and decent working conditions as well as OSH rules in case of telework. This provision fully contradicts international standards on telework and even draft law 4051 which has been already adopted in the 1st reading in the parliament.

Dismissal of gig workers during their pregnancy and during maternity leave is prohibited. It is prohibited to terminate a gig contract during sick leave, except in cases when sick leave lasts more than one month. Thus, if a gig worker has, for instance, COVID-19 or breaks a leg and his/her sick leave lasts more than one month, then they will be dismissed.

Moreover, residents of Diya City could hire not only gig workers but also ordinary employees. However, only fixed-term contracts could be concluded with them. This absolutely undermines stability of labor relations and violates international and European norms. Labor Initiatives lawyers believe that the employer is the stronger party in the employment relationship and therefore he/she often dictates the conditions, and the employee, as the weaker party in need of a job to survive, will be forced to agree to the conclusion of the fixed-term employment contract.