On 19 August 2022, Law No. 2434-IX of Ukraine "On Amendments to Certain Laws of Ukraine on the Regulation of Simplification of Regulation of Labor Relations in the Sphere of Small and Medium Enterprises and Reduction of Administrative Burden on Entrepreneurial Activity", dated 19 July 2022 ("Law"), came into effect. The Law applies to labor relations between small and medium enterprises (i.e., employers with 10 to 250 employees and with an annual income of up to EUR 50 million per year) and employees with a salary of more than eight times the statutory minimum monthly salary.
Key changes
- The Law established the possibility for the parties to regulate the terms for the employee hiring and termination, remuneration, allowances, bonuses, rewards and other incentives, compensatory payments, work hours, vacation, rest, or other rights and guarantees in the employment agreement that are normally defined by the Labor Code of Ukraine ("Code").
- In the case of the introduction of a simplified regime:
- employers no longer need to maintain documentation (personnel, organizational and administrative, local normative acts) regarding matters regulated in the employment agreement;
- annual leave can be divided into parts of any duration at the request of the employee, and it is also possible to grant leave without pay with the consent of the parties for a period of more than 15 calendar days per year, if this condition is stipulated by the employment agreement;
- the employment agreement can be concluded in the form of an electronic document with the consent of the parties;
- the employment agreement can provide for the grounds for its termination, other than those established by the Code, with payment of compensation to the employee in the amount and manner determined by the employment agreement, taking into account the minimum amounts stipulated by the Code.
The Law is in force for the duration of martial law and will lapse afterwards.
