A new type of employment contract – with freelancers

On July 19, the Verkhovna Rada adopted the Law “On Amendments to Certain Legislative Acts of Ukraine on the Regulation of Certain Non-Standard Forms of Employment” (hereinafter referred to as the Law), which essentially introduces a new type of labor relations with employees. Below we offer you an overview of its main provisions.

As you know, the Code of Labor Laws establishes rather strict mechanisms for the use of labor and the mandatory systematic fulfillment by the employee of his duties even on the terms of part-time work.

Such a strict legislative framework does not allow employers to attract freelancers on non-systematic terms and only in cases of need, which in practice forces them to conclude civil law contracts with them, which attracts the attention of the State Labor Service and there is always a risk of recognizing them as a hidden labor relationship with the imposition of appropriate sanctions.

The new Law is aimed precisely at solving the described problem, introducing an unprecedented type of labor relations on completely flexible conditions for attracting an employee to work on the basis of an “employment contract with non-fixed working hours” (hereinafter – a freelance contract).

A new type of labor relations assumes that the employee is involved in work only if necessary and at the request of the employer. That is, the employer may provide the employee with work with payment for the time actually worked, but is not obliged to do this systematically.

The Law provides for the following restrictions on the use of such a mechanism:

– one employer can have up to 10% of freelance contracts of the total number of employment contracts;

– in any case, the employer must pay the employee under a freelance contract 32 hours of work per month.

The Law clearly regulates the mandatory conditions of a freelance contract, such as the procedure for calling an employee and the basic days and times when an employee can be involved in work. In addition, the Law establishes a special procedure for terminating such an agreement or transforming it into other types of employment contracts.

In general, such an innovation is positive for both employees and employers, as it is a dynamic mechanism for using labor in the unstable conditions of a pandemic and martial law.