New edition of the Law “On Collective Agreements and Contracts”

On February 23, the Verkhovna Rada adopted the Draft Law on Collective Agreements and Contracts No. 7628 (hereinafter referred to as the Law), which introduces quite a lot of changes, the main of which are listed below. So far, the Law has not yet been signed by the President.

The Law generally introduces positive changes, in particular:

A. To date, the legislation defines the minimum quantity of funds for deductions to trade unions in the amount of 0.3 percent of the wage fund.

The Law proposes to abolish this amount, leaving the determination of the number of deductions at the discretion of the parties to the collective agreement.

At the same time, please note that if the employer is subject to an industry collective agreement that determines the number of deductions for employers carrying out activities within certain types of economic activity, the number of deductions at a particular enterprise cannot be lower than that determined by such an industry agreement.

B. The new Law introduces the possibility of remuneration below the conditions determined by collective agreements (but not below state norms) in the event of financial difficulties for the employer.

The Law defines the procedure for suspending the fulfillment of obligations regarding wage conditions that exceed the state minimum requirements for a period not exceeding 6 months.

In addition, the Law contains a number of other procedural clarifications, in particular:

1. The activities of several primary trade unions at the enterprise have been regulated, in particular, in terms of their material and technical support.

In particular, the employer provides premises for the activities of the joint representative body of the trade unions operating in the enterprise. In the absence of such a body, the premises shall be provided for joint use by all trade unions on the terms stipulated by a separate agreement.

A requirement has been established for the presence in the collective agreement of the Procedure for joining new trade unions to the collective agreement.

Also, in the case of participation in negotiations with the employer of several trade union organizations, the issues of exclusion of one of the trade unions from the negotiation procedure in case of ignoring procedural issues on its part were settled.

2. The Law clarifies the procedure for concluding, introducing amendments and participation of representatives of the parties when concluding a collective agreement

In particular, the possibility of holding a general meeting (conference) of employees in an online format has been introduced.

The minimum required number of employees at the general meeting of employees for decision-making is also established – at least half of the employees or at least two-thirds of the delegated persons.

3. The Law regulates the procedure and establishes the requirement that the collective agreement should contain:

3.1. The procedure and conditions for suspension for a certain period of validity of certain provisions of the collective agreement;

3.2. A list of force majeure circumstances, upon the occurrence of which the operation of certain provisions of the collective agreement is suspended.

Thus, the possibility of automatic suspension of certain provisions of the collective agreement under predetermined in it list of circumstances is being introduced.

At the same time, we would like to draw attention to the date of entry into force of the Law – in 6 months from the date of termination or cancellation of martial law, which means that these innovations cannot be reflected and used now. But it is already possible to start discussing the draft of a new collective agreement and negotiations with the trade union.

In case of any questions, we are ready to provide detailed explanations and practical advice on the implementation of amendments to collective agreements in accordance with the Law.