Partial unemployment benefits for employees from the Employment center

As you remember, in our previous legal advices we described the main forms of organization of labor relations during martial law, each of which had its own conditions and benefits:

– unpaid leave;

– downtime;

– part-time work;

– suspension of the employment contract.

Also in our legal advices, we mentioned the existence in the Law “On Employment” (hereinafter – the Law) of the institution of partial unemployment assistance (hereinafter – assistance), which is that if the suspension (reduction) of production reduces employee wages, the employer through the Employment center receives funds from the Social Insurance Fund, which transfers then to employees as compensation for partial loss of their earnings.

At the same time, only those employees are entitled to receive the assistance, the level of reduction of working hours of which is 50 percent or more per month.

This institute was introduced in the midst of a pandemic and was intended to be used primarily due to quarantine restrictions. However, the above-mentioned Law was recently amended¹, which directly extended the effect of this institution to the situation of suspension (reduction) of production (performance of works, provision of services) due to martial law (hereinafter – suspension / reduction of production).

Next, we propose to consider what forms of organization of labor relations with employees, the employer can potentially apply for assistance.

1. In what form of organization of labor relations is it possible to receive assistance?

It should be noted that neither the Law nor the Procedure currently directly establishes the form of organization of labor relations in which benefits may be paid. However, based on the analysis of their provisions, the following conclusions can be drawn that assistance:

– will NOT be paid for:

a) payable downtime (this is directly stated in the Procedure);

b) unpaid leave (as it is formally granted at the request of the employee, and not for reasons of suspension / reduction of production).

– will be paid for:

a) suspension of employment contract;

b) part-time work, which is not more than 50% of its previous normal duration.

Thus, for employees with whom such forms of labor organization as suspension of employment contract have been introduced, or part-time work has been established, which is up to 50% of its previous duration, the employer can potentially apply for assistance to the Employment center.

2. What is the amount and term of assistance?

Assistance is provided for up to 180 calendar days.

As for the amount of assistance, according to the Procedure, it is set for each hour for which the employee was reduced working hours, at the rate of two thirds of the tariff rate (salary) set for the employee, and may not exceed the subsistence level for able-bodied persons, i.e. 2 481 hrn. per month per employee.

3. What are the conditions and procedure for providing assistance?

The new version of the Law states that the procedure and criteria for providing assistance are determined by the Cabinet of Ministers. At the same time, there is the relevant procedure approved by the Cabinet of Ministers Resolution No. 74 of February 3, 2021 (hereinafter – the Procedure), which contains contradictory wording and has not yet been brought into line with new amendments to the Law.

It should be noted that the Procedure contains both general and special conditions, as well as various grounds for the employer to apply for help, which determines the package of documents required for submission and the procedure for their consideration by the Employment center. In addition, the Procedure approves special forms of documents to be submitted by the employer, as well as provides a number of detailed conditions of the employer’s activities related to the consequences of such assistance.

At the moment, we are not able to predict the practice of applying the new version of the Law and the old Procedure: it is possible that the existing Procedure will be amended in the near future, a new one will be approved or official explanations will be made public.

However, we believe that today employers have grounds to apply for help, guided by the current Procedure and the new version of the Law.

CONCLUSIONS

We believe that employers have the possibility to apply to the Employment center for assistance in respect of employees with whom employment contract has been suspended or who have been transferred on part-time work, which is not more than 50% of its previous duration.

Given the novelty of the application of this institution in martial law, inconsistent legislation and lack of established practice, we recommend that before applying for such assistance to hold individual consultations with representatives of the Employment center.