Simplification of labor relations for small and medium enterprises during martial law

On July 19, 2022, the Verkhovna Rada adopted the Law on Simplification of the Regulation of Labor Relations in the Sphere of Small and Medium Businesses¹ (hereinafter referred to as the Law), which introduces a new “simplified regime for the regulation of labor relations” (hereinafter referred to as the simplified regime) for the period of martial law.

The Law has been sent to the President for signature, after which it should be published and come into force in the near future.

To whom does the simplified regime apply and what does it consist of, we will consider below.

1. Who can use the simplified regime?

Under the Law, the simplified regime can be applied in two cases:

А. in small and medium² enterprises with an average number of employees per calendar year of no more than 250 people, or

B. in relation to an employee of any enterprise, whose monthly salary is more than eight times the minimum wage (UAH 52,000).

2. What does the simplified regime involve?

– the ability to establish individual working conditions directly in the employment contract without subordination to the local acts of the employer (internal labor regulations, collective agreement, regulations, orders);

– the possibility of dismissal of an employee on grounds not provided for by the Labor Code;

– the possibility not to request the consent of the trade union to involve the employee in overtime work or to dismissal³;

– the liberalization of the procedure for granting and terms of annual and unpaid leave, as well as the procedure for changing essential working conditions in comparison with the provisions of the Labor Code.

The Law, among other things, provides for detailed conditions and procedures for concluding an employment contract under the simplified regime.

We also draw your attention to the fact that, according to the final provisions of the Law, it will be valid only for the period of martial law and will cease to be valid immediately after its repeal.