New procedure for booking reservists

The Decree No. 76 of January 27, 2023 approved the new Procedure for booking reservists from mobilization¹ (hereinafter referred to as the New Order). Next, we give a brief analysis of its provisions.

Who is to be booked?

The list of persons who can be booked for the period of mobilization includes persons working:

• at enterprises, institutions and organizations that are critical for the functioning of the economy and ensuring the livelihoods of the population in a special period;

• in public authorities and local self-government;

• at enterprises that have mobilization tasks;

• at enterprises that produce goods, perform work or provide services for the Armed Forces of Ukraine (on the basis of a valid government contract).

In our opinion, the most promising category for business representatives is the booking of employees within the first of the categories – as enterprises critical to the economy.

The booking process for enterprises critical to the economy consists of two steps:

– assignment of the enterprise to the specified category of enterprises;

– directly booking employees.

Below we will discuss in more detail each of these stages.

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The procedure for classifying an enterprise as critical to the economy

To be considered critical, an enterprise must meet three or more of the following criteria:

• • the total amount of taxes, fees, payments accrued, withheld and paid to the budgets during the reporting tax year exceeds the equivalent of 1.5 million euros;

  • the amount of receipts in foreign currency (except for credits and loans) for the reporting tax year exceeds the equivalent of 32 million euros;

  • absence of arrears in payment of ERUs;

  • the average salary at the enterprise for the last calendar quarter is not less than the average salary in the region for the fourth quarter of 2021;

  • the enterprise is included in the list of state-owned objects of strategic importance (does not apply to private companies);

  • the company is a resident of Diya City (relevant only for IT companies);

  • the enterprise is important for the economy or meeting the needs of the territorial community (the criteria for attribution should be additionally established by the relevant ministry or regional administration. At present, such criteria have not yet been established).

The classification of an enterprise as critical is carried out by the central executive authority (ministry), in the field of activity of which the corresponding enterprise carries out its economic activities, or by the regional administration on the territory of the corresponding administrative-territorial unit.

Thus, in order to be classified as a critically important enterprise, a company that meets three or more of the above criteria has to send an appropriate appeal (the form of such an appeal is not established by the New Procedure) to the relevant ministry or regional administration, with copies of documents confirming the fact of compliance with the relevant criteria, as well as tax reporting for the last calendar quarter.

An enterprise that has been classified as critical must update its status at least once a year according to the same procedure as for the first obtaining this status.

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The procedure for booking of employees of enterprises recognized as critical

After the company receives a decision from the relevant ministry or regional administration to include it in the category of critical enterprises, the company will be able to proceed to the second stage – directly to the procedure for making reservations for its own employees.

To do this, the company will need to submit to the relevant ministry or regional administration a list of employees and a justification for the need to book them in compliance with the forms of documents approved by the New Order.

The ministry or regional administration, having received the specified package of documents, submits it for approval to the General Staff, after which the approved lists are submitted by the General Staff to the Ministry of Economy, which makes the final decision on booking reservists.

Reserved workers are granted a deferment from conscription for a period determined in the decision of the Ministry of Economy, but not more than 6 months.

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Regarding booking quota

The number of reservists to be booked has to be 50%² of the total number of all reservists of the enterprise as of the date of submission of the list.

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On the reservation of employees with scarce military registration specialties

Recall that earlier, in accordance with the official position set out in the letter of the Ministry of Defense, reservations were not provided to employees if their military registration specialty was classified as deficient according to the list determined by the Ministry of Defense.

In turn, the New Order explicitly provided for an exception to this rule, in particular, by providing the potential possibility of booking the heads of critical enterprises and their deputies, regardless of their military specialty.

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Regarding a previous booking

Clause 2 of the Resolution expressly provides that deferrals from conscription for military service, which were granted to those liable for military service by decisions of the Ministry of Economy before the entry into force of the New Order, are valid and continue to be valid until the expiration of the period for which they are granted.

CONCLUSIONS:

1. In the event that the relevant company managed to receive a reservation of its employees before the introduction of the New Procedure, and the period of such a reservation has not yet expired, such a reservation shall remain in force, together with the corresponding deferrals issued on its basis, until the expiration of the said deferrals.

That is, there is no urgent need to immediately begin the procedure for classifying such a company as a critical enterprise. However, if such a business meets three or more of the above critical establishment criteria, then the process may be started today (for the purposes of future new bookings after the current deferrals expire).

2. For those companies that did not have time to receive a reservation under the old procedure, or the validity of the reservation has already expired, it is advisable to start the procedure for classifying such companies as critical enterprises as soon as possible by sending an appropriate appeal to the relevant ministry or regional administration with the addition of copies of documents , confirming the fact of compliance with the relevant criteria, as well as tax reporting for the last calendar quarter.