Features of the conclusion of a written labor contract in Ukraine in 2023

The issue of signing an employment agreement relates to the correct execution of employment relations, which, as we know, is the key to the safe and legal conduct of hired labour activities.

Ukrainian legislation provides for the possibility of concluding an employment agreement both in writing and orally. However, most employers prefer the written form of the agreement. What is the reason for such necessity and expediency?

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The importance of the employment agreement

The employment agreement protects the interests of both the employee and the employer, and also introduces certainty and detail in relations between the employer and employee according to the terms and nature of their cooperation. It promotes transparency and efficiency of the employment relationship when the employer and the employee have the same understanding of “who and what shall do”. That is why detailing in such cases is important, and the “downloaded” template from the Internet often does not contribute to effective management.

There are cases where the written form of the agreement is mandatory, for example:

• In case of signing the agreement. The agreement must be concluded with the executives of enterprises, foreigners, scientists, athletes, etc.;
• In cases where the employee insists on entering into an employment agreement in writing;
• When entering into an employment agreement with a minor;
• When concluding an employment agreement with an employer, who is a natural person (including an individual entrepreneur)
• When entering into an employment agreement for remote (home) work - which is currently very important during quarantine, or if quarantine encourages you to change the entire work schedule in the future.

It is important to understand that if you do not comply with these regulations, you risk being fined for breach of the employment rules:

• The fine under the Code of Ukraine on Administrative Offences is UAH 8,500-17,000;
• The fine according to the Labour Code of Ukraine amounts to ten minimum wage, as of 2021 this amount is UAH 47,230.

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Why should you enter into a written employment agreement if the law does not explicitly require this?

Even if the law does not explicitly require the employer to draw up an employment agreement, we still recommend doing so. Such a step is advisable if it is necessary to record the specifics of the employee’s work, including:

• The list of responsibilities of both the employee and the employer, as well as the nature of the work performed;
• Compliance with corporate rules, if any (company dress code), confidentiality rules (non-disclosure of information about the employer’s counterparties, its finances, documents created during work performed);
• Additional benefits and guarantees, individual mode of work or its schedule;
• Specifics of remuneration (amount of salary, incentive payments). Provisions for payment or nonpayment for labor;
• Duration of the probationary employment period;
• Conditions of an employee’s liability (in particular, material liability and the procedure for compensating losses incurred by the employer (his/her property) in the course of performing the work);
• The term and conditions of termination (dissolution) of an employment agreement (dismissal of an employee);
• The employer’s (employee’s) exclusive ownership rights to the intellectual property created by the employee in the process of fulfilling the employment agreement

In the absence of such clauses of the agreement, the rights are deemed belong to the employee who created the intellectual property object and to the legal entity or individual where or with whom he/she works, jointly. In this case, the employer shall not be entitled to use the created objects without the employee’s consent. The above provision is relevant for representatives of creative professions, IT sphere, where the labor function of an employee is to create literary works (books, brochures, articles, etc.), computer programs, photos, drawings, sketches, etc.

• The way the employer communicates with the employee. For example, e-mail, postal address to which any employee’s message will be sent. In practice, such a provision may be useful in the event of a dispute over the proper notification of the employee of vacation, reduction, receipt of certain documents, etc.

Of course, we have only generally described the provisions of the agreements that are worth paying attention to. If your case involves specific conditions of work that differ from the standard one - a template employment agreement will not help you.

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Our company provides consultations not only to employers who want to conclude employment agreements with their employees, but also to employees who want to make sure that the agreement offered to them is safe. This can give the employee confidence that there are no pitfalls in the dozens of clauses of the agreement, which may seem less obvious at start, but may have side effects after employment.