Experts of BDO in Ukraine on payroll and personnel administration continue to monitor and comment on changes in labor legislation in connection with the imposition of martial law. In previous publications, we have considered the peculiarities of personnel accounting in wartime and answered the question whether it is possible to dismiss employees in wartime. In this publication we will discuss the action plan of the employee and the employer when suspending the employment contract.
In addition, to explain the organization of labor relations under martial law, the Law of Ukraine No. 2136 dated 15.03.2022 was adopted (before the Draft Law No. 7160). Article 13 of the said Law introduces the concept of suspension of an employment contract. Paragraph 1 of Art. 13 of the Law No. 2136 states that the suspension of an employment contract is a temporary termination by the employer of providing the employee with work and a temporary termination of the employee's performance of work under the concluded contract.
The employment contract may be suspended due to military aggression against Ukraine, which excludes the possibility of providing and performing work.
As such, during martial law, the employer may whether dismiss the employee in accordance with Articles 38, 39, 40, 41 of the Labor Code by terminating the employment contract, or suspend it without terminating the employment contract according to Art. 13 of the Law No. 2136. Suspension may occur in the event of absolute impossibility of the employee to perform his/her duties during martial law. In this case, the employee does not show up for work, does not perform his/her duties, also remotely, but he/she is not fired. In doing so, the employer is exempt from the need to retain such an employee, does not bear any costs of wages and SSST.
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The initiative to suspend may be on the part of both the employee and the employer. For example, in the first case, an employee became a refugee, is abroad and unable to perform his or her duties remotely. Or, in the second case, the employer's production facilities have been destroyed as a result of hostilities and he/she is unable to provide the employee with work. In both cases, the suspension must be recorded. Paragraph 2 Art. 13 of the Law No. 2136 allows the employer and the employee to notify each other of the suspension in any available way. Whoever initiated the suspension does not need the consent of the other party.
Within the company, the temporary suspension of employment should be fixed in the order, which must include the start and end of the suspension. The final period, in addition to a specific date, can be expressed by indicating the event at which it will end. In the timesheet to record the temporary suspension of the employee can be marked "OTH" - other unworked time or "O" - other types of absences.
Read also: " Labor relations during martial law: can the employer dismiss employees"
According to item 3 of Art. 13 of the Law No. 2136, reimbursement of wages, guarantee and compensation payments to employees for the period of suspension of the employment contract is fully entrusted to the state, which carries out military aggression against Ukraine.
To meet these conditions, an accountant shall calculate the salary that an employee should have received in the performance of his/her duties in peacetime, as well as SSSC, PIT, MT for this amount. This calculation is made in the form of a certificate and is not reflected in financial and tax accounting. Based on these certificates, the employee will be able to apply for compensation for lost wages and pension insurance record.
We thank our experts for a detailed review of changes in labor legislation of Ukraine related to the imposition of martial law. And seek advice, if you have additional questions.
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