Draft of the new Labor Code: the analyst explained what is of concern and what is wrong with the current one

In the draft of the new Labor Code, the provision allowing employers to read employees’ correspondence poses a threat of interference with privacy, and the simplification of the dismissal procedure raises concerns about the possible weakening of their social protection and labor rights. Iryna Korzhenkova, an analyst at the Center for Joint Action, told UNN about this and explained what is wrong with the current code.

“The current labor legislation is largely based on the Labor Code, which was adopted in 1971 in the Soviet centralized economy. It does not take into account the modern realities of the labor market, including new forms of employment such as remote or project work. And this is logical, because nothing like this existed back then. Changes to the Labor Code should be part of a broader reform that takes into account the interests of both employees and employers, creating a balance between social protection and economic efficiency,” Korzhenkova said.

What is proposed in the draft of the new Labor Code?

Korzhenkova noted that Ukraine is currently developing and discussing a new Labor Code to replace the outdated Labor Code and take into account EU requirements and standards. The text of the draft of the new Labor Code has been published for public discussion , but it has not yet been registered in the Verkhovna Rada of Ukraine.

Korzhenkova told us what attracts the most attention in the project’s text.

EXPANDING THE CONTROL

“The draft of the new Labor Code provides for the employer’s right to check employees’ work correspondence and files on their work devices if it is related to their work. Personal data or correspondence cannot be checked without the employee’s presence, and the checks themselves are supposed to be conducted with minimal interference with a person’s privacy. However, this rule creates threats of interference with privacy, and it is not clear how to ensure that the employer will comply with the law on personal data protection and ethics during the inspection,” Korzhenkova said.

REMOTE AND HOME-BASED WORK

According to the analyst, the draft law establishes the rights and obligations of employees and employers in the context of remote work. That is, it legalizes “remote work.

NEW FORMS OF EMPLOYMENT CONTRACTS

“The draft of the new code offers various types of contracts (fixed-term, seasonal, home-based, remote) that take into account the specifics of modern working conditions. This will allow employees and employers to regulate labor relations more flexibly. On the other hand, it is fraught with possible abuse by employers in the case of non-fixed hours,” Korzhenkova said.

TERMS AND CONDITIONS OF DISMISSAL

“The document provides for simplification of the procedure for dismissal of employees, which raises concerns about the possible weakening of their social protection and labor rights. In addition, the draft proposes to reduce the influence of trade unions. However, they are still not very effective, so it may be worth looking for an alternative to them,” the analyst said.

ELECTRONIC LABOR CONTRACTS

Korzhenkova noted that the project proposes to conclude employment contracts in electronic form using a digital signature.

“This saves time and resources, and simplifies the storage and accounting of documents. At the same time, it will be necessary to take into account cyber threats,” the analyst added.

PROTECTION AGAINST MOBBING

“For the first time, it is proposed to recognize mobbing (harassment) as an offense. In addition, the draft law establishes mechanisms for its prevention and consideration. However, it should be borne in mind that in reality there may be difficulties in proving the facts of mobbing,” Korzhenkova said.

LIABILITY FOR SALARY DELAYS

Korzhenkova noted that the authors of the draft law propose that the employer should pay a penalty for each day of delay in payment.

VACATION

“It is proposed to increase the length of annual paid vacation from 24 to 28 days, which brings Ukrainian legislation closer to European standards,” the analyst said.

MEDIATION

The draft of the new Labor Code provides for a procedure for the peaceful settlement of labor disputes with the participation of a mediator to avoid lengthy litigation.

Korzhenkova explained why changes are important today.

“Adapting to modern realities. Freelancing, remote work, the gig economy and contract employment are growing in popularity. The current code does not take these trends into account,” Korzhenkova said.

Another aspect is European integration.

According to her, Ukraine is striving to harmonize its legislation with the legal norms of the European Union. This includes implementing the principles of equality, protecting the rights of employees and employers, and ensuring decent working conditions. For example, there was a list of jobs prohibited for women. However, in 2017, this list was abolished to bring the legislation in line with international standards, in particular with the requirements of the European Convention for the Protection of Human Rights and Fundamental Freedoms and the principles of gender equality.

The analyst also noted the importance of protecting employees’ rights.

“The new code should ensure better regulation of relations between employees and employers, avoiding extremes – both excessive protection of employees and their vulnerability to the employer. In addition, the current norms do not fully take into account gender equality, the rights of people with disabilities, young workers or the elderly,” Korzhenkova explained.

She also said that labor legalization should be encouraged.

“Due to the complexity of regulation and burdensome rules for business, many employers resort to illegal employment. The new rules can simplify the legalization of labor relations, which is important for filling the budget and social protection of employees,” Korzhenkova said.

The analyst emphasized that it is also necessary to respond to the challenges of war.

“In the context of the war and post-war reconstruction, labor legislation must respond to new challenges: the relocation of workers, the need for retraining, and the creation of conditions for veterans and those returning to the labor market,” Korzhenkova said.

In addition, she said, it is important to modernize the economy. Outdated regulations can create obstacles for investors and businesses, reducing Ukraine’s competitiveness. Instead, simplification of procedures and regulation of flexible forms of employment will promote entrepreneurship.

“Counteracting labor migration. The modern Labor Code, which protects the rights of employees and promotes the creation of quality jobs, can become a factor in retaining citizens in Ukraine,” Korzhenkova said.

THE STRANGEST THINGS IN THE CURRENT LABOR CODE

The analyst recalls that, for example, according to Article 166 of the Labor Code, production workers with harmful conditions (exposure to toxic substances, dust, etc.) must be given free milk or other equivalent products.

“Why is that? Because milk was thought to neutralize the toxic effects of certain harmful substances. New research refutes this assumption. Therefore, the priority should be on modernizing equipment and ventilation, and providing personal protective equipment. In the meantime, the “milk for harm” rule remains a vivid example of old Soviet approaches to labor law,” Korzhenkova said.

According to her, in addition to “milk for damage,” many other rules demonstrate outdated Soviet approaches. For example, if an employee uses his or her own tools to perform work, the employer must compensate for their wear and tear or provide replacement. In today’s environment, this is rarely applied, as most employers provide equipment.

“Underage workers under 18 are prohibited from working overtime, at night, or performing heavy work. While this rule is important for the protection of minors, some aspects of it may not be applicable to modern types of work (e.g., online work),” Korzhenkova said.

What glaring archaisms still exist in Ukrainian labor law

• the length of the working week. The 40-hour working week was established back in 1971 and does not correspond to modern realities. Many countries around the world are already switching to a 4-day or 35-hour working week;
• articles regulating labor remuneration, establishing a minimum wage and overtime pay rates. This is somewhat outdated in a market economy where wages are determined by supply and demand;
• disciplinary liability of employees: reprimand, dismissal, etc. These rules may seem outdated in an environment where employers value employee loyalty and motivation more than punitive measures;
• Vacations. 24 calendar days of annual vacation is the minimum standard in many countries. In Ukraine, however, there is a system of differentiated leave, which can lead to inequality between employees;
• There is no clear definition of the status of freelancers and no guarantees for their protection, both socially and in relations with the employer;
• part-time employees are not entitled to the full range of social guarantees;
• the article establishing the grounds for termination of an employment contract at the initiative of the employer contains a clause on reducing the number or staff of employees. These rules may be somewhat discriminatory: for example, a woman with a child will have an advantage in keeping her job over a woman or man without children, although the qualifications of the employee should be taken into account first and foremost;
• probationary period when entering into an employment contract. It is not always necessary and may restrict the employee’s rights;
• The Labor Code requires an employment contract to be concluded in writing. This is difficult for remote work (by the way, there is no such thing at all);
• Employee liability for damage caused to the employer. In an environment where employers have risk insurance, this is no longer relevant.

From time to time, the Labor Code is amended on a case-by-case basis. For example, in 2024:

• the duration of possible unpaid leave by agreement of the parties was increased from 15 to 30 calendar days;
• the possibility of taking unpaid leave without any time limit in the event of a threat of armed aggression, epidemic, etc. was introduced;
• clarified the duration of vacations and other aspects of labor relations.

Korzhenkova noted that all these changes are formal and do not solve the problems listed above.