Labor disputes: top 10 court decisions of 2024

Recovery of non-pecuniary damage in a labor dispute: what are the time limits for going to court?

As a general rule, the time limit for filing a claim in a labor dispute is three months, and in cases of dismissal – one month (Article 233 of the Labor Code of Ukraine (hereinafter – the Labor Code of Ukraine). However, in many labor disputes, employees also seek compensation for moral damages. But do these time limits apply to such claims?

In case No. 755/3443/21, the plaintiff was repeatedly dismissed from his job, and the court ruled these dismissals unlawful. However, the employer failed to comply  with the court’s decision to reinstate him. Due to prolonged litigation and forced absenteeism, the plaintiff filed a claim for non-pecuniary damage.

The Supreme Court dismissed the claim due to the missed deadline under Article 233 of the Labor Code of Ukraine.

However, the Supreme Court emphasized that the time limits set forth in Article 233 of the Labor Code of Ukraine do not apply to compensation for non-pecuniary damage caused by violation of labor rights. The Court acknowledged that the prolonged failure to comply with the decision on reinstatement caused the plaintiff to suffer mental anguish, and therefore ordered the employer to pay the plaintiff compensation for non-pecuniary damage (Resolution of the Supreme Court of 24 January 2024 in case No. 755/3443/21).

Thus, the general limitation period of three years applies to claims for compensation for non-pecuniary damage in a labor dispute.

A link to a website with a list of vacancies is not evidence of fulfillment of the obligation to offer the employee another job

If an employee is dismissed on the grounds of redundancy, the employer must offer the employee another job.

In the circumstances of case No. 638/14165/21, the employee was dismissed due to redundancy, but the employer  limited the employee’s ability to apply for vacant positions.. Thus, instead of offering the employee a vacancy and transferring him to another job, the employer suggested that the employee familiarize himself with the list of vacancies on its website.

Upon reviewing the case, the Supreme Court stated that the employer is obliged to offer all vacant positions that existed at the company before the dismissal.

At the same time, the Supreme Court concluded that a link to a list of vacancies on the website is not evidence of fulfillment of this obligation, as it is impossible to establish with certainty:

• which vacancies were available on the employer’s website at that time and whether all the vacancies available at that time were listed there;
• whether the plaintiff familiarized himself with the list of vacancies and had access to the said website (Resolution of the Supreme Court of February 21, 2024 in case No. 638/14165/21).

Thus, a link to a website with a list of vacancies does not relieve the employer of the obligation to provide the employee with specific offers for vacant positions. Dismissing an employee without proper compliance with these requirements is unlawful.

Being abroad during martial law does not automatically justify an employee’s absence from work

In recent years, many employees have been forced to leave Ukraine because of the war. As a result, some employees have been unable to report to work or fulfill their labor duties (if it is not possible to do so remotely). But can such employees be dismissed for absenteeism?

In the circumstances of case No. 420/645/23, the plaintiff was absent from work from April to December 2022, did not report the reasons for her absence, and was therefore dismissed for absenteeism. Later, the plaintiff explained her absence by the military aggression of the Russian Federation, which posed a threat to her life, and forced her to leave the country.

The Supreme Court stated that traveling abroad due to military operations is a circumstance that can explain absence from work, but it does not exempt from the need to inform the employer of your situation. The plaintiff did not file any applications, such as for leave or suspension of the employment contract, which demonstrated her unwillingness to settle the employment relationship.

The Supreme Court ruled  that the circumstances of military aggression are not an automatic ground for absence from work if the employee has not taken any action to notify the employer of the circumstances that prevent him from performing his duties.

As a result, the Supreme Court recognized the employer’s actions as lawful, noting that the plaintiff’s absence from work was a continuing violation of labor discipline that began in April 2022 (Resolution of the Supreme Court of April 3, 2024 in case No. 420/645/23). 

In another case, No. 552/7015/22, the Supreme Court confirmed this position, stating that the plaintiff’s decision to stay outside Ukraine in a safer place was her absolute right. However, this decision does not negate the fact of absenteeism. The Supreme Court pointed out that martial law must have a direct impact on the plaintiff’s absence from work. Otherwise, the dismissal for absenteeism is legal (Resolution of the Supreme Court of November 27, 2024 in case No. 552/7015/22).

Dismissal on the grounds of termination of the official’s powers: when is it not necessary to pay severance pay?

Art. 44 of the Labor Code of Ukraine stipulates that upon dismissal under clause 5 of part 1 of Art. 41 of the Labor Code of Ukraine, namely in connection with the termination of the powers of an official, an employee is required to be paid severance pay in the amount of not less than six months’ average earnings. However, if the individual continues to perform duties in the same position, the right to such payment does not arise.

For example, in case No. 202/3322/22, the employee claimed severance pay. However, the termination of his powers under clause 5, part 1, Article 41 of the Labor Code of Ukraine took place only pursuant to the decision of the supervisory board, and not for the purpose of dismissal. Thus, on the same day, the supervisory board decided to terminate the plaintiff’s powers as chairman of the board and to re-elect him to the same position.

In other words, if an employee is immediately reappointed to the same position after dismissal, no severance pay is due. In this case, there is no termination of employment, which precludes the right to such benefits.

The Supreme Court has concluded that the purpose of severance pay is to provide financial support to the dismissed employee while he/she is looking for a new job, so the absence of such pay in this situation is legal (Resolution of the Supreme Court of 27 March 2024 in case No. 202/3322/22).

Under what conditions is it legal to suspend an employment contract?

During the period of martial law, a new mechanism was introduced into labor law – suspension of an employment contract. Article 13 of the Law of Ukraine “On the Organization of Labor Relations under Martial Law” sets out two mandatory conditions under which an employment contract  may be suspended, namely if, due to armed aggression against Ukraine:

• the employer is unable to provide the employee with work;
• the employee is unable to perform his or her duties.

This position was confirmed by the Supreme Court in case No. 933/411/22, stating that in order to apply this rule, the employer must be in circumstances where it is unable to provide the employee with work and the employee cannot perform it.

At the same time, the Supreme Court emphasized that the employer’s right to suspend is not absolute. The employer must provide evidence that it is in circumstances preventing it from offering work to the employee, particularly that it is impossible to arrange remote work or offer an alternative position.

Having considered this case, the Supreme Court found that the employer’s order to suspend the employment contract complied with the requirements of the law in its form and content, and the employer reasonably proved the impossibility of providing the employee with work (Resolution of the Supreme Court of 17 April 2024 in case No. 933/411/22).

In another court case No. 243/442/23, the Supreme Court formulated a similar legal position and concluded that the suspension of the employee’s employment contract was lawful, since:

• the psychiatric hospital, which was located in the vicinity of the combat zone, was shelled and the inpatient departments were not working, and therefore the employer was unable to provide the plaintiff, who was the head of the psychiatric department, with a job;
• the latter, in the absence of persons who receive psychiatric care in an inpatient setting, as well as medical staff in the department, was unable to perform her duties, and remote work for a  psychiatrist in an inpatient psychiatric department was not feasible (Resolution of the Supreme Court of March 06, 2024 in case No. 243/442/23).

Reduction of the notice period for dismissal

An employee may  request a reduction of the two-month notice period for impending dismissal. However, the submission of such an application by an employee does not relieve the employer of the obligation to offer the employee all vacancies. The absence of such an offer is a violation of the dismissal procedure.

In the circumstances of case No. 641/1334/23, the employer offered the plaintiff only one vacancy, which required a change of residence. The plaintiff refused and filed an application for a shorter notice period. Subsequently, the employer did not offer any other vacancies, despite the fact that they existed, and granted the plaintiff’s application.

The Grand Chamber of the Supreme Court concluded that the reduction of the notice period is justified only when the employee refuses to continue working in any position.. Otherwise, there is a violation of labor guarantees by the employer.

Thus, a reduction of the notice period is possible, but only to simplify the process, not to exempt from employment guarantees. If the employer fails to fulfill the obligation to offer all vacancies, the dismissal may be declared illegal (Resolution of the Supreme Court of Ukraine of August 28, 2024 in case No. 641/1334/23).

Additional grounds for dismissal in the contract

A contract is a special form of employment agreement and may impose greater responsibilities  on the employee. This also applies to the grounds for termination of the contract.

The Supreme Court has confirmed that contract terms that allow termination at the initiative of either party without additional conditions do not contradict the law. 

An employment agreement in the form of a contract may establish additional grounds for dismissal, even if they worsen the employee’s position compared to the general norms of labor law (Resolution of the Supreme Court in case No. 521/965/23 of December 30, 2024).

Importantly, a contract may be concluded only with certain categories of employees in cases explicitly provided for by law (e.g., with heads of enterprises and institutions, heads of educational institutions, etc.). 

Court fee for recovery of average earnings: Is It Required?

Claimants in cases of wage recovery and reinstatement are exempt from paying court fees in accordance with paragraph 5 of part 1 of Article 5 of the Law of Ukraine “On Court Fees”.

Based on the same provision, plaintiffs are exempted from paying court fees for filing a claim for recovery of average earnings for the period of forced absenteeism. The relevant position of the Grand Chamber of the Supreme Court is set out in the decision of February 08, 2022 in case No. 755/12623/19.

However, in a similar case No. 638/14165/21, the Supreme Court  collected a court fee from the plaintiff, referring to the decision of the Grand Chamber of the Supreme Court of January 30, 2019 in case No. 910/4518/16, misinterpreting its content. After all, the Grand Chamber’s resolution states that the court fee is paid for the recovery of average earnings for the delay in severance pay, and not for the period of forced absenteeism.

In case No. 638/14165/21, the Supreme Court confirmed that the average earnings for the period of forced absenteeism and for the delay in severance pay are different in legal nature. The former is the salary that an employee is entitled to receive due to unlawful dismissal, while the latter is a type of employer liability. The Supreme Court did not take these differences into account, which is contrary to the law and the conclusions of the Grand Chamber of the Supreme Court (Resolution of the Supreme Court of October 02, 2024 in case No. 638/14165/21).

Thus, both parties to a labor dispute now have many effective tools for their defense, which only need to be applied in a timely and correct manner.

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