Employee dismissal: TOP-9 landmark judicial rulings of 2025

Given the outdated nature of Ukraine’s labor legislation, court practice is an important guide for employees and employers when terminating employment relationships.

Let us consider the key positions of the Supreme Court, the Grand Chamber of the Supreme Court, and the Constitutional Court of Ukraine (hereinafter referred to as the SC, GCS, and CCU, respectively), formed in 2025, which concern disputes over the recognition of dismissal as unlawful, reinstatement at work, and recovery of earnings for the period of forced absence. 

When dismissing an employee again on the same grounds, the employer must follow the dismissal procedure again 

In its ruling of July 30, 2025, in case No. 761/40406/23, the SC expressed its fundamental legal position on the legal consequences of reinstating an employee and the possibility of his or her re-dismissal. 

In this case, the deputy director of a state institution was dismissed under Article 40(1) of the Labor Code of Ukraine (hereinafter referred to as the LCU) due to staff reductions. The court found the dismissal unlawful because the plaintiff was not offered all available vacancies and reinstated the employee.

The employer complied with the court’s decision and reinstated the employee, but dismissed him again on the same day. The second dismissal was carried out on the same grounds (staff reduction) and with reference to the documents that had already been used during the first dismissal.

The courts of first and appellate instances ruled that the second dismissal was unlawful. The courts found violations of Article 49-2 of the Labor Code of Ukraine, in particular the absence of a new two-month notice of dismissal, an incomplete list of vacant positions, and the absence of repeated approval by the competent authority. The notice of dismissal and the list of vacancies were handed to the employee only two hours before the dismissal.

Supporting the conclusions of the lower courts, the Supreme Court emphasized that the legal consequences of reinstating an employee mean the annulment of all actions taken prior to the unlawful dismissal. This means that the re-dismissal of an employee after their reinstatement is possible only if all procedural guarantees for dismissal established by labor legislation are fully and properly observed. 

The court confirmed the legality of the dismissal for absenteeism of an employee who left the country and did not return to work after the end of her unpaid leave 

The next important legal position was formulated in the resolution of August 8, 2025, in case No. 201/4727/24, in which the Supreme Court considered a dispute over the legality of dismissing an employee for absenteeism during the period of martial law.

The employee, who left Ukraine and acquired the status of a person under temporary protection, was granted unpaid leave for a period of 90 calendar days on the basis of paragraph 4 of Article 12 of the Law of Ukraine “On the Organization of Labor Relations under Martial Law.” However, she did not return to work after this period expired.

The Supreme Court noted that the employer’s obligation to grant an employee unpaid leave, as provided for in paragraph 4 of Article 12 of the Law of Ukraine “On the Organization of Labor Relations under Martial Law,” has clearly defined time limits and cannot exceed 90 calendar days. After this period expires, the employee is obliged to return to work unless she can prove that there were other valid reasons for her absence that objectively prevented her from returning to work.

As a result, since the employee was aware of the end of her leave period but did not return to work and did not provide sufficient evidence of the validity of her continued absence, the Supreme Court agreed with the conclusions of the lower courts and emphasized the legality of her dismissal for absenteeism.

The right to assess a violation of labor duties as gross rests with the court considering the specific labor dispute

Another important legal position was set out in the decision of the Civil Court of Cassation of March 12, 2025, in case No. 466/2799/22, which concerns the dismissal of an employee for a single gross violation of labor duties on the basis of paragraph 1 of part 1 of Article 41 of the Labor Code of Ukraine.

In this case, the employer dismissed the director of a branch of a state scientific institution in connection with his conclusion of several contracts on behalf of the institution for significant amounts without the mandatory approval of the central institution. This directly contradicted the terms of the employment contract and the relevant provision on the branch. 

Reviewing the case on appeal, the Supreme Court upheld the established approach, according to which the assessment of the severity of the violation is carried out by the court considering the specific labor dispute, taking into account the nature of the offense, the circumstances of its commission, the form of the employee’s guilt, and the significance of the consequences.

The Supreme Court concluded that the fact that the employee entered into contracts exceeding his authority without the necessary approval of the employer was a one-time gross violation of his employment duties and, therefore, dismissal under paragraph 1 of part 1 of Article 41 of the Labor Code of Ukraine was lawful in this case.

An agreement on dismissal by mutual consent may be canceled only with the consent of the employee and the employer

No less indicative is the ruling of the Civil Court of Cassation of January 29, 2025, in case No. 947/7799/23, which considered the possibility of reinstating an employee after his dismissal by mutual agreement. 

According to the circumstances of the case, the employee independently submitted a letter of resignation specifying the specific date of termination of employment, on the basis of which the employer issued a dismissal order. However, the employee later appealed to the court, claiming that the letter had been written under psychological pressure, coercion, and threats from management. 

The courts of first and second instance found the employee’s arguments convincing, but the Supreme Court noted that dismissal by mutual agreement in accordance with paragraph 1 of part 1 of Article 36 of the Labor Code of Ukraine is the result of a mutual agreement between the employee and the employer to terminate the employment relationship. At the same time, such an agreement can only be canceled by mutual consent of both parties.

Thus, the Supreme Court upheld its previously established legal position, according to which a change in an employee’s decision regarding his dismissal does not affect the validity of the agreement reached with the employer. 

The only grounds for dismissal based on the results of a probationary period may be the employee’s unsuitability for the position for which he or she was hired

Also noteworthy is the legal position set out in the ruling of the Civil Court of Cassation of October 15, 2025, in case No. 757/26553/21-ц, in which the court focused on resolving the issue of the legality of dismissing an employee based on the results of a probationary period.

The employee was dismissed based on the results of the probationary period due to his unsuitability for the position during the probationary period on the basis of paragraph 11 of part 1 of Article 40 of the Labor Code of Ukraine. Challenging the dismissal, the employee claimed that it was carried out in violation of the terms of the fixed-term employment contract.

The Court of Appeal found that the employer had complied with the dismissal procedure and that the conclusions about the employee’s unsuitability for the position were based on the results of his performance during the probationary period.

The Supreme Court agreed with the position of the court of appeal and emphasized that the term “inadequacy” in the context of paragraph 11 of part 1 of Article 40 of the Labor Code of Ukraine means precisely the employee’s inadequacy for the position held, and not a violation of labor discipline, since an employee may be dismissed for such violations on the basis of the relevant articles of the Labor Code of Ukraine, and not on the basis of the results of the probationary period. 

Accordingly, the basis for dismissal based on the results of the probationary period under paragraph 11 of part 1 of Article 40 of the Labor Code of Ukraine can only be the employee’s unsuitability for the position for which he or she was hired. At the same time, the decision on the employee’s suitability for the position held is the right of the employer, who makes such a decision at his or her discretion based on the results of the employee’s work during the probationary period.

Before moving on to the following legal positions, it is necessary to pay attention to the important changes made to the Labor Code of Ukraine in July 2022. 

First, these are amendments to Article 117 of the Labor Code of Ukraine, which previously provided that in the event of a delay in settlement upon dismissal, the employer must pay the employee his average earnings for the entire period of delay until the date of actual settlement. The amendments made in July 2022 limited the employer’s liability for delay in settlement upon dismissal to the amount of average earnings for 6 months.

Secondly, amendments to Article 233 of the Labor Code of Ukraine limit the period during which an employee may file a lawsuit to recover wages owed to him or her. Previously, there was no time limit for such claims, but since July 2022, a three-month period has been established for employees to file a lawsuit to recover wages and other payments due to them.

Let us consider the positions of the courts regarding the application of Articles 117 and 233 of the Labor Code of Ukraine.

Average earnings during forced absence from work are considered wages, and their recovery is not limited to a period of six months

In its ruling of July 30, 2025, in case No. 185/14111/23, the Supreme Court considered the issue of the correct application of the provisions of the Labor Code of Ukraine when recovering average earnings for the period of forced absence from work.

The dispute arose from the dismissal of an employee due to staff reductions on the basis of paragraph 1 of part 1 of Article 40 of the Labor Code of Ukraine.

Having established a violation of the dismissal procedure, the court of first instance recognized the dismissal as unlawful, reinstated the employee, and recovered the average earnings for the period of forced absence, which at the time of the decision exceeded one year. The court of appeal upheld the findings of the unlawfulness of the dismissal, but reduced the amount of average earnings, limiting its calculation to six months on the basis of Article 117 of the Labor Code of Ukraine.

The Supreme Court agreed that the dismissal was unlawful but concluded that the Court of Appeal had incorrectly applied Article 117 of the Labor Code of Ukraine, as this provision regulates liability for delay in final settlement upon dismissal, rather than the procedure for compensation for forced absence. 

The Supreme Court emphasized the difference between the legal nature of average earnings for the period of forced absence and average earnings for the period of delay in settlement upon dismissal. Average earnings for the period of forced absence are wages, while average earnings for the period of delay in settlement upon dismissal are not. Wages cannot be paid to a person who is not in an employment relationship with the employer making the payment. When average earnings for the period of forced absence are paid, the person is reinstated at work from the date of dismissal, i.e., is considered to have been in an employment relationship throughout this period. Therefore, average earnings for the period of forced absence from work are, in essence, unpaid wages for failure to perform work duties through no fault of the employee, which are covered by the provisions of the legislation on remuneration.

In this dispute, Article 235 of the Labor Code of Ukraine applies, according to which if a dispute over reinstatement is considered for more than one year through no fault of the employee, the court shall rule on the payment of average earnings for the entire period of forced absence from work.

The court has the right, at its discretion, to determine the amount of average earnings for the period of delay in settlement upon dismissal, without exceeding a six-month period

A thorough position on the application of Article 117 of the Labor Code of Ukraine was formulated by the Grand Chamber in its decision of October 8, 2025, in case No. 489/6074/23.

In that case, an employee of Mykolaivgaz JSC, who held the position of director of capital construction and was a member of the company’s board, was dismissed on the basis of paragraph 5 of part 1 of Article 41 of the Labor Code of Ukraine in connection with the termination of the official’s powers. In her appeal to the court, the plaintiff demanded, among other things, the recovery of the unpaid portion of her severance pay, compensation for unused vacation time, and average earnings for the delay in the final settlement upon dismissal in accordance with Article 117 of the Labor Code of Ukraine. 

The court of first instance partially upheld the claim, while the court of appeal, after reviewing the amount of payments, reduced the amount of average earnings for the delay in the final settlement upon dismissal.

In this case, the Grand Chamber of the Supreme Court resolved an exclusive legal issue: whether the court may, at its discretion, determine the amount of average earnings for the period of delay in settlement upon dismissal, or whether it must strictly adhere to the six-month period established by Article 117 of the Labor Code of Ukraine.

After considering the case, the Grand Chamber emphasized that the six-month limitation on the period for calculating average earnings provided for in Article 117 of the Labor Code of Ukraine establishes the upper limit of the employer’s liability, which does not eliminate the court’s obligation to assess the proportionality between the amount of debt and the amount of compensation. Under such conditions, the court retains the discretion to determine a reasonable amount of average earnings without exceeding the six-month period.

In the event of a continuing violation of the deadlines for settlement with the employee, from July 2022, the calculation of average earnings for the period of delay in settlement should be limited to six months

In the context of the application of Article 117 of the Labor Code of Ukraine, taking into account the amendments made on July 19, 2022, the Grand Chamber of the Supreme Court also expressed its opinion in its ruling of November 12, 2025, in case No. 306/2708/23.

In the circumstances of this case, an employee of the State Enterprise “Financing of Infrastructure Projects” was dismissed due to staff reductions, but on the day of dismissal, full settlement with him was not carried out. In particular, a one-time severance payment for length of service was not paid. The final settlement took place only after the court decision on the recovery of wage arrears. After that, the employee filed a separate claim for the recovery of average earnings for the period of delay in settlement. 

The court of first instance dismissed the claim on the grounds that the deadline for filing a lawsuit had been missed, while the court of appeals partially upheld the claim. The case then went to the cassation court, which decided to refer it to the Grand Chamber for consideration. Among other things, the Grand Chamber of the Supreme Court decided on the application of different versions of Article 117 of the Labor Code of Ukraine to ongoing violations.

As a result, the Grand Chamber concluded that for ongoing legal relationships that arose before the amendments to Article 117 of the Labor Code of Ukraine came into force but did not end after that, from July 19, 2022, the provisions of Article 117 of the Labor Code of Ukraine in its new version should be applied and the calculation of average earnings for the period of delay in settlement should be limited to six months.

That is, for example, if an employee was dismissed from work on August 2, 2021, but as of July 19, 2022 (the date of entry into force of the amendments to the Labor Code of Ukraine), the full settlement has not been made with him, then the amounts provided for in Article 117 of the Labor Code of Ukraine should be accrued to him in the following order: from August 3, 2021, to July 18, 2022, without a six-month time limit, since the previous version of this provision did not contain any such restrictions; from July 19, 2022, to January 19, 2023 (six months, counting from the date of entry into force of the amendments to the Labor Code of Ukraine) or until the date of final settlement, if it is made before the expiration of the aforementioned six months.

An employee’s appeal to the court for the recovery of wages and other payments due to the employee is not limited by any time limit

Special attention should be paid to the decision of the Constitutional Court of Ukraine dated December 11, 2025, No. 1-r/2025 in case No. 1-7/2024(337/24), which, although not directly related to the dismissal of employees, is nevertheless of significant importance for labor disputes related to settlements upon termination of employment.

The Constitutional Court considered the constitutionality of part 1 of Article 233 of the Labor Code of Ukraine, which establishes a three-month period for an employee to apply to the court with a request to resolve a labor dispute. The basis for the review was a constitutional submission by the Supreme Court, which pointed out that such a restriction significantly narrows the content and scope of the constitutional rights of employees to apply to the court with a claim for the recovery of wages owed to them.

The Constitutional Court emphasized that although the legislature has discretion in determining procedural deadlines, in particular the deadlines for applying to the court, such a restriction should not violate the essence of the right, should be established for a legitimate purpose, achieved by proportionate means, and should be fair and objectively justified.

In addition, the Constitutional Court drew attention to the specific nature of labor relations, in particular their ongoing nature, as well as to the fact that systematic non-payment or delay in payment of wages effectively forced employees to file lawsuits every three months in order to preserve their right to protection. Such an approach, in the opinion of the Constitutional Court, violates the balance of interests of the parties to labor relations, contradicts the principle of equality, and causes legal uncertainty, which deprives the employee of effective protection of the right to timely receive remuneration for work, guaranteed by the Constitution of Ukraine.

Based on the results of its review, the Constitutional Court concluded that the contested provision of the Labor Code of Ukraine establishing a three-month period for an employee to file a lawsuit to recover wages and other payments due to the employee is inconsistent with the Constitution of Ukraine.

Conclusions

Thus, in 2025, the Supreme Court generally upheld established legal positions in cases concerning the dismissal of employees. At the same time, the Grand Chamber of the Supreme Court developed new approaches in cases concerning the recovery of average earnings for late payment upon dismissal. However, the decision of the Constitutional Court of Ukraine to declare the three-month period for an employee to apply to the court for the recovery of wages and other payments unconstitutional was truly revolutionary, which, in turn, will become the basis for the formation of a new practice of law enforcement.