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Redundant Employees

  1. In many cases, a company wishes to move an employee from one position or another for various reasons. Article 32 of the Labor Code of Ukraine provides that the transfer of an employee to another job (position) within the same company, organization or institution may be carried out only upon the employee's consent. Therefore, it is not possible to transfer such employee to another job (position) on a compulsory basis. The transfer of employee to another workplace will not be deemed as a transfer to another job (position) in case such employee continues working according to his specialization, qualification or position.

  2. This being said, however, a company may decide to reorganize its workforce, thereby making a certain position redundant along with the employee in such position. In such case, the employee roust be informed about a change of his or her work position (work terms, specialization, etc.) at least 2 months prior to the introduction of such change. If the employee refuses to accept the new position due to the change of the work conditions or qualification requirements, the employer will have grounds to dismiss the employee. Importantly, for those companies seeking to use this provision of the Labor Code to "downgrade" employees, the change of position within the company must be legally documented, and the employee's salary cannot be decreased in comparison to their former salary. Obviously, in some cases, "downgrading" may not serve the purpose of enticing an employee's refusal to accept another position within the company should the amount of salary be the only car 5 on the employee's mind.

  3. In addition, Article 116 of the Labor Code of Ukraine provides that the dismissed employee must be paid any monies due to him or her by the employer on the day of dismissal. If the employee is absent from work on the final day, the above sum must be paid no later than the next day after the employee makes demand for payment. If the employer does not make timely payment, the employer must pay the employee's average salary for the entire time of the delay until final settlement is actually made.

  4. Terminating an employee due to redundancy is also permitted in case of changes in the production or labor organization of an enterprise, institution or organization (in most cases staff reduction due to specific reasons). Article 49-2 of the Labor Code provides that an employer must personally give an employee 2 months notice before such employee is made redundant. Simultaneous with the notice, the employer (owner) or its authorized body must offer the employee alternative work in its enterprise, institution or organization. If no work is available at the employer's enterprise, institution or organization, or if the employee refuses alternative work, the employee may independently seek assistance at the state employment service. At the same time, the employer must notify the state employment service upon making an employee redundant, indicating the employee's profession, field of specialty, qualifications and salary.

  5. Ukrainian legislation sets forth a priority list for dismissal of redundant employees. In accordance with Article 42 of the Labor Code of Ukraine, in case of staff reduction due to changes in the production and labor structure, the following persons will have preferential rights to continue their work with the employer:

  6. (a) married persons who have two or more dependants;

  7. (b) persons whose families do not have other members with independent salaries;

  8. (c) employees with a long length of experience at the enterprise subject to production and labor re-organization;

  9. (d) employees who simultaneously work and stud;/ in higher or secondary scientific institutions;

  10. (e) military veterans, invalids of wars and individuals who are subject to the Law of Ukraine "On the Status of Veterans of War, Guarantees and Social Securities;"

  11. (f) authors of inventions, utility models, industrial designs and rational proposals;

  12. (g) employees from the enterprise who received work-related injuries or sicknesses;

  13. (h) persons deported from Ukraine within 5 years of the date of their return to their permanent residence in Ukraine;

  14. (i) employees, who have formerly served in the military or have served in other alternative (non-military) organizations, within two years from their completion of service; and

  15. (j) other individuals who have such rights in accordance with special legislation.

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