The question of labor contracts in Ukraine at the legislative level is regulated by the Labour Code dated 20 December 1971 (hereinafter – “the Code”) and other subordinate legislation. Part 1 of Article 23 of the Labour Code defines a contract as a special form of employment agreement in which its validity, rights, duties and responsibilities (including financial), conditions of material support and organization of work the employee, termination conditions, including including early termination of the contract, may be established by the parties.
Conditions of the contract, which worsen the situation of employee in comparison with current legislation, agreements and collective agreements shall be deemed invalid.
The conclusion, content and termination of the contract is determined by the Decree of the Cabinet of Ministers of Ukraine “On regulation of the use of contractual forms of employment agreement” dated 19 March 1994 (hereinafter – “the Decree”).
According to Article 24 of the Code of the contract concluded in written form and signed by employer and employee, whose host (hired) to work under the contract. The contract is made in two copies which has equal legal force and are stored in each of the parties to the contract. The contract comes into force upon signature or the date specified in the contract by the parties and can be changed by parties agreement, drawn up in writing form.
The contract is the basis for issuing an order (direction) of acceptance (hiring) the employee from the date specified in the contract by agreement of the parties. The employer must ensure the confidentiality of contract.
The paragraph10 of the Decree provides сontent of the labor contract. The contract provides for volumes of the proposed work and requirements for quality and timing of its implementation, the term of the contract, rights, obligations and mutual responsibilities of the parties, payment terms and organization of work, grounds for termination and breach of contract, social, domestic and other conditions necessary for fulfillment of all obligations of the parties, subject to specific work, professional features and financial capabilities of enterprise (institution) or employer.
In Ukraine, approved standart form of contract with the employee (Order of the Ministry of Labor of Ukraine “On approval form contract with the employee,” dated 15 April 1994) according to which the contract may be recorded special conditions in certain occupations and types of work. The contract may provide additional benefits, guarantees and compensation is not determined by the applicable law, at the expense of the employer. By agreement of the parties in the contract can be determined and other conditions of work necessary to comply with the obligations assumed by the parties.
The paragraph17 of the Decree said that the contract may be determined additional grounds for termination than prescribed by applicable law.
Scope of contract conclusion defined by a list of laws which permitted to compile an employment agreement as a labor contract. The list of such laws established by the Letter of the Ministry of Labour and Social Policy of Ukraine “On the contract form of employment contract and the list of laws which permitted its use” dated May 6, 2000 (hereinafter – “the Letter”). According to the Letter the owner or its authorized body may request from employee, who works for unlimited contract to compile contract only if it belongs to the category of employees under the laws of Ukraine who work under the contract.
Awarded contract in cases not covered by the laws of Ukraine shall not be permitted because it reduces the level of social protection of employees and contrary to the requirements of the Convention of International Labour Organisation (ILO) № 158 (1982), ratified by Ukraine in February 4, 1994.
Now in Ukraine there are over fifty normative acts that establish a circle of employees, which can be contracted.
Today in Ukraine is often entered into contracts with such workers:
with business leaders (prg.4 art.65 of the Commercial Code of Ukraine). This position may have a different name – director, chief executive officer (CEO), manager, supervisor, plant manager, etc.
with heads of agencies and organizations that are state property and not categorized as goods (Articles 2 and 4 of Decree of the Cabinet of Ministers “On the property management that is in the national ownership”);
with heads of agencies and organizations that are state property (art.2 and 4 of Decree of the Cabinet of Ministers “On the property management that is in the national ownership”);
with scientific and pedagogical workers of preschool, secondary educational institutions, educational institutions for people in need of social assistance and rehabilitation, higher education institutions, postgraduate educational institutions (art. 54 of the Law of Ukraine “On education “)
with employees of Commodity Exchange (art.12 of the Law of Ukraine “On the Commodity Exchange”)
with employees of collective agricultural enterprises (art.19 of the Law of Ukraine “On the collective agricultural enterprise”)
with employees of the farm enterprise (art.22 of the Law of Ukraine “On farm enterprise”
with assistant attorneys (Law “On Advocacy”), and others.
In case of non-fulfillment of the obligations stipulated in the contract, it may be prematurely terminated with notice of the party in two weeks.
The contract is subject to termination prematurely at the request of the employee in the event of illness or disability that prevent them from performing work under the contract, the employer violations of labor legislation, failure or improper performance of employer obligations under the contract, and for other good reasons.
The contract by agreement of the parties may be extended or made for a new term for two months before the expiry.
Feature of the contract is that it can be determined by its validity, and that it sets out the rights, duties and responsibilities, and the terms of material welfare and working conditions of employees. If applicable law does not provide the possibility of concluding the contract, the owner and an employee may not sign a contract, even though it was compiled with full consent of the parties and without any pressure from the owner.