Ukraine to have updated Labour Code: Government approves decision

Today, at its session, the Government approved the draft Labour Code of Ukraine, which is expected to kick-start labour market reform. This was announced by Prime Minister of Ukraine Yulia Svyrydenko.

"The Ministry of Economy, Environment and Agriculture team has worked on the document for over two years — in partnership with businesses, trade unions, scientists, and with the participation of international partners. I had the opportunity to initiate and coordinate this process while serving as Deputy Prime Minister. I am happy that the team has successfully completed an important stage for the launch of the reform," Yulia Svyrydenko said.

The Head of Government stressed that the new Labour Code takes into account the structure of the economy, employment formats and the needs of employers and employees, and establishes clear rules for labour relations. She recalled that the labour market in Ukraine still operates under the Labour Code of 1971.

"The updated Labour Code is one of the key steps in implementing the Employment Strategy until 2030, which the Government also adopted today during the meeting. We want to make the labour market more inclusive and get people who are often left out of the market today, like women, young people, veterans, and people with disabilities, involved in economic activity," the Prime Minister said.

What's changing?

• The Code establishes clear criteria for employment relationships. The document defines eight criteria for employment relations. This will help reduce legal uncertainty and bring employment out of the shadows. Preliminary estimates of the de-shadowing of the labour market amounts to – UAH 43 billion per year.
• Flexible employment contracts. The types of employment contracts will increase from 6 to 9. The Code clearly regulates modern forms of work: remote, home-based, and flexible working hours. In addition, employees will have the option to enter into several types of employment contracts with their employers.
• Digitalisation of labour relations. Electronic documents are equivalent to paper documents in labour relations.
• A transparent mechanism for determining the minimum wage, both monthly and hourly, in line with EU standards. The minimum threshold will be determined as a percentage of the average wage, which shall be set by the Government.
• Flexible working arrangements for employees with children. The Code establishes the right to flexible forms of work (remote work, work from home). It also provides more opportunities for parents. For example, it extends the rights of both parents to take leave to care for a child: both the mother and father will be allowed to take two months of leave.
• Reform of labour inspection: a risk-based approach to inspections is introduced.
• More employment opportunities for young people. In particular, the Code introduces a separate mechanism for safely combining education and first job – an apprenticeship contract.

Yulia Svyrydenko also stressed that the adoption of the Code is an important step towards further European integration. The document provides for the implementation of more than 30 EU directives, regulations and ILO conventions.

The Head of Government expressed her special gratitude to Tetiana Berezhna, who had been working on the document in her previous position, Oleksii Sobolev, Daryna Marchak, and the current team at the Ministry of Economy, Environment and Agriculture for their consistent work on this reform.

"The next step is to consider the draft in the first reading in the Parliament. We count on the support of MPs and constructive work on the document in between readings," Yulia Svyrydenko emphasised.