On July 19, 2022, the Verkhovna Rada of Ukraine adopted the Law “On Amendments to Certain Legislative Acts Regarding the Simplification of the Regulation of Labor Relations in the Sphere of Small and Medium-Sized Businesses and the Reduction of the Administrative Burden on Entrepreneurial Activities” (known as Draft Law No. 5371) as a whole.
In particular, the Law allows amendments to the Code of Labor Laws of Ukraine, according to which a contractual regime for the regulation of labor relations is introduced. It will be applied to labor relations between:
- employees and employers - subjects of small and medium-sized businesses;
- or businesses with up to 250 employees;
- or an employer and an employee whose salary is more than 8 minimum wages per month.
Today, a real mini-revolution has happened in the labor legislation of Ukraine, because the newly adopted Law gives citizens the right to regulate the terms of the contract with employers themselves, as well as the opportunity to fulfill themselves in market conditions, selling their hired labor for a high salary. The free labor contract will provide for the result instead of for the work process.
Small and medium-sized businesses will finally be devoid of the Soviet bureaucratized labor legislation, which currently contains an outdated system of rationing and payment of labor, accounting for working hours and the granting of vacations, excessive complexity of current personnel accounting procedures, etc. Finally, there is a chance for business to get a new legal mechanism that will correspond to the realities of the market economy and will provide an opportunity to significantly simplify labor relations between business entities and employees. It is of utmost importance for the development of IT business in Ukraine,- Yefrem Laschhuk, Director of Political and Legal Affairs, IT Ukraine Association
We would like to remind that the IT Ukraine Association, together with the Ukrainian Business Council and the Office of Simple Solutions and Results, initiated the draft Law No. 5371 aimed at implementing the principle of employment contract freedom.