Employment contract: everything an employee and employer need to know

An employment contract is a document that guarantees employees proper working conditions. What are the peculiarities of an employment contract and how is it concluded? What are the new regulations for concluding employment contracts during martial law? This is what we will discuss in this article.

What is an employment contract?

An employment contract is an agreement between an employee and an employer (the employer being an individual), under which the employee undertakes to perform the work specified in the agreement, and the employer (the employer being an individual) undertakes to pay the employee wages and to provide the working conditions necessary for the work to be performed, as provided for by labor legislation, a collective employment agreement and the agreement of the parties.

Article 21 of the Labor Code of Ukraine

The current legislation allows for the conclusion of employment agreements in oral or written form. In particular, Art. 2 of the Law of Ukraine “On Organization of Labor Relations under Martial Law” stipulates that the form of an employment agreement is determined by mutual agreement.

At the same time, Article 24 of the Labor Code provides for a list of cases in which the written employment contract is mandatory:

• organized recruitment process;
• conclusion of a contract for working in areas with special natural, geographical, geological conditions and conditions of increased health hazards
  conclusion of a contract;
• if the employee insists on it;
• conclusion of a contract with a person under age;
• conclusion of an employment contract with an individual;
• conclusion of an employment contract for working remotely or from home;
• conclusion of an employment contract with non-fixed working hours.

The above list is not exhaustive. The requirement that an employment contract be in writing may also be contained in other regulations.

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Types of employment contracts

The following terms and conditions of employment contracts are established in Article 23 of the Labor Code:

• Open-ended employment contract concluded for an indefinite period of time;
• Fixed-term employment contract, concluded for a specified period of time as agreed by the parties;
• Temporary employment contract, concluded for the period of performance of specific work.

Open-ended employment contract

The employment contract is usually concluded for an indefinite period of time. It is deemed to be for an indefinite period unless the parties agree otherwise. The contract is valid until the employee is dismissed.

Fixed-term employment contract

A fixed-term employment contract is concluded in cases where the employment relationship cannot be established for an indefinite period of time, taking into account the nature of the work to be performed, the conditions of its performance, the interests of the employee, and in other cases provided for by law (Art. 23, para. 2, item 1 of the Labor Code).

A fixed-term employment contract is considered terminated upon its expiration at the request of the employer or the employee (Art. 36, para. 2, item 1 of the Labor Code). If neither party requests such termination and the employment relationship continues, it is extended for an indefinite period (Article 391 of the Labor Code).

Temporary employment contract

Para. 3 of Art. 23 of the Labor Code provides for the possibility of concluding an employment contract for the period of performing certain work. Upon completion of the work, such a contract is considered terminated.

Zero-hours contraсt

This is a special type of employment contract that has no specific time limit for the performance of work. The employer does not guarantee that the work will be provided on a permanent basis, but undertakes to comply with the terms and conditions of remuneration.

The employer independently determines the necessity and timing of the employee’s work, the scope of the work, and, within the period stipulated in the employment contract, agrees with the employee on the work schedule and the duration of the working time necessary for the performance of the work. The employer shall also comply with legal requirements regarding the duration of working time and rest periods (Art. 21-1 of the Labor Code).

Gig Contract

A gig contract is a unique form of collaboration with specialists that combines the elements of an employment and civil law contract. Under a gig contract, an employee is not hired, but invited to participate in a specific project where they complete the tasks within the allotted time frame.

How to conclude an employment contract?

Firstly, it is essential that the employer and employee agree on the form of the employment contract. If they conclude an oral agreement, the employee must provide his or her written consent (usually in the form of an application for employment).

If it’s a written contract, the employee doesn’t need to sign a consent form. They only have to sign the contract itself.

Who is responsible for signing the employment contract?

Once an employment contract has been finalized, it is signed by the head of the organization. Subsequently, the employee signs the contract.

The written form of an employment contract is equivalent to the electronic form. This is covered in Articles 205 and 207 of the Civil Code of Ukraine.

To conclude a contract in electronic form, an employee must provide an electronic signature. The Law of Ukraine “On Electronic Identification and Electronic Trust Services” considers a qualified electronic signature (QES) and an advanced electronic signature (AES) to be equivalent to a handwritten signature, which can be used unless otherwise required by law. An employment contract signed with the use of an electronic signature has full legal force.

Vchasno offers Vchasno.KEP, a convenient service for the electronic signing of employment contracts and other legally significant documents. An electronic signature includes a time stamp that can be used to determine the time of signing an employment contract. The data is stored in a secure cloud storage facility. .

Vchasno.KEP is designed to integrate seamlessly with other services within the Vchasno ecosystem. For instance, you can send a signed employment contract to a partner in Vchasno.ODE in just a few clicks. This lets you sign contracts and keep all your HR documents in one place, no matter where you are.

How long is the probationary period?

In an employment contract, the parties may agree to a probationary period. This period allows the employer to assess the employee’s compliance with the assigned work (Article 26 of the Labor Code). During a period of martial law, the employer may impose a probationary period on any category of employees (Article 2(2) of the Law of Ukraine “On the Organization of Labor Relations under Martial Law”).

In accordance with Ukrainian legislation, the probationary period for new employees may not exceed three months, unless otherwise stipulated. In certain instances, upon agreement with the relevant elected body of the primary trade union organization, the probationary period may extend up to six months (Article 27 of the Labor Code).

Employment contract sample form

The legislation in Ukraine does not define the form of a standard employment contract. Each company that hires employees under employment contracts develops its own contract. Nevertheless, standard forms approved by government agencies may be utilized. For instance,

• the form of an employment contract between an employee and an individual who uses hired labor (Order of the Ministry of Labor and Social Policy of Ukraine No. 260);
• standard form of contract with an employee (Order of the Ministry of Labor and Social Policy of Ukraine No. 23);
• standard form of contract with the head of a state-owned company (Resolution of the Cabinet of Ministers of Ukraine No. 597).

Modifying the terms and conditions of an employment contract

Article 31 of the Labor Code states that the owner or his/her authorized representative has no right to require an employee to perform work not covered by the employment contract. Consequently, the terms and conditions of the employment contract may only be amended by mutual consent of the parties.

During the period of martial law, the employer has the right to transfer an employee to another job not stipulated by the employment contract without his/her consent (except for transfer to another area where active hostilities are ongoing), if such work is not contraindicated for the employee’s health condition, only for the purpose of preventing or eliminating the consequences of hostilities, as well as other circumstances that pose or may pose a threat to the life or normal living conditions of people, with remuneration for the work performed not lower than the average salary for the previous job (Art 3 of the Law of Ukraine “On the Organization of Labor Relations under Martial Law”).

In the event that the employer is unable to maintain the previous essential working conditions and the employee is unwilling to continue working under the new conditions, the employment contract will be terminated in accordance with Article 36(6) of the Labor Code.

How to extend an employment contract

In accordance with Article 39¹ of the Labor Code, if the employment contract is not terminated after its expiration, and the employment relationship continues, the contract is deemed to be extended for an indefinite period.

If both parties wish to continue working under a fixed-term contract, they must sign an additional agreement on the employee’s last day of work. The employee may also submit a written application. Consequently, an order is issued to extend the term of the employment contract.

Termination of an employment contract

Either the employer or the employee may initiate the termination of an employment contract. The grounds for termination of an employment contract are set forth in Article 36 of the Labor Code.

An employee has the right to terminate an employment contract concluded for an indefinite period by providing the owner or his authorized body with written notice of their intention to do so at least two weeks in advance (Article 38 of the Labor Code).

During a period of martial law, employers are permitted to suspend an employment contract without terminating the employment relationship.

The suspension of an employment contract is a temporary cessation of the employer’s provision of employment to an employee and a temporary cessation of the employee’s performance of work under the concluded employment contract. In the event of military aggression against Ukraine, an employment contract may be suspended due to the impossibility of providing and performing work.

Article 13 of the Law of Ukraine “On Organization of Labor Relations under Martial Law”

Either party may initiate the suspension of an employment contract. The suspension of an employment contract may be applied for a period not exceeding the period of martial law. The employer shall issue an order to suspend the employment contract, which shall include the following information:

• reasons for the suspension;
• the period of suspension;
• the list of employees with whom the employment contract is suspended;
• the employees’ RNOKPP (taxpayer identification number);
  terms and conditions for resumption of the employment contract.

The employer is responsible for ensuring that the employee is aware of the order on the suspension of the employment contract. To that end, the employer agrees with the employee on a method of communication that is acceptable to all parties.