Employment Termination: Employment termination in Ukraine refers to the lawful ending of an employment relationship, regulated by the Labour Code of Ukraine (Kodeks zakoniv pro pratsyu), which sets out strict procedures, notice periods, and grounds for dismissal.
Employment termination in Ukraine is tightly regulated by the Labour Code (Kodeks zakoniv pro pratsyu Ukrainy, KZpP), which has been in force since 1971 and has been amended extensively, including major reforms in 2022-2023. The Labour Code lists the permissible grounds for dismissal exhaustively — an employer cannot dismiss an employee for a reason not specified in the Code. Common lawful grounds include: mutual agreement, end of a fixed-term contract, employee initiative (resignation), employer initiative (redundancy, systematic failure to perform, serious misconduct), and circumstances beyond the parties' control (incapacity, court conviction).
Dismissal at the employer's initiative (Article 40 of the Labour Code) is the most regulated category and the most likely to give rise to disputes. Valid grounds include: liquidation of the company or reduction of the workforce (skonochennya shtatu), systematic failure to fulfil duties without valid excuse, absence from work for more than four consecutive hours without excuse, appearance at work in a state of intoxication, and theft of employer's property. Each ground has specific procedural requirements that must be strictly followed, otherwise the dismissal is unlawful regardless of the substantive reason.
Notice requirements vary by ground: for redundancy (staff reduction), the employer must give the employee at least two months' written notice and simultaneously notify the State Employment Service. During the notice period, the employee must be offered any suitable vacancies in the company. For dismissal due to misconduct, no advance notice is required, but the employer must complete a formal investigation procedure including obtaining a written explanation from the employee before any dismissal decision is made.
Dismissed employees are entitled to severance pay (vygidna dopomoha) in cases of redundancy, amounting to at least one average monthly wage. Employees with long service are entitled to higher severance. Upon any termination, the employer must issue a final settlement (rozrakhunok) on the last working day covering all outstanding wages, unused vacation compensation, and any other amounts owed. Delay in the final settlement entitles the employee to compensation at the rate of the employee's average daily wage for each day of delay.
Disputes over dismissal are heard by the district courts (rayonni sudy) under the Labour Code's special labour dispute provisions. If a court finds a dismissal unlawful, it will order reinstatement and back-pay for the period between dismissal and reinstatement. In practice, many Ukrainian employment disputes are settled before trial. Since the introduction of martial law in February 2022, additional rules apply to termination during the period of mobilisation, including restrictions on dismissing employees called up for military service.
Key Facts About Employment Termination in Ukraine
- The Labour Code (KZpP) lists permissible grounds for dismissal exhaustively — employers cannot dismiss outside these grounds.
- Redundancy requires two months' written notice and simultaneous notification to the State Employment Service.
- Final settlement (all outstanding wages and compensation) must be paid on the last working day.
- Dismissed employees receive severance pay of at least one average monthly wage in redundancy cases.
- Unlawful dismissal entitles the employee to reinstatement and full back-pay by court order.
Frequently Asked Questions
Can an employer in Ukraine dismiss an employee during sick leave?
No. Under the Labour Code, an employer cannot dismiss an employee during temporary incapacity (sick leave) or during maternity leave, except in the case of complete liquidation of the enterprise. Any attempt to dismiss during sick leave is automatically unlawful. Employers must wait until the employee returns to work before initiating dismissal procedures, even for misconduct that occurred before the sick leave began.
What happens to employment contracts during martial law in Ukraine?
Since the declaration of martial law in February 2022, special legislation has modified some standard Labour Code rules. Employers can temporarily suspend work (without terminating contracts) and reduce notice periods in certain circumstances related to combat activity. Employees called up for military service cannot be dismissed and have the right to return to their position after demobilisation. The rules are updated frequently and should be checked with a Ukrainian employment lawyer for current compliance requirements.
How is unused annual leave compensated on termination in Ukraine?
Upon any termination — regardless of the ground — the employer must pay cash compensation for all unused annual leave entitlement accrued but not taken. Unused leave compensation is calculated based on the employee's average daily wage for each unused day. There is no cap on the number of unused leave days that must be compensated, so employees who have not taken leave for several years may be entitled to significant compensation on termination.