20.03.2015

Mobilization-2015: New Rules for Employers and Additional Benefits for Mobilized Employees

PROCEDURE FOR COMPENSATION OF AVERAGE SALARIES PAID BY ENTERPRISES TO MOBILIZED EMPLOYEES

On 17 March 2015 the Resolution of the Cabinet of Ministers of Ukraine "On approving the Procedure for compensation payments to enterprises, institutions and organisations within average salary amounts of employees conscripted for military service through mobilization, for a special period" No.105 dated 04 March 2015 came into effect.

The Resolution was eagerly awaited by employers back in June 2014, when the relevant amendments to Article 119 of the Labour Code came into effect, giving hope for employers to obtain compensations from the state budget. The purpose of the Resolution is to establish a payment mechanism and approve the templates of documents and reports to be filed for compensation by enterprises.

Below we will consider the key provisions of the above Resolution.   

The Resolution introduces a compensation procedure for enterprises paying average salaries to employees conscripted to military service through mobilization for a maximum period of 1 year. Compensations shall be paid from the state budget.

The main administrator of budgetary funds and the main authority responsible for implementing the relevant budget program shall be the Ministry of Social Policy of Ukraine.

Budget administrators of the lower level shall be:

  • the relevant structural subdivisions for social protection of population of the AR of Crimea, of regional, Kyiv and Sevastopol State Administrations (structural subdivisions for social protection) as well as
  • the structural subdivisions for social protection of population in districts, district in the city of Kyiv state administrations, executive authorities of city councils and district councils in cities (social protection authorities).

To obtain compensations, enterprises or organizations shall file reports on the actual expenses for average salary payments in the established form with the relevant social protection authorities prior to the 15th day of each month. Such reports should be agreed with the district military enlistment office responsible for conscription of the relevant employees. Along with copies of such reports, enterprises shall file consolidated reports in the established form for all employees (consolidated reports require no approval from military enlistment offices) with the relevant structural subdivisions for social protection no later than on 19th of the relevant month. Structural subdivisions for social protection shall file documents by 23rd of each month with the Ministry of Social Policy, which shall allocate the funds for compensations. Average salaries shall be calculated in accordance with the Resolution of the Cabinet of Ministers of Ukraine No.100 dated 8 February 1995.

Unfortunately, the Resolution refers only to current payments, without addressing the issue of salaries already paid starting from March/April 2014. We expect that the relevant official clarifications regarding this matter as well as that of taxation, accrual and payment of the single social contribution from amounts of both compensations and salaries will be published in the nearest future.

ADDITIONAL SAFEGUARDS FOR EMPLOYEES WHO DID MILITARY SERVICE DUE TO MOBILIZATION

Apart from that, the Parliament of Ukraine has extended the job retention period for mobilized employees by six months (the overall period will be 18 months), having passed the Bill on amendments to some laws of Ukraine regarding the improvement of certain matters of mobilization and social protection for Ukrainian citizens subject to discharge from military service during the special period or due to declared demobilization (Bill No.2283) into law. The Law has been adopted in whole on 18 March 2015 and is pending the President’s signature.

Also, the Law stipulates that job retention and average salary payment safeguards shall be preserved for the hospitalized wounded, captured and missing persons up to the day following the day of their military registration with the military enlistment offices after discharge from military service, in the event of treatment completion, regardless of the treatment duration, their return from captivity, their appearance after being deemed missing or before the date of their being deemed dead by the court.

Additionally, the law amends the Labour Code. According to the amendments,   demobilized employees are preferentially entitled to retain their jobs in case of redundancy and are granted additional employment promotion safeguards and annual leaves of full duration before the expiration of six months of continuous work in the first year at the relevant enterprise at their request as well as other guarantees.

The text of the bill may be found here.

As soon as the official text of the adopted law is published, we will provide our additional comments to employers. Please follow our news updates.

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Kind regards and best wishes,

Pavlo Khodakovsky

Partner, Head of Labour Practice

Alesya Pavlynska

Senior Associate at Labour Practice