ARZINGER won a final victory in a complex labour dispute with the former chairman of the board of a financial institution
ARZINGER won a final victory in a complex labour dispute with the former chairman of the board of a financial institution.
The ARZINGER team successfully defended the interests of a mortgage refinancing company, established with the participation of several Ukrainian state-owned banks, in a labour dispute brought by its former head seeking to recover UAH 4.6 million in remuneration that he had arbitrarily set and accrued for himself.
The dispute arose because the former chairman of the board, without the proper authority, changed the staffing table, independently setting himself a different salary and accruing it for several years in violation of the terms of his employment contract. After his dismissal, a lawsuit was filed to recover the allegedly underpaid amount of the changed salary.
The Supreme Court upheld the decision of the lower court, emphasising that:
- the terms of remuneration are determined exclusively by the employment contract;
- internal orders or staffing tables cannot change its terms without duly formalising changes to the employment contract;
- a reservation about the possibility of increasing/decreasing wages does not create an automatic right to such possible wages without amending the employment contract.
This conclusion of the Supreme Court is of precedential significance as it establishes key factors for determining the amount of remuneration for employees and managers of an enterprise, and is also prejudicial to a number of other cases related to this dispute concerning the unlawful accrual of remuneration totalling over UAH 35 million.
The ARZINGER team working on the case consisted of counsel Andrii Tyshchenko, senior associate Ivan Zalizniak, junior associate Yana Nesterenko, and head of the labour law practice Kseniia Lotosh, under the overall supervision of founding partner Sergii Shkliar, with the participation of former counsel Ievgen Diadiuk and former senior associate Iryna Hutnik.