Law of Ukraine

"On Amendments to Certain Legislative Acts of Ukraine to Protect Investor Rights"

Date of entry into force:
June 1, 2014

The Law amends Article 41, part 1 of the Code of Labor Laws of Ukraine by supplementing the list of additional reason to terminate the labor agreement by initiative of the owner or a body authorized by the owner, with a new reason termination of authority of officials.

According to the Law, if a labor agreement is terminated for the above reasons, the minimum amount of severance pay is equivalent of six average monthly salaries (amended Article 44 of the Code of Labor Laws of Ukraine).

The Law presents a new version of Article 130, part 4 of the Code of Labor Laws of Ukraine, according to which:
  • employees cannot be made to bear liability for damages included in the category of normal production and economic risk, or for damages caused by an employee in a state of extreme necessity;
  • only employees who are officials can be made to bear liability for lost income of a company, institution or organization.

For damages caused by a company, institution or organization in the course of performing labor duties, employees (except employees who are officials) culpable of such damage shall bear material liability in the amount of direct actual damage, but not exceeding their average monthly earnings (amended Article 132, part 1 of the Code of Labor Laws of Ukraine).

According to amended Article 133, paragraph 2 of the Code of Labor Laws of Ukraine, limited material liability shall be borne by heads of companies, institutions and organizations, and their deputies, as well as heads of organizational units of companies, institutions and organizations, and their deputies in the amount of damages caused through their fault, but not exceeding their average monthly earnings, if the damages were caused to the company, institution or organization through excess monetary payments to employees, incorrect recording and storage of material, monetary or cultural valuables, or failure to take necessary measures to avoid down time.

The Law amends Article 89, part 4 of the Economic Code of Ukraine to exclude the provision, according to which the scope and procedure for liability of officials for damages they caused to a business entity can be provided for in the constituent documents of the company.

The authority of a member of a company's executive body can be terminated at any time, or such member can be temporarily removed from exercising their authority (new version of Article 99, part 3 of the Civil Code of Ukraine).

According to amended Article 51, part 3 of the Law of Ukraine "On Joint Stock Companies", the work procedure of members of the supervisory board and the procedure for their compensation are determined by this law, the company's statute, the provision on the supervisory board of the joint stock company, and by a civil or labor agreement (contract) concluded with a member of the supervisory board. On behalf of the company, such agreement or contract is signed by the head of the executive body or by another person authorized by the general meeting, on the terms approved by resolution of the general meeting. If a civil agreement is concluded with a member of the supervisory board, such agreement can be paid or free of charge.
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