Draft Labour Code: small business and employees’ rights

The draft Labour Code proposes a number of new elements in regulating the work of employees in a small business. A special category is introduced of “small enterprises” (up to 20 members of staff) with special conditions of regulation.

These conditions are much less favourable than those for other employees.

For example, the Code envisages that employees at those enterprises shall be given at least 2 weeks notice of dismissal (Article 303 § 2). The same article (§ 1) envisages a two week timeframe for notification of change in important conditions of the contract of employment. Changes in pay must be notified a month in advance.  According to present legislation, the period is 2 months. The draft Labour Code is effectively, therefore, imposing discriminatory conditions of work depending on the place of employment.

Some norms in the draft give owners of small enterprises more power over their staff.  Article 301 § 1 states that they singlehandedly approve the internal labour regulations.  According to Article 142 § 1 of the Code of Labour Laws, these regulations are approved by the staff and the trade union at the employer’s submission.  A small business employer will also have the right to independently establish the work regime with this envisaging work on ordinary weekends, public and religious holidays (Article 233). These worsen the position of those working in small businesses as compared with current legislation.

Some provisions clash with current laws.  There is no requirement regarding employment of people needing social protection, nor the disabled (Article 302 § 1).  At present employers are obliged to provide special places for the disabled at businesses employing at least 8 people. Article 19 of the Law on the Fundamental Principles of Social Protection of the Disabled in Ukraine obliges employers with less than 8 members of staff to create at least one job for a person with disabilities.

The “special” conditions threaten yet another category of employees in need of social protection, that being minors. The draft Labour Code allows the dismissal of underage employees of small enterprises without the agreement of the Service on Children’s Affairs (Article 303 § 4).

The justification provided for the above-mentioned changes is that in such working places contractual relations between employees and the management will have more weight.  It is also asserted that the removal of a number of social obligations will simplify the procedure for managing a firm and stimulate small business. However it would seem that in the given case the principles of State policy in the sphere of business enterprise unwarrantedly dominate over the principles of protection of labour rights. This could lead to a reduction in the scope of rights and the level of protection of those employees.

Such norms are therefore unlikely to fulfil the aims which the government avows, particularly given that there are no guarantees regarding employer integrity.