Ukraine: New Regulation on Labour Law Inspection Visits

On 16 May 2017, the governmental regulation regarding labour inspection visits entered into legal force (‘Labour Inspections Regulation’).

The Labour Inspections Regulation provides for a procedure for inspectors of the State Employment Service of Ukraine (SES) and inspectors of the local authorities to carry out inspections of businesses to ensure compliance with labour law in the form of announced or unannounced dawn raids or remote inspections.

Under the Labour Inspections Regulation, inspections may be undertaken, among other cases, based on:

• complaints from employees or individuals whose employment relations are not properly formalized;
• information on alleged violation available in the public domain or received from law enforcement authorities or the court;
• information on alleged labour law breaches received from the State Fiscal Service of Ukraine, the State Statistics Service of Ukraine, or the State Pension Fund of Ukraine.

During the inspection the inspector, among other things, has a right to:

• examine any documents and records relating to the terms and conditions of employment;
• conduct an overview of the work premises with unlimited access in certain cases to any production, administrative or other staff areas;
• interrogate employees about various topics, including matters discussed in confidential meetings.

An employer may prevent an inspector from visiting in a very limited number of cases, for example in the event that the inspector fails to show his/her ID or if the ID is not in the correct form.

If during the inspection any breaches of labour law are identified, the inspector may issue a remedy order. If the employer rectifies such breaches during the term provided in the penalty order, no penalties will apply. The only exception is for hard-core labour law breaches (such as a breach of salary payment rules, undocumented de-facto employment) for which the remedy order is issued along with the penalty.

The new procedure demonstrates a push to ensure employers' compliance with labour law rules and standards. In light of the foregoing and recently increased fines for labour law breaches (for more information please refer to our previous law-now), we recommend businesses revise their labour policies and practices to make sure they comply with the statutory requirements and prepare their personnel for possible labour law dawn raids and audits.

Legislation: Resolution of the Cabinet of Ministers of Ukraine No 295 dated 26 April 2017 On certain questions of application of Article 259 of the Labour Code of Ukraine and Article 34 of the Law of Ukraine On Local Self-government in Ukraine