The Future is Now: The New World of Work in Ukraine

As a result of the COVID-19 pandemic and measures put in place in response, countries around the world – including Ukraine – have adopted new innovations in the area of employment in a bid to keep their workers safe and productive. One such innovation is work from home.

More than a year after the pandemic began, home-office work has proven so effective, many believe it will become a fixture of our post-pandemic future. But remote work raises a host of legal and administrative challenges. This article – based on the 13 April 2021 webinar The Future is Now: The New World of Work in Ukraine and hosted by legal experts Mykola Heletiy and Oleksandra Prysiazhniuk with CMS Ukraine – explores the impact of 'remote work' in Ukraine for both workers and companies.

The changing face of work in Ukraine

The internal shift towards remote work triggered by the COVID-19 pandemic has also been keenly felt in the Ukraine, says labour law expert Oleksandra Prysiazhniuk, a Senior Associate with CMS Ukraine. Quarantine orders and restrictions imposed by the Ukrainian government to protect its citizens has prompted scores of Ukrainian companies and employees to turn to home offices as a means of continuing business operations.

In response, explains CMS's Prysiazhniuk, the Ukrainian government changed the provisions of the Ukrainian Labour Code to allow for remote and home work. Basically, Ukrainian labour law defines "home work" in the way that is similar to many other jurisdictions around the world: work performed by an employee at the individual's home (i.e. in a fixed predetermined "zone") away from the employer's premises.

"Remote work", however, may be performed at any location outside of the employer's offices, according to Ukrainian law.

Status of home workers

"There are no limitations on which types of employees who may be home workers", explains CMS's Prysiazhniuk, if their operations can be transferred to the home environment.

In some instances, employees can request a home-working relationship if their personal circumstances require their presence at home (e.g. they are new parents, care givers to disabled children, etc.). Workers in this situation have the right to work from home if it is "practically possible".

According to Ukrainian law, 'home workers' enjoy the following status:

• They have the same rights as regular employees within the terms set by the employment agreement;
• They should receive the same salary as regular employees;
• Their home office is considered their fixed workplace from which they should conduct all operations as specified in their employment contracts;
• A home worker cannot unilaterally change the location of a home office, unless faced with an emergency beyond the individual's control;
• A home worker can ask the employer for permission to change the location of the home office, which the employer can refuse (but only with a justifiable reason).

The regulation of home work

The legal basis for home work in Ukraine can be found in the Labour Code (which also contains provisions on remote work), and a 1981 law (which in many ways is outdated but still contains clauses applicable to the modern home-working arrangement).

The provisions of the Labour Law that apply to home working include labour-protection provisions and laws on labour payments. Also, there are international legal instruments recognised in Ukraine, which regulate home working.

Formalising home work

In normal circumstances, home working provisions should be included in a worker's employment agreement. If a state emergency occurs, such as the current pandemic, an employer can implement a home-working arrangement among its employees without modifying the employment contracts of each staff member.

In non-emergency situations, when home working is specified in employment agreements, these contracts should contain the following:

• Specific provisions enabling the creation of a home office, which address issues such as vacations, and resolutions of conflicts.
• The address of the home office, since listing the location is linked to the employer's obligation to ensure that the home office meets all state health and safety requirements.
• Provisions so that the home office meets acceptable levels of health and safety as stipulated by Ukrainian law.
• To ensure these provisions are being met, the ability to conduct health-and-safety inspections of the home office in line with the 1981 law. All provisions surrounding inspections (when and how they are to be implemented) should be specified in the employment agreement. Inspections, however, cannot be conducted unless an employee complies with this provision. If a worker fails to comply, home work cannot be implemented and the worker will be classified as a remote worker and assume the obligations of this status.
• The official means of communication between employer and employee (e.g. telephone, email, video conferencing), which is the choice of the employer.
• The specific working hours home workers are expected to adhere to each day. (Home workers and employers can agree to a flexible working arrangement whereby daily working hours are not performed consecutively).
• Compensation terms to home-working employees for the use of personal computers, tablets, telephones, etc. in the completion of professional duties. Although employers are not required by law to cover other home-working costs (e.g. internet fees, phone bills, etc.), if an employer opts to do this, these terms should also be specified.
• Safeguards to ensure the confidentiality of business operations, sensitive documents and trade secrets.

Employers should also keep concise records of the implementation a work-from-home arrangement for each employee. Once home work is underway for a given worker, the employer should then keep a log of the work accomplished, hours worked, expenses paid, etc.

Employer requirements

Employers with home workers have certain obligations towards these employees, which include:

• Ensuring that home workers enjoy "suitable working conditions" (although there is no legal definition of this) and that home-based operations do not disrupt the lives of neighbours.
• Ensuring that the home office meets health and safety requirements and that inspections (if possible) are conducted.
• Ensuring that an employee's home office is able to process professional data and information in a secure way that is consistent with the company's confidentiality policies.

Staff mobility

According to legal expert Mykola Heletiy, an Associate with CMS Ukraine, staff mobility was on the rise in Ukraine and internationally well before the COVID-19 pandemic struck more than a year ago.

What is staff mobility? According to CMS's Heletiy, this arrangement gives "employees the opportunity to practice their skills within different company units or even travel abroad and work in different offices of the same company or even a different company".

As stated, the trend towards increased "staff mobility" was not inspired by the pandemic, but the increasingly global nature of business and the ability of multi-national corporations to move employees around within an international network.

In the past, employers have promoted staff-mobility programmes because they offer employees unique training, experience and skills. During the pandemic, however, these same programmes have proved invaluable by allowing companies to move employees between offices (in response to restrictions, infection levels or COVID-related operational demands) in order to prevent or minimise layoffs.

Staff mobility usually occur in these two basic forms:

• Intragroup movements of employees within Ukraine; and
• The transfer of specialists into the Ukraine.

Legal framework for staff mobility

The Ukrainian Labour Code allows for temporary transfers of employees, although the law does not have a clearly defined concept of "secondment" as it exists in other countries.

Even in the case of "temporary transfers", Ukrainian law states that this arrangement cannot be implemented unless both employee and employer consent.

As far as international transfers are concerned, sending employees at secondment abroad or having foreign specialists transferred to Ukraine are not directly addressed in Ukrainian law.

To deal with this regulatory gap, companies commonly apply different options including, for example, applying regulations for business trips, vacations to these transfers, or classifying the seconded employee as a regular local staff member.

Hiring foreign specialists

When bringing a foreign specialist into Ukraine, it is vital that employees address the issue of "permitting" – ensuring that the specialist obtain the proper permits to enter, reside, and work in the country. Each company is responsible for obtaining work permits for such employees, and it can do this by directly employing the visiting individual or listing the individual as an employee of a foreign employer.

The latter arrangement is attractive to some Ukrainian employers because it relinquishes many of their regular obligations, such as health and safety, and taxation, since these responsibilities would have to be assumed by the foreign employees.

Health and safety

Now more than ever, employers must be attentive to worker health and safety.

As we enter the second year of pandemic, employers must respect state-ordered quarantine rules, and must be sure that mask usage, social-distancing and hygiene requirements are followed in the workplace for those businesses that are not operating remotely at this time.

For employers that have implemented remote work, they must be mindful that they are still responsible for the health and safety of their home-based employees. Further to recent regulations passed by the government, employers are also responsible for the safety of the equipment provided to home workers (e.g. key boards, computer screens, etc.) and – further to this – are also expected to offer remote employees online safety training.

Digitalisation

Even before the widespread utilisation of remote work, the importance of digital technology in the workplace has been on the rise with innovations such as Artificial Intelligence (AI), block-chain, and specialised algorithms playing important roles in the operations of many firms.

Modern technology has not only made large-scale remote work possible, it is also helps home workers and their employers meet government requirements to protect data security, ensure worker health-and-safety, and execute employment contracts.

Using digitalisation to finalise employment agreements

Previously, the Ukrainian government required that employment agreements be signed in paper copies only, making innovations such as digital transmissions of contracts and e-signatures impossible. However, recent regulatory reforms now allow for important communications (e.g. terminations, etc.) about employment agreements to be conducted by email.

"These developments should make the lives of employers and employees much easier now," states CMS expert Heletiy, but only time and case law will reveal any gaps in these regulations requiring the future attention of lawmakers.

For more information on issues such as digitalisation in the Ukrainian work place and implementing remote employment in Ukraine, contact your CMS client partner or local CMS experts: Oleksandra Prysiazhniuk and Mykola Heletiy.