The government has adopted a new Labor Code. The next step is up to the Verkhovna Rada

The Cabinet of Ministers of Ukraine approved a draft of the new Labor Code of Ukraine on January 7. Currently, the labor market in Ukraine operates under the Labor Code of 1971. The parliament instructed the government to develop a new Labor Code in May 2022, as required by the law on de-Sovietization of legislation.

The decision was reported by Prime Minister Yulia Svyrydenko.

Main changes:

• The Code establishes clear signs of labor relations. The document defines eight signs of labor relations. This should reduce legal uncertainty and bring employment out of the shadows. Preliminary government estimates for de-shadowing the labor market are UAH 43 billion per year.
• Flexible employment contracts. The number of types of employment contracts is increasing from six to nine. The Code clearly regulates modern work formats: remote work, home work, with unfixed working hours. In addition, an employee will be able to conclude several types of employment contracts with an employer.
• Digitalization of labor relations. Electronic documents are equated with paper documents in labor relations.
• A transparent mechanism for determining the minimum wage (both monthly and hourly), aligned with EU standards. The minimum limit will be defined as a percentage of the average wage, to be established by the Cabinet of Ministers.
• Flexible working arrangements for employees with children. The Code establishes the right to flexible forms of work (remote work, home work). It also provides more opportunities for parents. For example, expanding the rights of both parents to parental leave: both the mother and the father will be able to take two months of leave.
• Labor inspection reform: a risk-based approach to inspections is being introduced.
• More employment opportunities for young people. In particular, the Code introduces a separate mechanism for safely combining education and a first job — a student employment contract.

The Code also provides for the implementation of over 30 EU directives, regulations, and International Labor Organization conventions, which is necessary for European integration. The document must then be voted on by the Verkhovna Rada.

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