“LET ME DISTURBED” OR “ANOTHER “HIT-AND-RUN” ON BUSINESS”

On the website of the Ministry of Social Policy a draft law with a loud name “On Amendments to Certain Legislative Acts of Ukraine on the Strengthening of Employees’ Rights and the Counteraction to the Application of Undeclared Labor” has been placed for discussion.

Judging by the title, the initiative is elegant: the protection of workers’ rights, etc. However, if you carefully read this project, then you begin to understand that in order to strengthen the protection of workers’ rights and counteract the use of undeclared work, the published text has nothing to do with, but rather directed at the destruction of a certain part of entrepreneurs, and as a consequence of the transition to a shadow of a large part of the able-bodied population.

Consequently, the essence of this bill is reduced to the fact that it is proposed to introduce such a concept as a sign of the existence of labor relations.

According to the authors of the bill, such signs are:

1. the payment is given to person in cash or in kind for work performed in the interests of another person;
2. a personal performance by the person of work (provision of services) for a specific qualification, profession, position on behalf and under the control of the person in whose interests the work is performed (services rendered) or an authorized person;
3. the payment for the work performed (provided services) is the sole source of income of the individual or is 75 and more percent of his income during 6 calendar months;
4. the work is performed (services are provided) at the workplace determined by the person, in whose interests the work is performed (services rendered), or the person authorized by first person, in compliance with the rules of the internal labor regulations;
5. the person performing the work (providing services) is similar to the work performed by the employees of the employer;
6. the organization of working conditions, in particular, the provision of means of production (equipment, tools, materials, raw materials, workplace) is provided by a person in whose behalf the work is performed (services rendered) or by the person authorized by it; the length of working time and rest time is set by the person in whose interests the work is performed (services rendered) or by the person authorized by first person.

A person who performs work (renders services) having three or more indications of the existence of labor relations, without concluding an employment contract, may apply to the central executive body, which implements the state policy on supervision and control over the observance of labor legislation, for the establishment the fact of the existence of labor relations.

The fact of the existence of labor relations is established by the official of the central executive authority, which implements the state policy on supervision and control over observance of labor legislation, and its territorial authorities, which has the authority of the state labor inspectorate, as a result of the implementation of state control measures.

The fact of the presence of labor relations can be established in court. The duty to prove the absence of labor relations rests with the defendant.

For relations recognized as labor, the provisions of this Code shall apply from the date of commencement by the employee of the work established by a court or an official of the central executive authority, which implements the state policy on supervision and control over the observance of labor legislation, and its territorial bodies, which has the authority of the State Labor Inspector.

In case of establishing the fact of the existence of labor relations, the employee and the employer are obliged to conclude an employment contract.

I think, it is farther possible not to continue, all things were understood. In case of acceptance of this masterpiece on any enterprise that has in the contractors sole proprietorships of the 3rd group, the inspectors of labour will come (or even not come, but simply sitting up in an office) will draw acts about the presence of labour relations, will write fines and proudly will report about that, how the universal conspiracy was revealed and how to protect rights of workers, that were not asked to protect.

And while all are surprised why to do such things and how does it touch the protection of workers’ rights, and how we, sole proprietorships, dissatisfied the Ministry of Social Policy, it is necessary to read a document, that goes an appendix to this draft law, that explains an aim that is pursued by the Ministry of Social Policy clearly.

Thus, the expected result from approving such draft law is:

• strengthening of defence of person from illegal dismissal and ill-timed payment of salary;
• the non-execution of an employment contract provides an opportunity for a person to refrain from performing public or state duties (for example, military service ) or to receive state social assistance (for example, a subsidy);
• to ensure a stable flow of money to the budget and social funds from the payment of taxes for the use of hired labor within the framework of labor relations;
• introducing of a differentiated approach to penalty approvals for the use of hired labor without the conclusion of an employment contract;
• the establishment of the principle of pre-emptive availability of labor relations will enable labor inspectors to unequivocally qualify labor relations as labor;
• the establishment of legal continuity at the legislative level in labor relations will ensure for the labor collective transparency and clearness of the process of transmission of business to a new owner and will strengthen legal protection of employees from illegal dismissal;
• the legalization of labor relations will lead to an increase in the official employment of the population by increasing the number of concluded labor contracts. In this connection, economic growth will take place, which will contribute to the social needs of Ukrainian citizens.

Getting ready for the next hit-and-run on business. As they say: “Thanks for the heads up!” …

Nadia Voronytska-Gaidak
lawyer, managing partner
Femida Legal Association