Legal Updates of Labour & Employment Practice (Q1, 2018)

10 04 2018


Increased minimum and living wages

On 01 January 2018, the Law1 which introduces new state budget for 2018 became effective. Among the core provisions of the Law, ones related to the expected increase in minimum wage and the living wage. Thus, the adopted budget lays down that from 01 January 2018 the minimum wage amounts to UAH 3 723.00 per month and UAH 22.41 per hour, respectively. The living wage for one person per month from 01 January 2018 is UAH 1 700.00, from 01 July – UAH 1 777.00, and from 01 December – UAH 1 853.00. Moreover, from the very beginning of 2018 teachers' salaries have grown by 25%. 

At the same time, with raise in minimum wage, fines for violation of labor legislation have become heavier, since they directly depend on the amount of the effective minimum wage. 

Not-universal moratorium on inspections

In addition, the State Budget Law lays down continuation of the moratorium on business inspections till 31 December 2018, but on somewhat modified conditions, stipulated by the amendments to the respective Law2, which have taken effect since 01 January 2018.

However, on 22 February 2018, the Government by its Resolution3 approved the list of the state inspection authorities that are excluded from the scope of the moratorium. The list mentions 20 state bodies, including the State Committee for Consumer Protection (in particular, as to inspections on compliance with consumer protection laws), the State Fiscal Service, the National Bank of Ukraine, the Competition Committee, the National Commission on state regulation in the energy and utilities sectors, the National Securities and Stock Market Commission, the State Audit Service, the National Council on Television and Radio Broadcasting, the State Labor Service and its territorial bodies, the State Service of Ukraine for Emergency Management (partially), etc. 

Such an approach to the formation of the list of state inspection authorities was aimed at ensuring control over the most vulnerable and risky areas of public relations and fulfilling international legal obligations of Ukraine.


Prospective privacy at workplace rules

On 14 February 2018, the Draft Law4 on privacy at workplace and protection of workers’ personal data was filed to the Parliament. Primarily, this legal act concerns audio and video monitoring of employees, as well as the employer's access to the correspondence of employees (including e-mails, messengers, visited web-pages, data on the computer hard drive, etc.).

The Draft Law is based on the relevant practice of the European Court of Human Rights, in particular, on such its earlier decisions as Halford v. the United Kingdom, 1997 (telephone calls privacy), Copland v. the United Kingdom, 2007 (e-mail privacy), Köpke vGermany, 2010 (hidden video surveillance at the workplace); as well as recent ones: "Barbulescu v. Romania", 2016 (use of work messengers for private purposes), "Lopez Ribalda v. Spain", 2018 (hidden video surveillance at the workplace). 

At the same time, the Draft Law provides for imposing such a range of obligations on employers as to personal data protection which is even wider than one currently required by European law. Namely, it is proposed to incorporate into the Labor Code of Ukraine the following additional guarantees of the protection of employees' rights to respect for private life and correspondence:

• prohibition of audio and video surveillance at the employee's workplace, unless prior written notice is given (exception may constitute only surveillance for ensuring the protection of the employer’s material values - but not longer than 1 month); 

• obligation of employers to place special warning signs where such audio and/or video surveillance is conducted;

• prohibition to monitor employees’ work correspondence (phone conversations, e-mails, messengers, visited web-pages, data in a computer), unless there is no prior written notification of the forms and framework of such monitoring. 

Should the Draft Law be adopted, it will come into force on the day following the date of its publication.


No Taxation of Pensions 

The Constitutional Court of Ukraine in its Decisioncanceled taxation of pensions. It ruled such taxation unconstitutional as contrary to the rule of law principle. Thus, the provisions of the Tax Code of Ukraine, which heretofore provided for taxation of pensions over UAH 13 730, became invalid and now there no taxation of pensions by the personal income tax (18%) and the military tax (1.5%) should be conducted.

The Decision was published on 28 February 2017. It is final and universally binding, so pensions will not be taxed anymore since 28 February 2018.


Authors: Oksana Voynarovska, Valeriya Savchuk, Oleksandr Melnyk