On 15 May 2024, the Law ‘On Amendments to the Labour Code of Ukraine on Labour Relations in the Course of Transfer of a Business Entity’ came into force. It adds a new Article 36-1 to the Labour Code.

These European integration amendments to legislation were introduced to fulfil the obligations set out in the EU-Ukraine Association Agreement. They bring national labour legislation in line with the provisions of Council Directive 2001/23/EC of 12 March 2001 on the approximation of the laws of the Member States relating to the protection of workers’ rights in the case of transfers of undertakings or businesses (or parts thereof).

In particular, this article provides trade unions with a new tool for protecting employees‘ right to employment – consultations with the old and new employer (’alienator’ and “acquirer”).

Key innovations:

  • The article provides an interpretation of such concepts as ‘transfer of a business entity’, ‘alienator’, ‘acquirer’.
  • In the event of a transfer of a business entity, the employment relationship of employees continues with the transferee. The rights and obligations under the employment contracts that existed between the employees and the transferee are transferred to the acquirer.
  • The status and functions of the elected body of the primary trade union organisation shall be preserved and subject to performance under the same conditions as before the transfer of rights and obligations from the alienator to the acquirer.
  • The alienator and the acquirer are obliged to notify the elected body of the primary trade union organisation of the transfer of the business entity no later than 10 working days before the transfer:

– date or estimated date of transfer;

– its causes;

– legal, economic and social implications for employees;

– any measures taken in relation to employees.

  • The elective body of the primary trade union shall have the right to initiate consultations with the alienator and/or acquirer within 5 working days from the date of receipt of this information:

– reasons for the decision to transfer the entity;

– its legal, economic and social implications for employees;

– measures to be taken to avoid or mitigate such consequences.

Consultations are held within 5 working days from the date of their initiation. A protocol or other document is drawn up based on the results. The absence of initiation of consultations does not affect the implementation of measures related to the transfer of a business entity.

  • Employees must be notified of changes in their essential working conditions caused by the transfer of a business entity no later than two months in advance.
  • If an employee is dismissed due to a change in the essential terms of the employment contract to the detriment of the employee, the employer is deemed to be responsible for the termination of the employment contract or employment relationship.