The Cabinet of Ministers of Ukraine has approved a draft of a new Labor Code, which is set to become the foundation for a large-scale reform of the labor market. The document will soon be reviewed by the deputies of the Verkhovna Rada in its first reading.
This is reported by Finway
Key Changes and Innovations
According to Prime Minister Yulia Svyrydenko, the development of the new code took more than two years with the participation of the Ministry of Economy, businesses, trade unions, scientists, and international partners. The completion of this stage is an important step towards starting the reform.
“The labor market in Ukraine is still operating under the Labor Code of 1971. During this time, the structure of the economy, employment formats, and the needs of employers and employees have changed,” Svyrydenko noted.
The new Labor Code aims to create transparent rules for labor relations. The document establishes clear criteria for labor relations, which is expected to reduce legal uncertainty and help bring employment out of the shadows. According to preliminary estimates, the potential effect of formalizing the labor market could amount to 43 billion UAH annually.
The Code also introduces flexible labor contracts, increasing the types of contracts from six to nine, and defines modern work formats: remote, home-based, and with flexible working hours. Employees will be able to enter into several types of labor contracts with their employer simultaneously.
Electronic Document Flow and Transparent Minimum Wage
Among the important changes is the equal treatment of electronic documents with paper ones in the field of labor relations. A transparent mechanism for determining the minimum wage—both monthly and hourly—will also be implemented, in accordance with EU standards. The minimum wage will be set as a percentage of the average wage by government decision.
The new code guarantees the right to flexible work arrangements, including remote work and working from home. Additional opportunities are provided for parents: both will be able to take two months of parental leave each.
Special attention is given to the reform of labor inspections: a risk-oriented approach to employer inspections will be introduced. A new mechanism for safely combining education with first jobs—the student labor contract—is proposed for young people.
Yulia Svyrydenko thanked the team at the Ministry of Economy and individual specialists for their systematic work on this project. She also emphasized that the next step will be the consideration of the code in parliament and further work on the document in the second reading.