Forms of labor agreement. Which one is preferable?

The essence of the labor agreement

The requirements of an employee

In Ukraine, a labor agreement can be concluded by individuals from the age of 18 with some exceptions envisaged within the continuing legislation), who are citizens of Ukraine, or foreign citizens with a Residence Permit, or if they don't have one then a Job Permit.

The remaining requirements that are made to a potential employee are set by the employer, including education, qualification, additional skills, etc.

According to the legislative definition, a labour agreement can be described as the following:

Agreement between an employee and an employer (owner of a business or a person authorized by the latter), according towhich an employee binds himself/herself to do work determined by such agreement, in keeping to internal labour regulations, and an employer assumes paying a salary and ensuring labour conditions in accordance with the agreement and labour legislation.

In Ukraine, they recognize a special type of labour agreement, i.e. the labour contract. In a labour contract, parties agree on the period of validity thereof, duties and responsibility of the parties thereto (including material liability), the terms of financial provision and working conditions of an employee, the terms on which the contract canbe broken, including terms for its breaking prior to expiry.

Ukrainian law distinguishes between a “labour agreement” and a “labour contract”. A “labour contract” is a specific form of written “labour agreement”. In a labour contract, the resolution of certain issues, including the term of the contract and the grounds for the termination of the employment relationship, are determined by the parties and are not subject to the requirements of the Labour Code. Article 9 of the Labour Code, however, provides that the provisions of an employment contract may not deprive an employee of the rights and benefits, which are guaranteed by the labour laws of Ukraine. Furthermore, a labour contract may be used only if it is expressly authorized by law, and it must always be executed in writing.

Although it is usual for a written labour agreement to be concluded by the parties, the absence of such an agreement does not prevent an employment relationship from being established. In such a situation, the parties are bound by an assumed labour agreement, and the relevant provisions of the Labour Code strictly regulate the employment relationship.

Conceptually, legal entities, both local and foreign, may contract the services of individuals in Ukraine pursuant to either: (i) labour agreements or labour contracts concluded in accordance with the Labour Code; or (ii) so-called “civil law contracts” concluded in accordance with the Civil Code of Ukraine.

As a rule, labour agreements are concluded for an unlimited period. However, the Labour Code allows for a labour agreement to be concluded for:

(1) a limited period agreed upon by the parties; or

(2) a period required in order to complete a given amount of work.

Article 23 of the Labour Code provides that a labour agreement may be concluded for a specific term only if the nature of the employee’s work or “the employee’s interests” makes it impossible to establish an employment relationship for an unlimited term. However, this provision affects only a labour agreement and not a labour contract. Pursuant to Article 21 of the Labour Code, the parties to a labour contract are afforded discretionary powers to determine the term of such contract. Other provisions, which the parties may agree upon in a labour contract, include:

(1) rights, obligations, and liabilities of the parties, including the terms of their material liability;

(2) remuneration and organization of the employee’s labour; and

(3) grounds for termination, including early termination.

Thus, the principal advantage of a labour contract, as compared with a labour agreement, is the discretion which the parties to a labour contract may exercise in respect of the terms and conditions of the employment and the grounds for termination, in contrast with the rigid requirements of the Labour Code. On the other hand, the principal disadvantage is that a labour contract, unlike a labour agreement, may be concluded only if it is expressly authorized by law and it must always be in writing.

Дата добавления: 2015-01-03