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24 December 2012

Annual Review: Important Changes in the Ukrainian Labour Legislation in 2012

Notwithstanding that 2012 did not become the year of adoption of the long awaited new Labour Code it was marked with enactment of several important laws in the labour law area, including the Law on Amending Certain Laws of Ukraine Related to Preventing and Combating Corruption. This Law resulted in amending Article 41 of the Labour Code with a new legal ground for an employee dismissal at the employer’s initiative, namely for working under direct supervision of the close person in the meaning of the Law on Preventing and Combatting Corruption.

The most important act adopted in 2012 in the employment area is the Law on Employment dated 5 July 2012 (the “New Law on Employment”), which comes into effect as of 1 January 2013 (please see below for more information).

The other statute directly affecting the labour law area is the Law on Amending the Law of Ukraine on Personal Data Protection dated 20 November 2012 (the “Amending Law”), which came into force on 20 December 2012 (please see below for more information). On 1 July 2012, the Law on Amending Certain Laws of Ukraine Regarding Increasing Liability for Violating the Personal Data Protection Legislation dated 2 June 2011 came into force. The Law provides serious penalties for companies found in breach of the Law on Personal Data Protection (e.g. criminal liability of the companies’ officers for unlawful collecting, storing, using, destroying and transferring confidential information about a person (i.e. personal data), or for unlawful modification of such information).

In 2012 the parliament passed several laws aimed at strengthening the role of the employers and the other stakeholders in shaping the state policy in the labour and employee social benefits area, including the Law on the Employers’ Associations, their Rights and Guaranties of their Activity and the Law on Amending Certain Laws of Ukraine to Bring Them Into Conformity with the Law on Social Dialogue in Ukraine. In addition, a number of legislative acts were amended to guarantee a unified definition in the Ukrainian legislation of the parties to the collective bargaining.

The parliament also enacted the Law on Preventing and Combating Discrimination in Ukraine to ensure equal opportunities for exercising human rights and freedoms, including in the employment area.

Various state agencies have passed a number of regulations concerning regulation of the overtime work, business trips, labour law compliance inspections, labour safety, data protection, and other important employment law issues.

New Law on Employment

The New Law on Employment introduces financial incentives for the employers to hire specially protected categories of employees (e.g. recent graduates of the educational institutions, single mothers or fathers having children under 14, preretirement age people, etc.). It also imposes significant restrictions regarding the contents of a vacancy announcement. The Law introduces regulation of the activity of the personnel outsourcing agencies and other employment intermediaries, and establishes the clearer rules for engaging interns. The Law also prohibits undocumented employment and introduces important provisions related to the mass layoffs. The Law on Employment establishes key principles for engaging foreign labour; in particular it lists instances when a foreigner must obtain a working permit to work in Ukraine and, importantly, directly states that foreigners can be employed by the Ukrainian representative offices of foreign companies without a working permit.

Amendments to the Personal Data Protection Law

The Amending Law is aimed at further harmonizing the Ukrainian data protection regulation with the respective EU legislation. The Law establishes a clearer legal test for distinguishing between data processors and third parties, being processing of personal data by the processors on behalf of the personal data bases’ controllers.

The Amending Law changes the definition of a consent which now makes it easier for the companies to choose the business friendly form of such consents. Article 8 of the Personal Data Protection Law was supplemented with an individual’s right for recalling his or her previously issued consents for personal data processing.

The employer is no longer required to register its personal data base containing data of its employees, provided that such data is processed only for exercising the employment relations. However, if the employees’ personal data base had been already registered, the employer will still be responsible for registering respective amendments with the State Personal Data Protection Service, unless such initial registration is cancelled by the employer.

The Amending Law introduced certain additional information to be included in the applications for the personal data bases registration, in particular about the third parties receiving personal data and the cross-border personal data transfers. It is expected that the legislator will further amend Article 9 of the PDP Law to clarify that information about the types of third parties will be required for the registration purposes and not about every particular third party.

One of the most important changes for the business community introduced by the Amending Law is supplementing Article 11 of the PDP Law with several legal grounds for personal data processing, in addition to the initially established grounds, i.e. an individual’s consent and the law. Now personal data can be processed, in particular based on the need to conclude or perform an agreement where an individual whose personal data is subject to processing is a party, or if an agreement is concluded in favour of such an individual, or if such processing is required for performing measures before executing an agreement at an individual’s request.

The Amending Law finally provides some clarity with respect to the cross-border personal data transfers. In particular, Article 29 of the PDP Law now directly states that the countries – members of the European Economic Area, as well as the signatories to the Council of Europe Convention for the Protection of Individuals with regard to Automatic Processing of Personal Data shall be deemed as those that ensure the adequate level of personal data protection. The Cabinet of Ministers is responsible for approving the list of the other countries ensuring the adequate level of protection of the personal data. The Amending Law also determines when personal data can be transferred to the countries that do not establish the adequate level of personal data protection.

For more information, please contact Svitlana Kheda at SKheda@sk.ua.

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