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Law of Ukraine No. 361 established the requirements for updating information on ultimate beneficial owner (UBO) in the Unified State Register, which began on July 11, 2021 and was supposed to last until July 11, 2022. However, in connection with the beginning of the war, changes were made to the requirements for the submission of information on UBO during the war in Ukraine and responsibility for non-compliance with the norms during the war.The Verkhovna Rada of Ukraine adopted a number of amendments to the current legislation (Law of Ukraine N 2115-IX “On the Protection of the Interests of Subjects of Submission of Reports and Other Documents During the Period of Martial Law or State of War”) for the period of military aggression on the territory of Ukraine and, accordingly, the requirements for the updating information about UBO in the State Register were postponed and established the following: “natural persons, natural persons – entrepreneurs, legal entities submit accounting, financial, settlement, audit reports and any other documents, the submission of which is required in accordance with the norms of current legislation in the documentary and/or in electronic form, within three months after the termination or cancellation of martial law or the state of war for the entire period of failure to submit reports or the obligation to submit documents.“
The same Law establishes that “during the period of martial law or a state of war, as well as within three months after its termination, administrative and/or criminal liability for failure to submit or late submission of reports and /or documents shall not be applied to individuals, individual entrepreneurs, legal entities“.
Thus, for the period of the war on the territory of Ukraine, fines (in the amount of UAH 17,000 to UAH 51,000) will not be applied to those legal entities that have not submitted documents to update information on UBO during the war in Ukraine by July 11, 2022. They must do so within 3 months after the official end of the state of war in Ukraine.
And even taking into account the fact that businesses are currently exempted from the obligation to update data on the UBO and are exempted from administrative responsibility until the end of the war, we recommend, if possible, to submit the necessary information to the State Register.
The changes to the information confirmation of UBO, or ultimate beneficial owner in Ukraine, are still in progress. Let’s summarize where it all started. In April 2020, a Law of Ukraine was adopted “On prevention and counteraction to the legalization (laundering) of illegally received funds, financing of terrorism and financing of proliferation of weapons of mass destruction.” The Law came into force to establish a new procedure of UBO disclosure for legal entities in Ukraine and introduce a process for keeping these data up-to-date. Moreover, it required to update the registers and confirm information about UBO and the structure by legal entities till October 10th, 2021. However, just before the indicated deadline it was postponed by the Verkhovna Rada for another 9 months – till July 11, 2022.Later on, the further development of the law progressed. So, let us remind that at the end of October 2021, draft law No. 6131-2 appeared on the website of the Verkhovna Rada, proposing to amend the Law of Ukraine “On State Registration of Legal Entities, Individual Entrepreneurs and Public Organizations.” Later, on June 19, 2022, the project was registered resolution at the Verkhovna Rada under No. 6131-2/P regarding adoption as a basis of draft law No. 6131-2.
It becomes relevant to recall what changes and simplifications regarding the confirmation of information about the ultimate beneficial owner (UBO) are provided by draft law No. 6131-2.
The draft law provides for the following:
Information on the ultimate beneficial owner and ownership structure is not submitted during the state registration of the creation of a legal entity in relation to legal entities whose founders are exclusively natural persons who are considered its ultimate beneficial owners, unless they have submitted information that the ultimate beneficial owners of such a legal entity are other persons;
Therefore, it is expected that in the near future deputies of the Verkhovna Rada will still support draft law No. 6131-2 in the 1st reading and it will become easier for businesses to conduct their business activities, especially in such difficult times as now during martial law.
Working time is considered as any period when an employee is at their company’s disposal and carries out their duties. This period is, by law, limited to a certain number of hours per week, including overtime. Employees also get a so-called time off, which is a set number of days per year when they can rest and recharge. The law stipulates the annual leave entitlement and specifies the possible circumstances for additional leave. This article outlines the labour law aspects of working time and vacation in Ukraine.
Article 50 of the Labour Code stipulates the normal working hours for employees – it cannot exceed 40 hours per week. For every employee, overtime should not exceed 4 hours for two consecutive days, which makes a maximum of 120 hours per year (Article 65 of the Labour Code of Ukraine).
Annual leave is allowed for employees for at least 24 calendar days during the working year counted from the date of conclusion of the Employment Contract. That is, at least 2 calendar days for 1 month worked. Some categories of workers have the right for a longer leave. Persons with disabilities in categories I and II are entitled to an annual leave of 30 calendar days, and persons with category III disabilities – 26 calendar days (Part 7 of Article 6 of the Law on Leave).
According to the legislation of Ukraine, leave is divided into:
Annual leave
Additional study leave (Articles 13, 14 and 15 of the Law of Ukraine)
Sabbatical (creative) leave (Article 16 of the Law of Ukraine) – to complete a dissertation for a degree or to write a textbook or research paper (monograph, reference book, etc.)
Social leave (Article 4 of the Law of Ukraine)
Unpaid leave (Articles 25, 26 of the Law of Ukraine)
At the employee’s request, additional annual leave may be granted at the same time as the basic annual leave or separately. Duration of the basic annual leave and the additional leave may not exceed 59 calendar days in total, and for employees engaged in underground mining – 69 calendar days.
Below we outline the types of additional leave defined by the law.
The maximum duration is 35 calendar days, and its duration for each employee is determined by a Collective or Employment Contract depending on the results of the working place assessments and the employee’s working hours in these conditions.
The overall duration can last up to 35 calendar days. The specific duration of the annual additional leave for the Special Nature of Work is set by a Collective or Employment agreement, depending on the employee’s employment time in these conditions.
The additional study leave is divided depending on the type of institution where the employee is studying – adding up to a maximum of 35 calendar days per year.
In order to verify the employee’s compliance with the work assigned to him, when concluding an Employment Contract in accordance with Art. 26 of the Labour Code of Ukraine (hereinafter – the Labour Code) the probation period may be established by agreement of the parties. Probation period in Ukraine, or in other words trial period, is a period of time at the start of an employment when trainings take place and both the employer and the employee get to know each other. However, there are also cases when the probation period is not set.
The probation period for employment, unless otherwise stated by the legislation of Ukraine, may not exceed:
In some cases, in agreement with the relevant elected body of the primary trade union, the probation period can last up to 6 months.
When hiring (Article 27 of the Labour Code), the probation period does not include days when the employee did not actually work, regardless of the reason.
An exception is made for the heads of organizations and their deputies, chief accountants and their deputies, and heads of branches: such employees may be assigned a probation period of six months.
There are certain cases that fall under the exception of not having a probation period.
The probation period is not set when hiring:
Fixed-term employment is a contractual relationship between an employer and an employee that lasts for a specified period of time and applies only for the duration of certain work. In Ukraine, this contract is regulated by the labour code that ensures that fixed-term contracts respect basic labour rights, particularly unjust dismissal and renewal.
In Ukraine, a fixed-term employment contract is concluded when:the labour relations cannot be established for an indefinite period, taking into account:
in cases that are specifically provided by lawThe term of a fixed-term employment contract is set by the agreement of the parties. It can be determined by:
The Ukrainian labour code specifies no minimum or maximum duration for fixed-term employment contracts. However, when it comes to the renewal of these contracts, the law is quite specific.
Fixed-term contracts that have been re-negotiated one or more times should be considered as contracts for an indefinite period. Therefore, if the employee was hired for a period of 1 month, and after this period re-signed such a contract for another month, the second contract will be indefinite.
Exceptions are specified in Part 2 of Art. 23 of the Labour Code, and the apply to the scenario when the nature of the work performed, the conditions of its implementation or the interests of the employee do not allow the conclusion of an indefinite contract, or it is explicitly provided by law.
The oddness of the situation with the re-concluded contract is that only a court can make a final decision on whether a fixed-term contract has been transformed into an indefinite one or not (with an exception). Therefore, it is necessary to record the reasons that led to the need for a fixed-term employment contract.
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