Ban on unilateral salary reduction: what draft law No. 14402 provides

In the Verkhovna Rada, draft law No. 14402 has been registered, which proposes to directly prohibit employers from unilaterally worsening the terms of remuneration established by an employment contract.

It concerns, in particular, reducing an employee’s salary without first amending the contract with the employee’s consent.

This initiative is intended to change the established practice where the economic risks of business are effectively shifted onto employees through “technical” changes to remuneration regulations or the staffing table.

What guarantees already exist in the Labour Code.  The Labour Code of Ukraine already limits the possibility to freely change the terms of remuneration.

Key points:

• a change to essential working conditions (including the system and amounts of pay) is allowed only in connection with changes in the organization of production and work;
• the employee must be notified of such changes no later than two months in advance in peacetime;
• in case of a dispute, the court may find the change of conditions unlawful and oblige the employer to restore the previous conditions.

In practice, however, employers often bypass these requirements by changing bonus schemes, internal regulations or the structure of positions, which in fact reduces the employee’s income but is formally presented as “optimization”.

What draft law No. 14402 changes.  Draft law No. 14402 proposes to supplement Article 22 of the Labour Code and Article 22 of the Law “On Remuneration of Labour” with a rule that the employer has no right to unilaterally make decisions on remuneration issues that worsen the conditions established by the employment contract.

It is envisaged that:

• any reduction of a salary, tariff rate or other permanent components of pay is possible only by amending the employment contract;
• a change in legislation that worsens remuneration conditions by itself is not a ground for failing to pay wages in the amount specified in the current contract, if the contract has not been amended;
• decisions to change wages must be formalized through addenda (or another document) by mutual consent of the parties.

The authors of the draft law refer to the legal position of the Supreme Court in case No. 757/36687/21 of 05.05.2025, which emphasizes that an employer has no right to unilaterally change the terms of remuneration defined by an employment contract, even if a law is adopted that worsens those terms.

Consequences for business and HR.  If the law is adopted, employers will have to change their approach to managing personnel costs and HR documentation.

For HR and legal departments, this means:

• reviewing standard employment contract templates and remuneration regulations, with a clear distinction between fixed and variable payments;
• implementing a procedure for mandatory written approval of salary changes (addenda, employee applications, electronic document flow with a qualified e‑signature);
• assessing the risks of staff reductions or restructuring as an alternative for the employer where an employee does not agree to changed conditions;
• paying greater attention to communication with staff to reduce conflicts and potential employment disputes.

In addition, if minimum state guarantees in remuneration are violated, financial sanctions under Article 265 of the Labour Code will apply — from 2024 a fine in the double amount of the minimum wage per each employee in respect of whom the violation was committed is imposed for such a breach.

Employees: what are the real benefits.  For employees, the initiative will strengthen protection against unjustified reductions in income.

Practical consequences:

• a more stable income level and the ability to plan a budget, since the employer will not be able to “cut” salary suddenly without consent;
• stronger negotiating positions: changes to rates or bonuses will require genuine discussion rather than mere formal familiarisation;
• additional arguments in labour disputes over recovery of underpaid wages or recognition of changes to working conditions as unlawful.

The role of written evidence is also expected to increase: correspondence, orders, addenda, and electronic messages concerning changes in remuneration conditions.

European dimension and next steps.  Draft law No. 14402 fits logically into Ukraine’s European course in the field of labour rights, in particular in the context of Directive (EU) 2019/1152 on transparent and predictable working conditions. It specifies the limits of permissible employer interference in pay and reinforces the contractual nature of employment relations.

Next come consideration in the relevant parliamentary committee, possible amendments and debates, but the very fact of the draft’s registration already signals to business that arbitrary “re‑designing” of salaries without the employee’s consent is gradually moving beyond what is acceptable.

If you have any questions or issues related to changes in working conditions, risk assessment for employers or protection of employee rights, you should seek professional legal assistance from our labour law experts.

Author – Svitlana Krutorohova, attorney at the law firm “Legal Company ‘WINNER”.