The new Labour Code: what the government is preparing

The government has reached the final stage of the labour reform: the draft of the new Labour Code has been prepared by the Ministry of Economy and approved by the Cabinet of Ministers for submission to the Verkhovna Rada. The document is intended to replace the outdated Labour Code of 1971 and become the foundation of a modern labour market oriented towards European integration, digital employment, better protection of employees and a balance of business interests.​

Why is labour legislation being updated
The new Code is designed to comprehensively reset labour rules and finally abandon the Soviet model that no longer corresponds to the realities of the war‑time and post‑war economy. At the same time, Ukraine is implementing EU directives on working conditions, working time, reconciliation of work and family responsibilities, and occupational safety as part of its European integration commitments.​
For businesses, the reform reduces legal uncertainty by replacing numerous “patches” to the current Labour Code with a single code containing transparent procedures and predictable consequences. For employees, it is an opportunity to obtain clearer guarantees aligned with the practice of flexible, remote and digital employment.​

Key novelties of the Labour Code draft
One of the key blocks is the digitalisation of labour relations: electronic documents and employment contracts are equated with paper ones, which reduces bureaucracy, facilitates remote interaction and makes HR procedures more transparent.​
The draft also systematises and expands the types of employment contracts, providing for several types that can be flexibly combined (including remote and project‑based work, flexible working time) in order to legalise widespread but still “grey” formats of work and reduce risks for both employers and employees.​

Balance of interests between employee and employer
The draft codifies modern guarantees for employees – from the right to fair remuneration and safe working conditions to protection against discrimination and transparent procedures for resolving employment disputes. An important element is the strengthening of social dialogue: the document was developed with the participation of trade unions, employers’ organisations, experts and international partners, including the ILO.​
For employers, clear indicators of employment relations are introduced to limit the misuse of civil‑law contracts to “disguise” actual employment and at the same time provide comprehensible criteria for inspections by the labour authority. Due to the detailed procedures for hiring, transfer, dismissal, rest time and collective bargaining mechanisms, the number of disputes and the costs of resolving them are expected to decrease.​

Minimum wage, flexibility and EU standards
The draft introduces a transparent mechanism for determining the minimum wage – on a monthly and hourly basis using a formula aligned with international standards, which should reduce political arbitrariness and link the “minimum wage” to productivity and social minima.​
It also integrates European approaches to flexible employment: non‑standard forms of work, remote and part‑time employment, shift work and the reconciliation of work and family responsibilities are regulated, which is particularly important for the post‑war labour market, the return of veterans and the integration of internally displaced persons.​

What this means for businesses and employees now
The actual launch of the new Code will depend on the speed of parliamentary consideration, but the political signal is already clear: the old Labour Code will be replaced by a comprehensive codification. Businesses should already analyse their HR documents and models of interaction with staff and prepare for the transition to electronic formats, flexible contracts and clear criteria for employment relations.​
Employees should carefully monitor the wording of guarantees in the final text, as the new Code will affect the working regime, opportunities to reconcile work and family life, protection from discrimination, the dismissal procedure and ways to protect their rights. For both sides, this is a transition to a model in which electronic tools, European standards and detailed procedures become the rule rather than the exception.

If you have any questions or issues related to the application of the new Labour Code draft, the conclusion of employment contracts, changes in working conditions, dismissal of employees or the protection of your rights in employment relations, seek professional legal advice to analyse your specific situation and choose the optimal strategy.

Author – Svitlana Krutorohova, attorney at the Law Firm “Legal Company WINNER”.