Internal Labor Regulations: What You Need to Know

Internal labour rules / internal labour regulations (ILR) are often perceived as a formal “check‑box template” that can be downloaded from the internet, signed and put into a cabinet. In reality, the Labour Code of Ukraine explicitly defines them as a mandatory local normative act that establishes the working‑time and disciplinary order within the enterprise and serves as a source of labour law at the level of the concrete employer. Therefore, the quality of ILR affects not only the result of a State Labour Service inspection, but also the predictability of daily processes, discipline and the legal protection of both the employer and the employees.

1. Why ILR are mandatory local acts

• Article 142 of the Labour Code of Ukraine establishes that the labour order at enterprises, institutions and organisations is determined by internal labour rules, which are approved by the labour collective on the proposal of the employer and the representative body of employees, based on typical regulations.
• Local normative acts, including ILR, are binding for all employees of the enterprise, regardless of position, type of employment contract or working regime, and may not worsen the employees’ position compared with labour legislation or a collective agreement.
• The Ministry of Justice and specialised labour‑law publications emphasise that ILR are one of the core documents of the HR system, alongside the remuneration policy, the leave schedule, job descriptions and health‑and‑safety instructions, and that their absence indicates gaps in the employer’s local rule‑making.
• The existence of approved ILR is mandatory for both legal entities and sole proprietors (self‑employed persons) who use hired labour, because by entering into an employment contract the employee undertakes to comply with the employer’s internal labour rules.

2. Role of ILR in regulating employment relations

• ILR detail and “adapt” general provisions of the Labour Code to the specific conditions of each enterprise: the procedure for hiring and dismissal, working‑time regime, breaks, leave, behaviour rules, incentives and disciplinary sanctions.
• Through ILR, local rule‑making takes place: they fill gaps in legislation and reflect the peculiarities of the organisation of work, shift schedules, remote work, corporate standards, etc., without exceeding the limits set by law.
• For employees, ILR serve like a clear “rules‑of‑the‑game” agreement: what is expected from them, what procedures apply in disputes (tardiness, absenteeism, refusal to perform tasks, conflicts), and how the mechanisms of incentives and liability operate.
• For employers, ILR provide legal support: they are used as the basis for imposing disciplinary sanctions, documenting breaches of labour discipline, substantiating dismissal and defending the employer’s position in disputes with employees and supervisory authorities.

3. Why copying “typical rules” is dangerous

• There is still no single, up‑to‑date typical ILR that corresponds to modern forms of employment, flexible working schedules, remote work and digital tools for monitoring working time.
• Most “online templates” are based on norms of Soviet‑era typical rules and do not reflect requirements concerning employers who are sole proprietors, remote work, night shifts, job‑sharing and other nuances, so they are difficult to use as evidence in inspections or in court.
• A formal document that does not match the real organisation of work (for example, prescribing a classic five‑day week when actual work is performed in shifts or call‑centres) only increases legal risks, as it demonstrates the discrepancy between declared rules and practice.
• Professional sources recommend drafting ILR with consideration of the specific structure, schedules and corporate culture of the enterprise, involving a lawyer and an HR specialist, and, for larger employers, also the occupational health and safety service and the trade union.

4. Legal requirements for the adoption and communication of ILR

• Article 142 of the Labour Code of Ukraine provides that ILR are developed by the employer jointly with the elected body of the primary trade‑union organisation (or another representative body of employees) and submitted for approval by the labour collective.
• The decision on approval is adopted at a meeting (or conference) of the labour collective, recorded in minutes, and the rules are brought into force by an order of the head; only after this does the document become a valid local act.
• Local normative acts, including ILR, must be brought to the attention of employees with their signature; this is usually done when hiring or when changes are introduced, and the record of familiarisation is kept in the employee’s personal file or in a separate register.
• Any provisions of ILR that are less favourable to employees than the Labour Code, collective agreements or sectoral agreements are invalid, even if the employee has formally agreed to them, and may serve as grounds for claims by the State Labour Service.

5. Practical consequences of absence or formal ILR

• During State Labour Service inspections, inspectors directly request the ILR and analyse how well they correspond to actual working conditions; absence or outdated rules can be treated as a violation in the organisation of employment relations and strengthen the employee’s position in a dispute.
• Without clear local rules, employers often cannot legally hold employees liable for disciplinary offences: courts frequently recognise dismissals as unlawful if the employer fails to prove which specific rules were breached and when the employee was acquainted with them.
• The absence of clearly defined procedures (for example, leave‑scheduling, handling confidential information, compliance with the regime of commercial secrecy) complicates risk management, from data leaks to conflicts over work schedules or the distribution of duties.
• For employees, a purely formal approach to ILR means uncertainty: people do not know which actions are considered violations, how to protect their rights if schedules or working conditions change, and what mechanisms for influencing the employer are provided for in local acts.

If you have questions or problems related to drafting or updating internal labour rules, harmonising them with the labour collective and the trade union, checking their compliance with the Labour Code and the practice of the State Labour Service, or resolving employment disputes concerning violations of or unlawful changes to internal rules, seeking qualified legal assistance will help build an effective system of local acts, minimise the risk of fines and ensure transparent and fair “rules of the game” for both employer and employees.

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