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Publication date: 30.04.2024
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Do employees of pre-retirement age have a preferential right to remain at work in the event of layoffs?
An employment contract concluded for an indefinite period may be terminated by the employer in the event of changes in the organization of production and work, in particular a reduction in the number or staff of employees, in accordance with paragraph 1 of Article 40 of the Labor Code of Ukraine (hereinafter - Labor Code).
In the second part of Article 49-2 of the Labor Code, it is stated that when releasing employees in cases of changes in the organization of production and work, the overriding right to stay at work provided for by legislation must be taken into account. In such cases, the employer must comply with the requirements of Article 42 of the Labor Code, which establishes that when the number or staff of employees is reduced due to changes in the organization of production and work, the preferential right to stay at work is given to employees with higher qualifications and labor productivity.
Under equal conditions of labor productivity and qualifications, the preference in remaining at work is given, including to employees who have less than three years left before the retirement age, upon reaching which a person has the right to receive pension payments (clause 10 of article 42 of the Labor Code).Obligations of the employer in case of dismissal of the employee
In the case of dismissal of an employee in the event of a reduction in staff (number), the employer must take the following actions:
1) notify employees no later than two months before the future release;
2) offer the employee all vacant positions that are available at the time of the employee's warning about the future dismissal and appear during the period from the day of the warning to the day of dismissal, and also exist immediately as of the day of dismissal, which he can occupy in accordance with his qualifications;
3) to determine the level of qualification and labor productivity of employees whose positions are being reduced.
Labor disputes
First of all, preference for retention at work is given to persons with higher qualifications and productivity. Judicial practice does not provide for the possibility of conducting an examination in order to identify employees with higher qualifications and labor productivity. Therefore, the participants in the labor dispute have the right to submit any evidence admissible by the Civil Procedure Code, which confirms the fact that the employee who is being dismissed has a higher or lower qualification and labor productivity.
Such evidence can be documents and other information about: • education and assignment of qualifications (classes, categories, ranks);
• Certification training;
• training without separation from production;
• inventions and innovative proposals, the authors of which are the relevant employees;
• temporary performance of duties of more qualified employees;
• work experience, etc.
Labor productivity, as a general indicator of its effectiveness, can be evidenced by an increase in the volume of work performed, its quality, combination of professions, etc. One of the essential signs of higher labor productivity is employee discipline.
The Supreme Court of Ukraine recognizes employee discipline as one of the essential signs of higher labor productivity. Therefore, the Supreme Court considers it necessary to take into account the presence of disciplinary sanctions when applying the provisions of Article 42 of the Labor Code regarding the preferential right to stay at work.
The labor productivity and the qualification of the employee must be evaluated separately, but in the end, the court, when considering a labor dispute, must determine the workers who have higher qualifications and labor productivity based on the combination of these two indicators. In the absence of a difference in qualifications and labor productivity, employees listed in the second part of Article 42 of the Labor Code have preference for remaining at work.
When determining the categories of employees who have a preferential right to stay at work, it should be taken into account that the sequence of their listing, which is given in the second part of Article 42 of the Labor Code, has no legal significance.In other words, an employee specified in one of the first clauses of part two of Article 42 of the Labor Code cannot be given preference for retention over an employee who belongs to the category specified in one of the last clauses, only because of the order of the corresponding categories of employees in the list.
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Relevant legal conclusions regarding qualification and performance criteria are set out in the Supreme Court's rulings:
• dated January 31, 2018 in case No. 824/3229/14-a;
• dated July 11, 2018 in case No. 816/1232/17;
• dated February 21, 2020 in case No. 809/1353/16;
• dated March 13, 2020 in case No. 813/2688/16;
• dated March 17, 2020 in case No. 826/510/16.
Identification of employees who are to be left at work in the first place
In order to identify the employees who are primarily to be left at work in case of downsizing, the employer must make a comparative analysis of the labor productivity and qualifications of those employees who remained at work and those who are to be laid off. Such an analysis can be carried out by drawing up an appropriate certificate in an arbitrary form with data indicating the preferential right of one over another to be left at work.
