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Publication date: 17.05.2024
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In March 2019, labor inspectors of the Main Department of State Labor in Luhansk region conducted a state supervision event in the form of an inspection visit to a private enterprise.
During the inspection visit, it was established that 5 people work in the private enterprise without an employment contract. This is a violation of the first part of Article 21 of the Labor Code of Ukraine (hereinafter referred to as the Labor Code). In addition, it was established that these persons were admitted to work without concluding an employment contract drawn up by an order or decree of the owner or a body authorized by him, and a notification to the central executive body on issues of ensuring the formation and implementation of state policy on the administration of a single contribution to mandatory state insurance on acceptance employee to work in accordance with the procedure established by the Cabinet of Ministers of Ukraine, which is a violation of the third part of Article 24 of the Labor Code.
In connection with the detected violations of the labor legislation, the Territorial Department of State Labor in Luhansk Region issued a resolution imposing a fine on the employer, in accordance with paragraph 2 of the second part of Article 265 of the Labor Code, in the amount of 625,950 thousand hryvnias.
The business entity did not agree with the rendered decision and appealed to the court with a lawsuit to protect the rights and interests violated, in his opinion.Courts of previous instances established the following regarding the content of contracts concluded by a private enterprise with 5 employees:
employees do not have information about the specific scope of work that is the subject of concluded contracts (end result);
it is not defined in what way the customer issues work tasks; there are no specific deadlines for the work;
what is the specific result of the work that the contractor must deliver to the customer;
in the studied contracts, the subject is the labor process, which natural persons must systematically perform, which is also evidenced by the monthly renegotiation of these contracts.
Courts of previous instances came to the conclusion that the above contracts indicate the permanent nature of the work performed and the monthly payment to individuals in a clearly defined amount, regardless of the volume of work performed.
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On July 28, 2021, the Supreme Court of Ukraine issued a ruling in case No. 360/1845/19, rejecting the cassation appeal of a private enterprise, and confirmed the legality of issuing a ruling imposing a fine on a private enterprise in the amount of UAH 625,950.00.
At the same time, the Court decided to leave unchanged the decision of the First Administrative Court of Appeal, according to which the decision of the Luhansk District Administrative Court and the additional decision of the Luhansk District Administrative Court were canceled and a new one was adopted, which rejected the claim and the request of the representative of the Private Enterprise for reimbursement of court costs.
