The Labor Code of Ukraine was recently amended to require notification of employees (through trade unions or employee representatives) when a transfer of a business entity-employer occurs. The new law specifies the situations that qualify as such a transfer, including a change of ownership of the employer, reorganization (acquisition, merger, spin-off, division, transformation, etc.), and a change in ownership or use of the assets utilized by the employer.
The notification must include the anticipated date of the transfer, its reasoning, the potential consequences for the workforce, proposed measures to mitigate negative impacts, and must be provided at least 10 days before the completion of the transaction.
The law grants trade unions or employee representatives the right to initiate consultations with the parties involved in the transaction regarding the impact of the anticipated change of control on employees’ terms of work and rights. The law allows five days for these consultations, which (if initiated) should be concluded with mutually agreed minutes.
Otherwise, employment relationships continue unchanged due to the transfer. If any changes to essential working terms connected with transfer of business are expected, employees must be notified at least 2 months in advance.
These changes aim to align Ukrainian labor law with EU Directive 2001/23/EC, dated 12 March 2001 relating to the safeguarding of employees’ rights in the event of transfers of undertakings, businesses or parts thereof.