On 23 June 2017, a draft law introducing a number of substantive changes to the regulation of collective bargaining agreements (“CBA”) was introduced to the Ukrainian Parliament and is awaiting further review (the “Draft Law”).

The Draft Law aims to implement two major changes to CBA procedures:

1. The duration of CBAs will be three years and may be further extended by a maximum of a further three-year period (currently there is no maximum duration);
2. If parties fail to extend the term of the CBA or re-conclude a new one, the CBA will continue in effect for one year (currently it remains valid for an indefinite period).

The new rules of the Draft Law, if adopted, will apply to all new CBAs and those that are in effect for more than three years.

Although the Draft Law is expected to bring about positive changes by making CBAs more in line with the needs of both personnel and their employing companies, it still has to undergo scrutiny in the form of parliamentary reviews.  

Legislation: The Draft Law ‘On amendments to certain legislative act of Ukraine regarding collective bargaining agreements legal mechanism’.

Authors:

Olexander Martinenko, Senior Partner, olexander.martinenko@cms-cmno.com

Natalia Nakonechna, Senior Associate, nataliya.nakonechna@cms-cmno.com

Maria Orlyk, Partner, maria.orlyk@cms-rrh.com

Mykola Heletiy, Associate, mykola.heletiy@cms-cmno.com