Valeriia Gudiy, Attorney at Law, Partner at Ilyashev & Partners Law Firm

Despite the unprecedented disruption caused by the full-scale war, Ukraine has not undergone a comprehensive reform of its labour legislation. The country still applies a Soviet-era framework dating back to 1971 – the Code of Labour Laws of Ukraine. However, the realities of wartime forced the legislator to introduce specific rules to enhance and simplify the relationship between employers and employees under martial law.

In 2022, Ukraine adopted the Law of Ukraine “On the Organization of Labour Relations under Martial Law,” introducing a special legal regime designed to ensure business continuity and workforce stability under extreme conditions. The statute of this law became the foundation for regulating the new realities of the labour market and introduced certain special and useful features of employment relations across enterprises, institutions, and organizations.

In practice, this law has evolved into a flexible toolkit that allows employers to maintain operations, mitigate risks, and preserve human capital. At Ilyashev & Partners, we monitor these changes daily, ensuring our clients – both international and domestic – utilize these mechanisms to build resilient, legally compliant business strategies.

Key Wartime Tools for Employers: Practical Insights

Several mechanisms introduced during martial law have proven critical for business resilience. For international businesses and local employers alike, these tools are no longer exceptional – they have become part of an everyday legal strategy:

  • Suspension of employment agreements: A vital alternative to termination.
  • Flexible communication tools: Legalized use of email, messengers, and digital platforms for HR processes.
  • Simplified HR administration: Streamlined procedures in regions affected by hostilities.
  • Agile working conditions: Rapid changes to terms of employment without the traditional lengthy notice periods.
  • Temporary transfers: The ability to reassign employees without consent (subject to specific legal limitations).
  • Force Majeure protection: Shielding employers from liability for wage delays caused by objective wartime circumstances.
  • Dismissal restrictions: Legal safeguards in combat-affected regions.

The Strategy of Suspension vs. Termination

The full-scale armed aggression made it impossible for many employees to perform their job functions. At the beginning of the war, the only lawful way to avoid conflict between the employer and the employee was to take leave, but such leave could not be a permanent solution. One of the most impactful innovations has been the ability to suspend employment agreements.

Unlike termination, suspension allows businesses to:

  • Retain employees without ongoing salary obligations.
  • Avoid the legal risks and social costs associated with mass dismissals.
  • Quickly resume operations when conditions stabilize.

When an employment agreement is suspended, an employee temporarily does not perform labour duties, and the employer is not obliged to pay salary, provide guarantees, or ensure working conditions as required by standard labour legislation. However, this mechanism requires precise documentation to avoid future litigation. Experts at Ilyashev & Partners regularly assist in drafting the necessary internal regulations to ensure these actions are legally airtight.

Digitalization of HR: Beyond Paperwork

Wartime realities have accelerated a long-overdue shift toward digital HR processes. While the formal requirement for written documentation remains, it is now permissible, by mutual agreement, to exchange documents via messengers, email, or official company websites.

This flexibility significantly reduces administrative burdens and ensures business continuity during relocation or infrastructure disruptions. Crucially, both parties must keep their contact details updated – a compliance element often overlooked by businesses, which can lead to significant legal vulnerabilities.

Evolving Flexibility and Employee Protection

Flexibility also characterizes the rules regarding changes to working conditions. Employers gained the right to temporarily transfer an employee to another job without their consent if required by circumstances (excluding transfers to areas of active hostilities).

Furthermore, employees should be notified of changes to working conditions or remuneration no later than the moment such changes take effect. For comparison, under the general rule of the Labour Code before the war, employees had to be notified two months in advance. At the same time, the law preserves key employee protections: employees cannot be dismissed for absence if they are located in active combat zones, and employers are shielded from liability only where delays are genuinely caused by force majeure.

Looking Ahead: Building Sustainable Operations

In the early months of the war, the priority was survival. Today, the focus has shifted. Businesses are increasingly asking how to scale operations, how to hire and retain talent, and how to structure flexible or cross-border work arrangements. The labour market itself is transforming: we see increased participation of women in the workforce, the integration of veterans, and a growing demand for hybrid employment models.

For investors, Ukraine’s labour regime offers a unique case study in legal adaptability under extreme conditions. Many wartime mechanisms are likely to influence future labour law reform in Ukraine. The current system demonstrates that flexibility and employee protection can coexist, even under the most challenging circumstances.

For international clients and investors, understanding these tools is not just a matter of compliance – it is essential for building sustainable and scalable operations in Ukraine. If your business requires strategic guidance in navigating these complex labour regulations, Ilyashev & Partners’ team is ready to provide the necessary support.

Ilyashev & Partners is a leading Ukrainian law firm providing employment law services in Ukraine, advising international and domestic clients on labour law compliance, HR strategy, and workforce management in Ukraine. The firm supports businesses in all aspects of employment relations in Ukraine, including hiring, termination, working conditions, remuneration, and internal HR policies, ensuring compliance with Ukrainian labour legislation.

A core focus of our practice is labour relations under martial law in Ukraine, including application of the Law of Ukraine “On the Organization of Labour Relations under Martial Law.” We advise on key wartime mechanisms such as suspension of employment agreements, flexible working conditions, digital HR processes, and force majeure protections, helping businesses maintain operations and reduce legal risks.

We also represent clients in employment disputes in Ukraine and advise on workforce restructuring, internal investigations, and cross-border employment arrangements. With strong expertise in employment law in Ukraine during wartime, Ilyashev & Partners helps clients ensure compliance, mitigate risks, and build sustainable workforce strategies.

To learn more, please visit the Ilyashev & Partners Law Firm website or contact Valeriia Gudiy directly.

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