A European technology company with a Ukrainian subsidiary discovered a critical gap in its workforce operations. A senior local employee had been dismissed without the correct dismissal notice period, and without a properly documented termination procedure. The employee filed a formal reinstatement claim through the Ukrainian court system. The employer faced exposure under Ukraine's employment legislation – including liability for unpaid wages, social security arrears, and potential reinstatement orders.
Employment disputes in Ukraine are governed by a detailed body of employment legislation that sets strict requirements for dismissal notice, termination procedure, and documentation of the employment contract. Courts in Ukraine consistently rule in favour of employees where procedural steps have been skipped or are poorly evidenced. International employers without in-country legal support face a high risk of adverse judgments within three to six months of a claim being filed.
This case study outlines how Ferraz & Whitmore structured the legal response, the milestones encountered, and the lessons that apply to similar cross-border employment matters in CIS jurisdictions. For an overview of the applicable legal system, see our dedicated page on employment law in Ukraine.
Client profile and the challenge
The client was a mid-sized European technology group operating through a Ukrainian wholly owned subsidiary. The subsidiary employed several dozen staff under local employment contracts governed by Ukrainian labour legislation. The dismissed employee held a senior engineering role and had been employed for over four years.
The dismissal was initiated after a restructuring of the subsidiary's product team. Management issued a verbal notice and followed an internal HR procedure designed for another jurisdiction. No written dismissal notice was served in accordance with Ukrainian employment legislation. The employment contract contained a collective agreement reference that imposed additional procedural obligations. These were not observed.
The employee filed a claim in the local district court within one month of dismissal – well within the limitation period set by Ukrainian employment legislation. The claim sought reinstatement, back pay, and compensation for moral damages. The employer's exposure was material: unpaid salary for the dispute period accumulates until a court ruling is issued.
Legal strategy and rationale
Ferraz & Whitmore was retained approximately two weeks after the claim was served. The immediate priority was an audit of all documentation – the employment contract, the internal termination order, HR records, and any communications referencing the dismissal. The audit identified three procedural defects: absence of written dismissal notice, failure to observe the notice period specified in the collective agreement, and incomplete social security filing at the point of termination.
The strategic options were assessed in two directions. The first was to contest the claim on the merits – arguing that the grounds for dismissal were substantively valid even if the procedure was imperfect. Ukrainian courts do give weight to substantive grounds. However, the procedural record was weak, and the risk of reinstatement was assessed as meaningful. The second option was a negotiated settlement that would resolve both the claim and the outstanding social security position.
The team recommended a structured settlement approach. This preserved the employer's ability to draw a line under the matter without the uncertainty of a full court hearing. It also avoided the reputational consequences of a reinstatement order – which, under Ukrainian employment legislation, is self-executing and requires the employer to restore the employee to their position pending any appeal.
For businesses with related concerns about entity structure and liability exposure in Ukraine, our analysis of corporate law in Ukraine addresses the interaction between subsidiary governance and employment risk.
Key milestones and complications encountered
The first milestone was filing a formal procedural response within the court-imposed deadline – typically 10 to 15 working days from service of the claim. Missing this window would have left the employer without a voice in the preliminary hearing. The response challenged the valuation of damages and disputed the moral compensation claim on factual grounds.
The main complication arose from the collective agreement. The agreement imposed a consultative obligation with the employee's representative body before any dismissal could be initiated. No such consultation had occurred. Ukrainian courts treat collective agreement obligations as mandatory. This significantly narrowed the employer's procedural defence.
A secondary complication involved the social security records. The termination had not been correctly logged with the relevant state authority within the statutory period. This created a secondary liability exposure that required a corrective filing alongside the main litigation strategy.
Settlement negotiations began at the second preliminary hearing – approximately six weeks after the initial claim. The employee's position evolved once the financial risks of protracted litigation were explained. A settlement was reached before the substantive hearing. The terms included a compensation payment, correction of the employment contract exit records, and regularisation of the social security position. The court approved the settlement at the subsequent session.
Total elapsed time from claim service to court-approved settlement: approximately three months. This is within the faster band for employment disputes in Ukraine – contested matters frequently extend to nine months or more when procedural defects are compounded by evidentiary gaps.
To receive an expert assessment of your employment dispute exposure in Ukraine, contact us at info@ferrazwhitmore.com.
Three transferable lessons for cross-border employment matters
Lesson 1: Termination procedure must be jurisdiction-specific. International employers frequently apply a single group-wide HR protocol to all subsidiaries. In Ukraine, employment legislation sets mandatory procedural requirements for dismissal notice and termination procedure that differ materially from Western European standards. A procedure that is legally sound in one jurisdiction may be wholly defective in another. Each termination in a CIS jurisdiction should be reviewed against local employment legislation before the notice is issued.
Lesson 2: Collective agreements create binding procedural obligations. Where a collective agreement is in place, its procedural requirements are enforceable alongside the statutory employment contract obligations. Ukrainian courts do not treat collective agreement provisions as aspirational. Employers who dismiss without consulting the relevant body face a near-certain procedural finding against them. Auditing collective agreement obligations before any restructuring event is essential.
Lesson 3: Early legal intervention changes the risk calculus. The employer in this matter was retained legal support within two weeks of the claim. This allowed a strategic assessment before the first hearing. Employers who engage a lawyer in Ukraine only after the first substantive hearing have already lost the opportunity to shape the procedural record. The cost of early intervention is a fraction of the exposure created by a reinstatement order or an adverse judgment on accumulated back pay. For comparable CIS disputes, see our related case study on employment dispute resolution in Russia.
About Ferraz & Whitmore
Ferraz & Whitmore is an international law firm based in Lisbon, advising business clients across 46 jurisdictions. Our employment law practice supports international employers managing workforce matters across CIS, European, and Asia-Pacific markets. The firm's team combines Portuguese civil law expertise with English common law tradition. a dual perspective that is particularly valuable when advising clients on CIS employment legislation, where procedural compliance intersects with civil law doctrine. Our practitioners have experience before Ukrainian courts and in settlement negotiations under Ukrainian employment and social security legislation. We work with international groups, in-house legal teams, and institutional investors who require results-oriented counsel across multiple legal systems. To discuss your situation in Ukraine or across CIS jurisdictions, contact us at info@ferrazwhitmore.com.
Disclaimer: This publication is provided for informational purposes only and does not constitute legal advice. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. Ferraz & Whitmore assumes no liability for actions taken or not taken based on the contents of this material. For advice regarding your particular situation, please contact info@ferrazwhitmore.com.