Expert Opinion (#12 December 2017)

Obstacle Race: Dismissing Unionized Employees

by Inesa Letych

As a general tendency, the public perception of trade unions in Ukraine is rather ambiguous. On the one hand, there is common understanding of the primary role of trade unions as public institutions for protecting the rights and interests of employees. Therewith, the general public still recollects such historical features of trade unions as mandatory membership, unions disciplinary role, and, on many occasions, representation of an enterprise and its management rather than the workforce. This results in treatment of unions as a feature of old Soviet enterprises and, consequently, a view that unions do not operate within modern business.

Nevertheless, two types of trade unions currently exist in Ukraine: traditional ones that survived from Soviet times and the newly-created, or alternative ones. Alternative unions often appear within new businesses that emerged in the post-Soviet era, including both industrial sector and even office jobs. Moreover, new unions sometimes unite quite a small number of activists rather than the majority of a labor team.

Despite any differences between traditional and new trade unions, it is also a fact that legislation on the activities of unions is in certain respects quite old and outdated. Thus, alternative trade unions work within the traditional framework, the same one, intended for old, post-Soviet trade unions. This framework sometimes provides for quite outdated legal rules that transform trade unions from an instrument of protection to an instrument of conflict.

Perhaps, the mostly disputable provision of Ukrainian law in this respect is the one pertaining to prior consent of a trade union for dismissal of its members. Sadly, the Ukrainian employment market faced cases where a new trade union appeared promptly before prospective dismissals with the sole purpose of blocking them. In such a manner, the excessive protectiveness of the law towards an employee easily turned into a tool of abuse.

Role of trade unions in individual dismissals

Trade unions in Ukraine are easy to create: theLaw of Ukraine On Trade Unions, Their Rights, and Guarantees for Activities (the Trade Unions Law) stipulates that a newly-created trade union assumes its rights as of the moment of approval of its by-laws. Further inclusion of a trade union to a registry of public organizations is rather a formality, as the relevant state registrar is not empowered to refuse such inclusion. Furthermore, there are no requirements as to the minimum number of members needed to establish a trade union irrespective of the size of an enterprise. There is no need to represent a certain minimum percentage or employees for this either. Moreover, several trade unions may operate within a company and each employee may be a member of several or all of them.

Once there is a trade union, it has a right to protect the interests of its members at the appropriate level. Trade unions that act within an enterprise or are duly authorized to act at the level of the enterprise (as a so-called primary organization or representative of a union) have their role both in collective and individual dismissals.

Specifically, pursuant to the Labor Code of Ukraine (the Code), an employer shall obtain the prior consent of a trade union or union representative to dismiss any employee, who is a union member. This rule is further mirrored in the Trade Unions Law. The dismissal grounds, which demand the unions consent, include almost every instance when an employer acts as an initiating party for a dismissal. Particularly, these instances cover disciplinary dismissals, dismissals for performance reasons or for reasons of continued illness, as well as staff redundancies.

The Code, however, provides for certain exceptions when the unions permission is not mandatory, namely, dismissals in case of prospective liquidation of an enterprise, dismissals during a probationary period, dismissals of a CEO, chief accountant or their deputies, etc. Also, there is no need to get a unions consent for dismissal of employees of certain law-enforcement agencies and tax authorities.

Even stricter rules apply if an employer plans the dismissal of an employee who is a member of a unions management. Particularly, the law requires obtaining the unions consent for any type of dismissal of these employees and prohibits their dismissal on certain grounds within a year after termination of their role within a trade union.

However, it can be argued that the most important part of the above is that a unions refusal to grant permission for dismissal (the unions refusal) results in a ban on an employer dismissing the employee in question.

Union refusal as a possible instrument for manipulation

Legislative requirements pertaining to a trade union response regarding prospective dismissals (either in a form of a consent or refusal) are quite concise. Firstly, the law requires trade unions to comply with certain timeframes to react to any inquiries by management regarding dismissals. In addition, the Code and the Trade Unions Law stipulate that any union refusal shall be grounded. If a unions refusal lacks any reasoning for its issuance, an employer may proceed with a planned dismissal without the involvement of the trade union.

Potentially, the latter rule shall aim to protect the interests of an employer, in particular, from any obstructive and unreasonable behavior of trade unions towards a dismissal. However, from a practical standpoint this provision proved to be quite controversial. The problem is that neither the Code nor the Trade Unions Law provide for any guidelines on what a grounded refusal shall imply and what kind of reasoning is expected.

For instance, on literal reading of the Code and the Trade Unions Law, any non-legal explanations may qualify as sufficient reasoning behind a unions refusal. As an example, a trade union may refer to the poor financial standing or personal problems of an employee, which will expectedly result from his or her dismissal.

Another side of the problem is the quality of reasoning used for a union refusal. The thing is that neither the Code nor the Trade Unions Law specify whether the reasoning of a trade union shall correspond to true facts or represent a correct interpretation of labor law.

This matter is specifically important in light of the fact that Ukrainian labor law does not provide for a possibility to invalidate a duly issued union refusal as such. This implies that if a union refusal is duly issued and is grounded, this fact should suffice to block the relevant dismissal.

Sadly, there were many cases when the said problematic sides connected with union refusals allowed unions to block planned termination with no valid reason at all. However, despite the fact that Ukrainian legislation does not give clear answers to the questions mentioned above, the latter were repeatedly tested by local courts. Through years of legal battles and debates, the judicial system developed certain principles and legal arguments, which may potentially precondition a uniform and consistent approach in assessing whether a unions behavior is protection of employees or mere manipulation.

Practical tendencies

To be honest, current judicial practice in Ukraine on issues where trade unions countered individual dismissals still lacks consistency. However, the fact that many such cases were subject to review by the Supreme Court of Ukraine (the SCU) enables certain quite clear tendencies to be traced and to note some evolution of SCU approaches in this regard.

The SCUs explicit preference for necessary legal reasoning of a union refusal is the first tendency to reveal itself throughout its judgments. To name one of the earliest publicly available examples, in its Ruling of 4 April 2007 in Case No.6-1935704, the SCU concluded that a grounded refusal for dismissal implies argumentation that refers to labor law and the professional skills of an employee rather than to any other arguments. In the referred case, the SCU challenged a refusal to dismiss an employee for unreported absence from work, which a trade union grounded on a purported employers failure to provide vacations to this employee.

In its subsequent judgments, the SCU generally adhered to the approach on necessary legal reasoning for a union refusal in order to consider it to be grounded. The court evolved this approach further, stating that the legal reasoning contemplates pointing to violation of law in the course of a prospective dismissal rather than any other violation (for instance, the SCUs Ruling of 10 March 2011 in Case No.6-991008).

Another evolving tendency relates to the possibility of a court assessing the substance and quality of a unions refusal irrespective of the formal presence of appropriate reasoning. Until recently, Ukrainian courts were in general quite reluctant to evaluate the quality of legal reasoning behind union refusals. In particular, this approach is very well illustrated by the legal opinion of the SCU in case No.6-10414 of 24 October 2014. In this opinion, the SCU confirmed yet again that a unions refusal should be grounded. Nevertheless, the SCU also concluded on the absence of competence of a court to review and assess the appropriateness of such a grounded refusal. Thus, the said legal opinion implied that a fact of availability of a union refusal with a mere reference to allegedly violated legal provisions is sufficient in order to block the dismissal of the individual in question.

Although it may be convenient to say that this approach stems from the literal interpretation of the Code and the Trade Unions Law, its actual reasonability is rather questionable. In substance, the said approach gave rise to abusive conduct by many trade unions, up to the creation of unions for a specific purpose of blocking prospective dismissals.

Nevertheless, several months later, the SCU developed a modified route to consider similar cases. Pursuant to the legal opinion of the SCU in case No.6-70315 of 1 July 2015, a unions refusal primarily qualifies as one piece of evidence in a relevant case and, thus, may not have any preassigned meaning for this case. Consequently, a court may only draw a conclusion as to whether a union refusal is grounded or not, if the court (i) checks compliance of the refusal with labor law requirements; and (ii)verifies actual the circumstances of the case and ground for dismissal of an employee, as well as his or her professional skills. Thus, the SCU actually confirmed that the courts must assess the substance and quality of a unions refusal instead of mere verification of availability of any formal reasoning.

In the said legal opinion, the SCU further developed its arguments as to what qualifies as a grounded union refusal. The SCU concluded that a union refusal shall (i)be sufficiently and well substantiated; and (ii)refer to legal reasoning about unfair dismissal or an employers failure to consider certain facts, which led to unfair dismissal.

Thus, despite unclear wording and the apparent obsoleteness of legal provisions that regulate union refusals for individual dismissals, years of debate have given rise to reasonable and fair tendencies in judicial practice on these matters. Gradually, the SCU received the opportunity to draw a clear conclusion on the character of expected reasoning behind such refusals and, later on, to emphasize the necessity for courts to review and analyze the substance of such refusals. Such approaches in judicial practice will potentially eliminate the abusive behavior of trade unions and, on many occasions, move relations with trade unions from the field of conflict to that of constructive dialog.

By Inesa Letych is a senior associate at Asters

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