On 22 July 2015, the Cabinet of Ministers of Ukraine adopted Resolution No. 544 “On Approval of the Plan to Introduce and Enforce Martial Law in Ukraine or in its Certain Territories” (hereinafter – the “Plan”). Under Ukrainian law, martial law can be established by a Decree of the President of Ukraine which must be approved by the Verkhovna Rada of Ukraine. The establishment of martial law is grounds for temporary restrictions of the constitutional rights of individuals and legal entities. The Plan, in particular, establishes measures that concern employment relations, and therefore may significantly affect the normal business activities of companies.

Labour duty

Labour duty can be established by a separate military command obliging persons that are capable of work who are (1) not already engaged in work in the defence or the public infrastructure maintenance fields and (2) not reserved by enterprises for the period of martial law regime. The procedure to engage persons into such operations under martial law is determined by Resolution No. 753 of the Cabinet of Ministers of Ukraine “On Approval of the Procedure to Recruit Persons that Are Capable of Work to Socially Useful Work under Martial Law Conditions”, dated 13 July 2011. Labour duty consists of performing (1) work of a defensive nature, (2) work connected with emergencies, or (3) social work that meets the needs of the Armed Forces of Ukraine and other military units, law enforcement authorities, civil defence forces, etc. If an employee is engaged in labour duties during the period of martial law outside his/her work place, the company must preserve his/her current position.

Use of capacity and labour resources of a company

The Plan also provides for the possibility to use the capacity and manpower of enterprises of all forms of ownership for defence purposes and the right to change their mode of work or make other changes to production activities and work conditions during the period of martial law.

Restrictions on freedom of movement and changing residence (incl. temporary)

If martial law is introduced, the Plan provides for a special regime of entry and exit, and for certain restrictions on freedom of movement of persons and vehicles. Also, citizens who are registered in the relevant military commissariats will not be allowed to change their place of residence (or the place of temporary stay) without permission from the military commissariat or the head of the competent unit of security or intelligence service. Note that during wartime reservists are prohibited by law to leave their place of residence without permission from the relevant military commissariat.

Dismissal of company managers

Under the Plan, the CEO (Director) of any company can be removed from duty for improper performance of their duties established by martial law, and replaced with acting managers. Current laws do not specifically describe the duties of the Directors and stipulate only that companies must assist the activities of the military command and military administration with regard to the establishment and implementation of martial law measures. Therefore, there is a possibility that if martial law is established, the military command can dismiss any Director of any company.

Internment of foreign citizens

The Plan provides the Ukrainian government with the right to place citizens of foreign states into internment (compulsory settlement) if such state threatens the uses force or carries out an act of aggression against Ukraine. Therefore, the company may lose foreign employees that are citizens of states that threaten the use of force or carry out aggression against Ukraine.

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