Ukraine: the Supreme Court Grand Chamber affirms the right to "unlimited" compensation for wrongful termination

The Supreme Court Grand Chamber (the "Chamber"), which is the judicial body to consider the most complex and controversial cases, ruled that a new job with the higher salary of a wrongfully terminated employee may not serve as a ground to limit the employee's entitlement for unearned wages from the ex-employer. The said conclusion stems from the recently published decision of the Chamber dated 20 June 2018, whereby the Chamber removed a widespread inconsistency in approaches of Ukrainian courts in similar cases.

Recovery of unearned wages together with job reinstatement are principal remedies that a wrongfully terminated employee may claim under Ukrainian labor law. The unearned wages comprise of the amount of the average wages the employee would have earned in the absence of the employee's wrongful termination. Local courts, however, often decreased the amount of the unearned wages compensation by the amount of the wages of the employee at the employee's new job or by the amount of unemployment benefits.

In the case at hand, the courts of lower instances affirmed that the employee's termination through redundancy was wrongful due to breach of the applicable statutory procedure. Nevertheless, the courts found that, promptly after the termination, the employee found a new job with a higher salary. Based on this, the courts rejected the employee's claim for the unearned wages recovery, as the employee's new salary for the period of consideration of the dispute exceeded the unearned wages claimed from the previous employer.

Upon review of the case, the Chamber ruled that the practice on limiting of the unearned wages entitlement is improper, as it is not expressly justified by any statutory provision. Instead, should there be a wrongful termination, the law guarantees the right for recovery of all unearned wages as such, and there are no grounds to limit this right. Thus, the Chamber granted the employee's claim on the unearned wages (comprising of salary for almost 15 months) in full.

While the said decision of the Chamber is a non-binding precedent, it is expected that local courts will follow similar approach when considering alike cases.


For further information please contact Asters' senior associate Inesa Letych.

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