Disguised employment: how Mariupol employer mistakenly concluded civil law contracts instead of labour contracts

Within the framework of the State Labour Service's “Go to Light!” information campaign, labour inspectors explain to employers why and how employment relationship should be correctly formalized.



Private entrepreneur Iryna (name changed) has a tailor shop making working clothes in Mariupol. Before the SLS inspection visit, she thought she was complying with labour legislation scrupulously. However, the inspectors found some violations in the formalization of employees.

I never used hired labour without formalization. I paid taxes diligently. However, I often concluded civil law contracts"

she says

During their visit, the labour inspectors explained to Iryna that employment relationship is regulated by the Code of Labour Laws, not by the Civil Code. Therefore, a labour contract should always be concluded in the worker-employer relations. A civil law contract, on the contrary, may be concluded with an independent contractor being a legal entity or an individual.

Since then, Iryna has been concluding mainly fixed-term labour contracts with her employees. Due to that, the employees can enjoy all the social guarantees and rights provided for by the labour legislation.

It is good for me as well because it allows me to avoid large fines for violations of the labour legislation. It is better to invest that money in business and to raise wages of workers,"

Iryna believes

I am grateful to the labour inspectors for having visited me with explanations and providing information booklets. It is face-to-face communication and being able to ask additional questions that influenced my choice of concluding solely labour contracts with employees,"

she adds.

Read more about declared work benefits at the SLS website. If you need advice, approach a labour inspector.

The “Go to Light!” information campaign is supported by the EU-ILO Project “Towards safe, healthy and declared work in Ukraine”.

More stories