OPINION: What Companies Should Know about Exemptions from Conscription

It is difficult enough to continue normal operations in an environment torn apart by COVID-19 and then a full-blown war.  To make things more complicated, your employees may be targeted for conscription into the armed forces, making the work environment even more challenging. 

However, there are steps a company can take to keep a hold of its workforce particularly not to give up critically important employees to the war effort.  Let’s explore the options.

The Law of Ukraine “On General Military Duty and Military Service” establishes the term of contractual military service during mobilization or martial law. This law provides a wide overview of situations where employees may be conscripted due to age, health, fitness and other factors. It also governs situations where an individual has volunteered to be contracted to serve in the military. 

Under martial law, such contracts are extended beyond their initially established terms during mobilization and until the announcement of demobilization.  This means that your employee’s contract for military service can be terminated prior to cancellation of martial law in Ukraine only in specific cases. Many cases are based on factors like age, health, substantiated family circumstances, court orders, etc.

But, what if your employee’s work is critical to the economy, the war effort and your organization?  Can you "reserve" these workers and avoid their conscription into the armed forces?

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In January 2023 the Cabinet of Ministers of Ukraine released a decree, which was revised in April 2023, explaining the law on mobilization in regard to “reservation" occupations” of employees during mobilization and wartime.  In effect, this allows employers to keep their employees at work if their companies, organizations or institutions are vital to the Ukrainian economy during these difficult times.

The Ministry of Economy is responsible for processing applications from companies for the retention of their employees to continue operations crucial to the needs of the country.  The employees are screened by the Ministry according to lists approved by the General Staff of the Armed Forces or, in certain cases, the State Security Service or Foreign Intelligence Service.

The applicant company needs to fill out certain forms and prepare the lists of employees it wishes to retain.  The request requires justification why employees need to be held and, therefore, the applicant should be prepared to fully substantiate that need.  Employees can be reserved for the period of mobilization or six months, depending on their category of importance.

In most cases, companies that are critical to the Ukrainian economy and well-being can reserve up to 50 percent of their employees. In certain verified cases, a company can reserve more than 50 percent of their employees. This depends on the documents submitted for substantiation of the company’s importance to continue its operations under martial law. It may require a legal or accounting firm’s assistance.

The priority operations for companies that wish to reserve employees are those involved in the provision of works and services necessary for strengthening the needs of the armed forces and other related organizations. Accordingly, these operations need to be substantiated in the application forms with reasons why the employees are vital to continue their work. In many cases, a contract with the government can demonstrate the need to carry on operations with all employees in place.

As an example, employees involved in the energy and fuel, healthcare, education and scientific sectors are usually not subjected to conscription, provided the company is included in the list registered with the Ministry of Energy. Employees of such companies are exempt from the draft regardless of military rank, age and profession. By and large, UN institutions, embassies, representative offices of donor institutions, international technical assistance projects, NGOs, and humanitarian aid projects critical to the Ukrainian economy can be exempted from sending their essential employees to the war.

Does your company meet the requirements for “critically important” to the Ukrainian economy and well-being? Consider the following criteria of which your comany should meet at least two factors:

·      Your company, institution or organization has tax responsibilities (including unfied social contributions) which exceed €1.5 million or the amount of foreign currency revenues exceeds €32 million;

·      Your company is strategically vital to the economy and security of Ukraine and is included in the Cabinet of Minister’s list of such companies (this can be related to mostly state-owned companies, but the list is not exhaustive);

·      Your company meets the needs of local communities according to the local authorities;

·      Your company has been diligent in paying the unified social tax on behalf of all employees;

·      Your company’s salary policy meets or exceeds the regional average salary for employees;

·      Your company is registered as a Diya resident.

There are numerous small hurdles you may face, but with diligence and persistence you can resolve them. The procedure should not take more than 10 business days from the date of the filing of the application's. If you feel that your company is of vital importance to the Ukrainian effort to end the Russian Federation’s invasion, you might consider legal and/or fiscal assistance in including your company onto the list of companies that can reserve their employee from the draft.

Elena Avramenko is an attorney at law at Frishberg & Partners, Kyiv, Ukraine.

The views expressed in this opinion article are the author’s and not necessarily those of Kyiv Post