Termination of Powers of an Official as a Ground for Termination of an Employment Agreement (Contract) with a Manager: Features and Problems of Implementation

Abstract

In order to protect investments, rights and interests of investors, a number of legal acts were amended in 2014. In particular, a new ground was added to the list of additional grounds for termination of an employment agreement initiated by the employer – termination of powers of an official of the company, which accordingly entails termination of the employment agreement with such an official. However, an analysis of the case law on disputes over termination of an employment agreement with a manager initiated by the employer due to revocation of the official’s powers reveals a number of problems in the practical implementation of this provision.The authors of the publication identify the main problematic issues related to the revocation of powers as a ground for termination of an employment contract at the initiative of the employer, in particular, the procedure for revocation of powers and, accordingly, termination of an employment contract; jurisdiction over disputes on appealing such dismissal; determination of the circle of persons covered by the said ground; and compliance of such dismissal with international labour standards and the rule of law. An important aspect of this issue was and still is the distinction between labour relations and related legal relations of similar content.The authors contend that several challenges in law enforcement of revocation of an official’s powers as a ground for dismissal are caused not only by the quality of the formulated legal provision and relevant amendments to Ukrainian legislation, but also by the uncertainty and ambiguity of the legal status of a legal entity’s head in legal relations with the owner, the labour collective as a subject of labour law and a party to collective labour relations, and also with individual employees.The Supreme Court’s practice plays a significant role in resolving the issues related to the termination of an employment contract with a manager based on the revocation of powers. This practice is developing quite dynamically, although it lacks stability in the approaches to this issue.