The employee is always the weaker party in labor relations, because it is the owner who determines the nature, regime and conditions of work, wages, the procedure for calculating fees and penalties. Taking into account the above, the Basic Law of Ukraine guarantees protection against illegal dismissal to all workers. In the case of abuse on the part of the owner, the employee, among other things, has the right to demand compensation for moral damage in the case when illegal dismissal led to his (her) suffering. The purpose of our article is to determine the specifics of compensation for moral damage, caused under the specified circumstances. In the course of the research, the conditions, under which moral damage at dismissal is deemed to have been caused by, were clarified. The grounds for the establishment of labor relations, which are an employment agreement, a contract as a specific form of an employment agreement, and a civil law contract, were defined. It is proved, that the fact of being in an employment relationship can be established extra judicially (by conducting negotiations with the employer or sending appeals simultaneously to the territorial bodies of the State Labor Service of Ukraine and the State Tax Service of Ukraine) or in court (on the basis of Article 315 of the Code of Civil Procedure Code of Ukraine). It is established, that moral suffering of the person, who was illegally dismissed, can be manifested in the victim's negative mental states (stress, depression, anxiety), which are reflected in his (her) consciousness. It is substantiated, that Ukrainian legislation does not directly list actions causing employee’s suffering; however, the Labor Code of Ukraine does not contain any restrictions or exclusions for compensation for moral damage in case of violation of the latter's labor rights. It is stated, that a three-month time limit applies to claims for moral damages in cases, provided for by labor legislation. However, in the case of exceeding it for valid reasons, the district, district in the city, city or city and district court may reinstate it