The employer owes the employees salaries for two months, citing force majeure due to the war in the country. Whether such justification is legitimate and what consequences this violation of labor legislation may have read further.
Force majeure as a basis for delaying the fulfillment of obligations
As a general rule, force majeure is the basis for exemption from liability for failure to fulfill an obligation.
Labor legislation obliges employers to pay salaries to employees regularly, at least twice a month. For violation of the established terms of salary payment, the employer may be fined, brought to administrative or even criminal liability.
According to Art. 115 of the Labor Code of Ukraine (hereinafter – the Labor Code), salaries are paid to employees regularly on working days within the terms established by a collective agreement or a regulatory act of the employer, agreed with the elected body of the primary trade union organization or another body authorized to represent the labor collective (and in the absence of such bodies – by representatives elected and authorized by the labor collective), but not less than twice a month after a period of time not exceeding sixteen calendar days, and not later than seven days after the end of the period for which the payment is made.
However, as of today, many companies are not functioning due to active hostilities. Accordingly, such enterprises do not make a profit and often do not have the funds to pay salaries. However, in such a case, the employers cannot pay the salary on time not due to their own fault, but due to objective, force majeure circumstances beyond their control.
Article 10 of the Law of Ukraine “On the Organization of Labor Relations in Martial Law” No. 2136-IX of March 15, 2022 stipulates that the employer must take all possible measures to ensure the realization of the right of employees to timely receipt of salaries.
The employer is released from responsibility for the violation of the obligation regarding the terms of payment of labor, if it proves that this violation occurred as a result of hostilities or in case of other circumstances of force majeure.
Force majeure circumstances (unforeseeable circumstances) are extraordinary and unavoidable circumstances that objectively make it impossible to fulfill the obligations stipulated in the terms of the agreement (contract, treaty, etc.), obligations according to legislative and other regulatory acts. Force majeure includes the following (Part 2 of Article 141 of Law of Ukraine “On Chambers of Commerce and Industry in Ukraine” No. 671/97-ВР of December 2, 1997):
1) natural phenomena of a spontaneous nature;
2) emergency (extreme) situations in public life (threat of war, armed conflict or serious threat of such a conflict, including but not limited to enemy attacks, blockades, military embargoes, actions of a foreign enemy, general military mobilization, hostilities, declared and undeclared war, acts of a public enemy, disturbances, acts of terrorism, sabotage, piracy, disorder, invasions, blockades, revolutions, mutinies, insurrections, riots, expropriations, compulsory takings, seizure of enterprises, requisitions, public demonstrations, blockades, strikes, accidents, illegal actions of third parties, fire, explosion);
3) prohibitive actions (acts) of the state (introduction of a curfew, quarantine established by the Cabinet of Ministers of Ukraine, long interruptions in the operation of transport, regulated by the terms of relevant decisions and acts of state authorities, closure of sea canals, embargoes, prohibition (restriction) of export/import, etc.).
Releasing the employers from responsibility for late payment does not release them from the obligation to pay salaries. In case of impossibility of timely payment of salaries as a result of hostilities, the term of payment of salaries may be postponed until the time of resumption of the enterprise’s activities.
