The Employment Contract In IT

Activities in the field of information technology are profitable and relevant now. It is not difficult to start up an IT company in Ukraine, but doing IT business could cause a complexity and confusion. One of the difficult issues is the formalization of labor relations with employees. Unfortunately, the Ukrainian labor law consists of many Soviet laws that do not meet modern realities and cause difficulties in practice.

Usually between employer and employee concludes an employment contract. Under Article 21 of Labor Code of Ukraine the employment contract is an agreement entered into between the employee and the owner of enterprise, institution or organization or authorized by him/her body or individual according to which the employee shall undertake to perform work determined in this agreement subject to observance of internal regulations, and the owner of enterprise, institution or organization or authorized by him/her body or individual shall undertake to pay the employee salary and provide working conditions required for performance of work as prescribed by labor legislation, collective contract and agreement of the parties.

Often IT sector employees would like to work distantly. However, the question of distance work is not actually resolved in Ukraine. The valid legislation provides for the possibility of homework only. According to p. 1 of Regulation on working conditions of homeworkers (approved by State committee of the labor №275/17-99 of 29/09/1981) homeworkers are persons who have signed an employment contract to work personally at home and use materials and tools that were purchased by the employer. The labor laws apply to homeworkers. The work of homeworkers usually involves production of consumer goods, provision of certain services to citizens and enterprises. Unfortunately, the Regulation on working conditions of homeworkers is already outdated and ignores current realities. Therefore the question of distance worker should be regulated by the employment contract.

Another important issue for workers in the IT sector is flexible working hours, when the employee can freely choose the start and the end of working hours during the day. Studies confirm the effectiveness of flexible work schedule establishment; because it allows the employee to independently organize its working mode, while successfully solving their personal or family issues. Instead, the regulation of flextime is not as exciting as the expectation of the establishment of that mode for the employee. In the Labor Code of Ukraine there is no any provisions for the flexible working schedule, but only provides the possibility of its establishment through fixing in internal regulations or collective agreements the beginning and ending time of daily work both for a company and for certain categories of workers (Art. 57 of the Labor Code), the division of working day into parts (Art. 60 of the Labor Code), break for rest and meal (Art. 66 of the Labor Code).

The main act, which regulates flexible working schedule if Guidelines for the establishment of a flexible mode of work, approved by the Ministry of Labour and Social Policy of Ukraine of 04.10.2006 p. №359. The employee’s working time according to the flexible mode is divided into three components: 1) a fixed time – a time when the employee must be at work and perform his/her direct functions; 2) variable time – a time when an employee can start and finish his/her working day at his/her discretion; 3) a break for rest and meal, which can range from 30 minutes till 2 hours (this time an employee uses at its discretion and may be absent in the workplace). An obligatory condition for flexible mode of work is the implementation of working hours in accordance with the established accounting period. The accounting period may be a day, week, month, quarter, and so on. Flexible working time mode can be set in the employment contract and be formed as the order of the employer.

If you have any question about the employment contract in the IT sector, feel free to contact us.

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