News

02-12-2015

Perspective of Cancellation of Employment Record Books: Prospects for Employers

Perspective of Cancellation of Employment Record Books: Prospects for Employers

The idea of cancellation of employment record books was made public by Aivaras Abromavičius, Minister of Economic Development and Trade, in August this year. It was supported by the Ministry of Social Policy, however reminding of the legislative inconsistencies. The institution emphasized that the length of employment without an employment record book can be only counted in Ukraine from 2000.

By naming record books as ‘Soviet heritage’, the Minister showed once again that his institution did not ‘waste words’. As a result, on November 24, the Cabinet of Ministers of Ukraine submitted for consideration of the Verkhovna Rada of Ukraine a draft Law No. 3507 “On Amending Certain Legislative Acts of Ukraine on the Facilitation of Staff Management by Taxpayers”, prepared by the Ministry of Economic Development and Trade.

It should be noted that despite the controversial opinions on the part of trade-union officials and even statements of blocking the decision if approved by the Cabinet of Ministers, the draft Law was agreed with the Federation of Employers of Ukraine and Federation of Trade Unions of Ukraine with some comments which were partially taken into account.

The document provides for making relevant amendments to the Labor Code, as well as to a score of other Ukrainian laws. If the law is adopted, then instead of an employment record book, employee’s service record will be carried out electronically in the register of insured persons of the State Register of Compulsory State Social Insurance. The procedure for this electronic accounting shall be established by the Cabinet of Ministers.

According to the draft law, in case of employment, it would be enough to produce a passport or any other identity document, application and resume in free format containing information on the education, work experience and professional skills.

The Law “On the Collection and Accounting of Compulsory State Social Insurance Contribution” suggests widening of the list of the employee’s details to be entered into the register. In particular, personal record card of an insured employee should include the following additional information:

  • unique number of the electronic personal record card of the insured person;
  • passport series and number;
  • place of registration;
  • pension payment location;
  • information on the dependent family members of the insured person and his/her children.

 

In addition, it is proposed that the personal record card should include information required to calculate and assign insurance payments:

  • amount of disbursements (income) on which insurance contributions were paid for the respective month;
  • period of labor relations;
  • sum of the periods of pension insurance record;
  • details of labor relations (hiring, grade assignment, transfer to another job, dismissal);
  • number of worked calendar days for the respective month;
  • education;
  • profession;
  • job title, specifying the structural unit;
  • information about the principal place of business;
  • details of voluntary payment of the single contribution under the voluntary participation agreement;
  • information on the previous convictions (if any outstanding);
  • information on the obtained employment record.

One of the main predicted outcomes of the adoption of the instrument is that liquidation of employment record books would significantly facilitate the work of HR officers. In addition, officials state that creation of the electronic register of service records of citizens will allow minimization of the human resource expenditures in preparing documentation when registering an individual at a specific job, which is in compliance with international practices.

Details of employees’ service record will be included in the State Register of Compulsory State Social Insurance during 5 years on the basis of data provided in accordance with the procedure and within the time limits as established by the Pension Fund of Ukraine, as agreed with the central executive authority which ensures formation of the state policy in the area of labor relations and social protection of population.

Considering the number of corrections to be made to regulatory documents, as well as rather low involvement of employers and employees in the electronic interaction format, probability of situations where employment record book would be the only argument in the labor relations remains rather high.

Suggested effective date of the law – July 16, 2016.

Igor Chernyshenko, Spenser & Kauffmann, Partner