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Law Is on Hold. Ukrainian Laws that It Is High Time to Change

Date of publication: 18 January 2016

Maksym Kopeychykov, Attorney at Law, Partner
Source: Focus

The Parliament of Ireland has recently canceled 5,782 obsolete acts of legislation. What legal standards in the Ukrainian legislation it is time to declare obsolete?

Do you condemn the marriage of Henry VIII and Anne Boleyn? In this case, you could easily pass for a criminal in Ireland where, until recently, it was prohibited to speak disapprovingly about this marriage. The ban remained in force for centuries after death of both not too happy spouses. However, no one pursued violators, but one careless word about Henry and Anne could spoil the life of a modern Irishman. Fortunately, the obsolete decree had been abolished recently – just in case. Alongside with it the Irish Parliament canceled 5,782 obsolete acts of legislation.

It would be also advisable to clean something up in the Ukrainian legislation. The lawyers argue that the Labor Code inherited from the Soviet Union, as well as the Commercial Code, comprise a great curiosity, and it would not be a bad thing to edit the Land Code.

At the request of the Focus, Maksym Kopeychykov, partner at Ilyashev & Partners Law Firm, remembered the most vivid examples of Soviet vestiges in our legislation.

Dismissal with obstacles

What can prevent an employer from firing an employee, who bunks off, or simply does not have the necessary qualifications? Kinship, pity, incriminating evidence collected on the boss during a corporate party? It is much easier, namely the trade union organization, or lack of it in the enterprise. For example, a dressmaker, who is a clothing industry trade union member, came to work in a small private dress-making establishment, and it turned out that she makes curved stitches, she can not set button-holes, and generally she goes to work every second day. In accordance with Article 43 of the Labor Code to dismiss a negligent employee, the director of the dress-making establishment must find the trade union organization, in which she makes contributions, and agree termination of the labor agreement with that particular organization.

Damage is not chargeable from a wrongdoer

Let us take a closer look at a real-life situation. A cleaning woman, who put in order the premises of the restaurant, awkwardly spoiled industrial refrigeration unit worth more than 50 thousand hryvnias. Theoretically, she must compensate for the damage caused to the employer. However, according to the Labor Code the employee, who is not an officer (i.e. director, chief accountant or a member of the Supervisory Board), shall pay the amount not exceeding the monthly salary as compensation for damage. If a cleaning woman earns about 3 thousand hryvnias per month, the amount that will be collected from her will not even be enough to pay for equipment repair services, not to mention replacement of damaged parts.

The right of permanent land use

On what grounds can the company use the land plot? Capitalist logic suggests two options: ownership and rent (“advanced” capitalist can still remember something about perpetual lease, superficies and servitudes which came from Roman law, were absent in the Soviet doctrine of land law, but are now quite widely used). The Land Code of Ukraine also envisages the so-called right of permanent land use, the essence of which is not easy to explain to foreigners. In fact, it means that certain legal entity may receive forever a plot of land owned by the state or the local community without buying it or paying rent. Formally, however, the range of such persons is limited, but in practice many legal entities still use land plots according to the state acts on the right of permanent use of land issued in the Soviet times and in the 1990s.

Significant terms of lease agreement

Imagine that you are the owner of the office building with empty offices. It would be logical to lease them. Well, try it. First you need to draw up the relevant agreement. According to Article 284 of the Commercial Code of Ukraine, the agreement should specify the price of the object of contractual relations. How to determine the price of a single room in the office center? To divide the price of the office center by the number of rooms is not an option, the value of the premises depends on its designated purpose, location, and a dozen other factors. It will be necessary to call an expert- appraiser, and this is a paid service. Additional costs of the lessor incurred during execution of the agreement surely influence the amount of rent, and it makes the deal less profitable. A short-term lease completely loses any commercial sense.

The property that doesn’t exist

Section 10 of the Commercial Code of Ukraine is dedicated to collective enterprises. Most of the rules set out there regulate the activities of cooperatives. All would be fine, but the Constitution of Ukraine does not envisage collective ownership. Moreover, the Constitution was adopted seven years before the Commercial Code.

Notwithstanding the amusing nature of the rules specified, it must be said that the Ukrainian legislator gradually improves the quality of legal acts, e.g. in spring of 2015 (less than 20 years passed since the introduction of the national currency), the Verkhovna Rada finally deleted from the Code of Commercial Procedure the reference to the definition of the amount of claim “in foreign currency and in karbovanets according to the official exchange rate set by the National Bank of Ukraine on the day of filing a lawsuit”.