Mobilization: Employee Reservation Procedure for Agricultural Enterprises

Valeriia Gudiy, Attorney at Law, Partner

Source: AgroPortal

The issue of reserving employees during mobilization, labor shortages, and emigration of workers to other countries is a key concern for agricultural enterprises.

Occasionally, government agencies refuse to make reservations due to improperly prepared and submitted documents, not to limitations on rights. How should agricultural enterprises reserve employees and are there legal ways to retain employees?

Revisions to the employee reservation procedure: what has changed?

Amendments to the Procedure for Reservation of Persons Liable for Military Service during Martial Law, approved by the Cabinet of Ministers of Ukraine Resolution No. 76 dated 27 January 2023, came into force on 17 May 2024.

The subject of the applicant is crucial in considering the issue of reservation. Not every enterprise has the right to reserve employees, since only the relation of the type of activity to agribusiness does not give such rights.

Additionally, companies should limit themselves to only 50% of those liable for military service, provided that all criteria are met and there are no restrictions on reservation based on their military specialties.

According to the provisions of Article 25 of the Law of Ukraine on Mobilization Training and Mobilization, in accordance with the Procedure for Reservation of Persons Liable for Military Service during Martial Law, employees liable for military service of the following enterprises may be offered reservations for the period of mobilization and martial law:

• those who are assigned mobilization tasks (orders), in the case where these tasks (orders) must be fulfilled;
• those who produce, perform, and provide services for the Armed Forces and other military formations;
• those who are critically important to the functioning of an economy and to the livelihoods of the population during special period.

How can a company obtain the status of critically important for reserving employees?

In order to receive the status of a critically important enterprise, an agricultural enterprise must meet three or more criteria specified in Ukraine’s Procedure and the Cabinet of Ministers of Ukraine Resolution No. 76 dated 27 January 2023. These include:

• in the reporting tax year, the total amount of taxes, fees, payments to the state and local budgets, excluding customs duties, and the single contribution for compulsory state social insurance exceed EUR 1.5 million, based on the weighted average official exchange rate of the National Bank for that period;
• in the reporting tax year, foreign currency revenues, excluding credits and loans, exceed EUR 32 million;
• the enterprise is of strategic importance for the economy and state security in accordance with the list of state-owned objects of strategic importance for the economy and security of the state, approved by Resolution No. 83 of the Cabinet of Ministers of Ukraine dated 4 March 2015;
• the enterprise is important for the national economy or in meeting the needs of the territorial community;
• there is no outstanding debt in payment of a single contribution for compulsory state social insurance;
• the average salary of insured employees at the enterprise for the last calendar quarter is not less than the average salary in the region for the IV quarter of 2021;
• the company is a resident of Diia.City.

For example, an agricultural enterprise that (1) is of great importance for the national economy or meets the needs of a territorial community and (2) does not have arrears in paying a single contribution to compulsory state social insurance, and (3) the average salary of insured employees at the enterprise for the last calendar quarter is not less than the average salary in the region for the IV quarter of 2021 (for example, in Kyiv region – UAH 15,566, Dnipropetrovsk region – UAH 14,456, Zhytomyr region – UAH 12,741) can apply for obtaining the status of a critically important enterprise, and therefore reserve employees.

Which criteria should be used to determine agricultural enterprises that are economically important?

A separate Order of the Ministry of Agrarian Policy No. 223 dated 21 February 2023, which is regularly amended, establishes the criteria for determining enterprises that are important in agriculture during a special period. The following criteria are relevant today.

Criterion 1:

• cultivation of agricultural land on an area of at least 500 hectares for agricultural activities, or
• the average number of insured employees is at least 20 persons, or
• supply of vegetable and/or field crop seeds, representation and activities on behalf of the subject of intellectual property rights on a plant variety (hereinafter referred to as the legal person) for more than 100 plant varieties in the State Register of Plant Varieties Suitable for Dissemination in Ukraine and supplies seeds of vegetable and/or field crops and has import volumes of such seeds to Ukraine for the annual period from 1 January 2023 to 31 December 2023 of more than UAH 30 million, or
• being in the management of the Ministry of Agrarian Policy or management of the state’s corporate rights in authorized capital, carried out by the Ministry of Agrarian Policy.

Criterion 2:

• production, processing and sale (export) of agricultural products, the main type of activity (as of 1 June 2023) according to the classification of types of economic activity (KVED) determined by the Ministry of Agrarian Policy, or
• production and/or supply of plant protection products (pesticides), seeds and/or planting material, veterinary drugs, fertilizers, agricultural machinery, equipment and spare parts for them, the main type of activity (as of 1 June 2023) as determined by the Ministry of Agrarian Policy of KVED, or
• production and technological processes for acceptance, cleaning, drying, storage, processing of grain, oilseeds and legumes, their processed products, the main type of activity (as of 1 June 2023) according to the KVED determined by the Ministry of Agrarian Policy, or production and sale of food products, drinks and tobacco products, the main activity (as of 1 June 2023) according to the KVED determined by the Ministry of Agrarian Policy, or
• fishing activities as the main type of activity (as of 1 June 2023) according to the KVED determined by the Ministry of Agrarian Policy, or
• scientific and technical activities to create conditions for increasing the efficiency of agricultural production and the level of food security of Ukraine, the main type of activity (as of 1 June 2023) according to the KVED determined by the Ministry of Agrarian Policy, or
• provision of partial guarantees for credit obligations of small and medium-sized businesses operating in agriculture, the main type of activity (as of 1 June 2023) according to the KVED determined by the Ministry of Agrarian Policy.

For the Ministry of Agrarian Policy to determine an enterprise as important for the national economy during a special period, it must meet the two criteria listed above.

If the enterprise’s activities meet two criteria, then in the absence of arrears in payment of the single social contribution and provided that the average salary of employees of such an enterprise is not less than the average salary in the region for the IV quarter of 2021, the agricultural enterprise will receive the status of critically important and can apply for the reservation of employees.

Reserving persons liable for military service: what do you need to know?

Reservations for military service have not changed in terms of procedure. As of today, reservations are carried out in accordance with the decision of the Ministry of Economy based on the lists of persons liable for military service which are offered for reservation for the period of mobilization and martial law, approved by the Ministry of Defense in accordance with the Procedure approved by the Cabinet of Ministers of Ukraine Resolution No. 76 dated 27 January 2023.

At the same time, starting from 18 May 2024, in pursuance of Clause 58 of the Procedure for Conscription of Citizens for Military Service During Mobilization for a Special Period, approved by the Cabinet of Ministers of Ukraine Resolution No. 560 dated 16 May 2024, enterprises are required to issue a deferment from military service during mobilization of workers liable for military service, who are reserved in accordance with the Procedure determined by the Cabinet of Ministers of Ukraine, in the district (city) territorial center of recruitment and social support, in the area of responsibility in which they are located.

The enterprise that has reserved employees must submit to the relevant territorial recruitment and social support center:

• petition from the head of the enterprise regarding the registration of a deferment from military service during the mobilization of those liable for military service, who are reserved in accordance with the procedure determined by the Cabinet of Ministers of Ukraine;
• extract from from the Ministry of Economy order on the reservation of persons liable for military service.

The above documents are sufficient to grant a deferment to a person liable for military service, and in accordance with the requirements of the above procedure, the employee does not need to submit a personal application to the recruitment center or apply for a deferment on the basis of reservation from the enterprise.