RELEASE BY CONSENT OF THE PARTIES

In this article, we will tell you the main things you need to know about such a ground for dismissal as the consent of the parties.

The specified grounds for dismissal are provided for in Clause 1 of Part 1 of Article 36 of the Labor Code (hereinafter – “Labour Code of Ukraine”) (link: https://zakon.rada.gov.ua/laws/show/322-08 ), which states that the agreement of the parties is the basis for terminating the employment contract.

An agreement is an agreement between its parties about something, therefore, an agreement between the parties on termination of an employment contract involves the agreement of the will of both the employee and the employer to terminate the employment relationship, as well as its conditions, in particular, the time from which the employment contract will be terminated.

The legislator does not in any way limit the “reign of will” of the parties when determining the terms of such an agreement, it can be concluded, in particular:

  • at any time, in particular, during “sick leave”, vacation, business trip, etc., less than two weeks before dismissal, etc.;
  • regardless of whether the employment contract is fixed-term or open-ended;
  • regardless of whether the concluded employment contract is a contract;
  • regardless of whether the employment contract was concluded in the form of a single document or a combination of them, or whether the employee was hired without signing them (upon application, etc.).

The legislator does not provide for the obligation to conclude such an agreement in writing or in any other specific form.

APPLICATION FOR DISMISSAL BY CONSENT OF THE PARTIES

Taking into account the latter, the formal agreement can take place both by signing a separate document on termination of the employment contract by the employee and the employer, or by exchanging letters, statements, etc., and even verbally.

Moreover, in some cases, the agreement may take place by the employee or the employer taking conclusive actions in response to the other party’s proposal to terminate the employment contract, including by allowing the so-called “tacit consent” to the proposal.

This is noted, in particular, in the resolutions of the Supreme Court dated October 17, 2018 in case No. 222/438/17-ts (link: http://reyestr.court.gov.ua/Review/77607457 ) and dated June 20, 2019 in case No. 264/2678/17 (link: http://www.reyestr.court.gov.ua/Review/82635922 )

Despite the fact that the dismissal agreement can be concluded in any way and form, we recommend drawing up the relevant documents and draw your attention to the fact that it is worth clearly specifying in them the essential details of the agreement, in particular, the term of termination of the employment contract, the agreement of the parties as a reason for termination of employment relations, etc.

Thus, in particular, the decision of the Supreme Court dated December 1, 2021 in case No. 591/1375/19 (link: https://reyestr.court.gov.ua/Review/101829790 ) states that the absence of a specific date of dismissal in the application indicates on the absence of the employee’s will to terminate the employment contract by mutual agreement of the parties.

We immediately draw attention to the fact that the agreement on the termination of the employment contract must exist at the time of the issuance of the dismissal order, as well as the fact that before the issuance of such an order, the employee can “cancel”, withdraw the previously given consent by stating this by contacting the employer with by a corresponding statement or in another way.

This is supported by the judicial practice of higher courts, in particular by the decision of the Supreme Court dated March 27, 2019 in case No. 524/3490/17-ts (link: http://reyestr.court.gov.ua/Review/80805727 ) where it is stated that when considering disputes regarding an appeal against an order to terminate an employment contract by agreement of the parties, the courts must find out:

  • whether there really was an agreement between the parties to terminate the employment contract by mutual consent;
  • whether the employee expressed his will to terminate the employment contract at the time of issuing the dismissal order;
  • whether the employee declared the annulment of the previous agreement of the parties to terminate the contract by agreement of the parties.

DISMISSAL BY AGREEMENT OF THE PARTIES AND GROUNDS FOR TERMINATING THE EMPLOYMENT CONTRACT

The agreement of the parties on termination of the employment contract should be distinguished from other grounds for dismissal provided for by the Labor Code of Ukraine, as they may have independent, distinct grounds and conditions, as well as distinct legal consequences.

In particular, the Supreme Court draws attention to the above in the resolution of March 20, 2019 in case No. 487/5015/16-ts (link: http://reyestr.court.gov.ua/Review/80783165 ).

In the aforementioned decision, the Supreme Court writes, in particular, that the employer’s agreement to satisfy the employee’s request for dismissal does not mean that the employment contract can be terminated on the basis of paragraph 1 of the first part of Article 36 of the Labor Code of Ukraine, if the parties have not reached an agreement on the termination of the employment contract on this very basis (by agreement of the parties).

So, if we talk about dismissal at the employee’s own will, then its grounds and conditions compared to dismissal by agreement of the parties are limited, specific and clearly defined in Article 38 of the Labor Code of Ukraine (in the case of an open-ended employment contract) and Article 39 of the Labor Code of Ukraine (in the event when the employment contract is fixed-term).

As for the legal consequences of dismissal at the employee’s own will compared to dismissal by agreement of the parties, such are, in particular, the possibility of a person to receive unemployment benefits starting only 91 days from the moment of registration at the employment center.

In the case of dismissal by agreement of the parties, a person can receive unemployment benefits from the 8th day of registration at the employment center.

The latter is defined by Part 3 of Article 22 and Part 4 of Article 23 of the Law of Ukraine “On Mandatory State Social Insurance in Case of Unemployment” (link: https://zakon.rada.gov.ua/laws/show/1533-14 )

In the case of dismissal by agreement of the parties, the employer is, in particular, obliged to pay the employee all amounts due to him on the day of dismissal:

  • salary, taking into account all its components;
  • monetary compensation for all unused days of annual leave (as well as additional leave in cases specified by law);

If the employee did not work on the day of dismissal, payment is made no later than the next day after the dismissed employee submits a claim for settlement.

At the same time, we also note that in case of dismissal by agreement of the parties, the payment of severance pay is not provided.

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