09:24, 19 October 2026
The employee was effectively removed from work under the pretext of the war, while colleagues worked from home, and was later dismissed without an offer of another position.
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In Kharkiv, an employee of Derzhmolodzhytlo had his employment contract suspended due to the war, while his colleagues were transferred to remote work. Later, the man, who had worked at the institution for over 15 years, was dismissed due to staff reduction without being offered any vacant position. The employee went to court but initially lost the case. The appellate court sided with him: it recognized both the suspension of the employment contract and the dismissal as illegal, ordered his reinstatement, and awarded him nearly 130 thousand hryvnias.
The relevant decision in case No. 646/1328/23 was made by the Kharkiv Court of Appeal.
How the employee was left without a job
The man had worked since November 2007 as an economist in the consulting and credit department of the Kharkiv regional office of the State Fund for Youth Housing Assistance (Derzhmolodzhytlo).
After the full-scale invasion began, the institution’s management announced a downtime on February 28, 2022. On March 30, an order was issued suspending the employment contract with the economist from April 1 until the end of martial law.
The reason cited was the military aggression against Ukraine, which, according to the employer, made it impossible to provide work to the employee and for him to perform it.
However, the next day, March 31, management issued another order — for the rest of the institution’s employees, remote work was introduced from April 1.
The economist claimed he could also work remotely. According to him, the institution’s premises were not damaged by shelling, and remote work had been implemented during quarantine. Moreover, in March 2022, he applied to management with a request to transfer to remote work.
Nevertheless, his employment contract remained suspended.
In autumn 2022, a reorganization of the regional offices of Derzhmolodzhytlo began by merging them into the central institution. This entailed staff reductions and the creation of new regional departments.
On January 31, 2023, the man was dismissed from his economist position under paragraph 1 of part one of article 40 of the Labor Code of Ukraine — due to staff reduction.
The man claimed the employer did not consider his over 15 years of service, education, and qualifications and did not offer him other work.
What the man demanded in court
In April 2023, the former employee filed a lawsuit against Derzhmolodzhytlo, which became the legal successor of the Kharkiv regional office.
He requested to recognize the order suspending the employment contract and the subsequent dismissal as illegal, to reinstate him as an economist, to recover average earnings for the forced downtime, wage arrears, and compensation for unused vacation.
Additionally, the man demanded 75 thousand hryvnias for moral damages and to oblige the defendant to transfer insurance contributions to the Pension Fund of Ukraine.
The total amount of claimed monetary demands was 225,871.49 UAH.
The Osnovyansky District Court of Kharkiv fully denied the claim, concluding that the man did not prove a violation of his rights.
Disagreeing with this decision, the employee filed an appeal.
Why the court recognized the suspension of the employment contract as illegal
The Kharkiv Court of Appeal first checked whether the employer had legal grounds to suspend the employment contract.
The court referred to Article 13 of the Law of Ukraine “On the Organization of Labor Relations under Martial Law,” which allows suspending the employment contract due to military aggression against Ukraine.
However, this possibility is not unconditional.
The court emphasized that for lawful suspension of the employment contract, two conditions must simultaneously exist:
- the employer objectively cannot provide work to the employee due to military aggression;
- the employee cannot perform his duties due to the same circumstances.
The mere fact of martial law introduction is insufficient to leave the employee without the possibility to work.
Specifically, it is necessary to establish whether it is truly impossible to provide work, including remotely, or to offer another way to perform labor duties.
In this case, the appellate court found that the Kharkiv regional office of Derzhmolodzhytlo did not cease its activities after the full-scale invasion began.
Moreover, the employment contract was suspended selectively — only with the plaintiff. Meanwhile, other employees of the institution continued working remotely from the same date.
The employer did not prove that the economist could not perform his duties. Also, there was no evidence in the case materials that the man was offered other work or another way to perform his labor functions.
The appellate court concluded that absolute impossibility of providing and performing work, which is a necessary condition for suspending the employment contract, was not proven.
Therefore, the order dated March 30, 2022, suspending the employment contract was recognized as illegal and invalid.
Why dismissal due to staff reduction was also illegal
The court separately examined the dismissal procedure.
The case materials showed that on November 30, 2022, the employer informed the economist about the reduction of his position effective January 31, 2023.
The notification was sent by email. The man disputed the validity of this notification method, but the court found that he had previously indicated the relevant email address in his applications and requested copies of orders be sent there.
Thus, the court recognized that the employee was warned about the planned dismissal.
However, during the examination of other circumstances, a significant violation was found.
At the time of dismissal, there were vacant positions in the institution, including a credit services manager. Despite this, the employer did not offer the economist any vacancies. The defendant himself did not deny this.
The appellate court recalled that according to Articles 40 and 49-2 of the Labor Code of Ukraine, dismissal due to staff reduction is allowed if it is impossible to transfer the employee to another job with his consent.
The employer is obliged to offer the employee all available vacancies that he can occupy considering his education, qualifications, and experience.
This obligation applies not only on the day of notification about the reduction but throughout the entire period until dismissal, including vacancies that appeared after the notification and existed on the dismissal day.
At the same time, the court emphasized that the decision on the advisability of staff reduction belongs to the employer’s authority. The court does not decide how many employees the institution needs but checks whether there were legal grounds for dismissal and whether the established procedure was followed.
Since Derzhmolodzhytlo did not offer the man available vacancies, the appellate court concluded that the employer did not fulfill his obligation regarding possible employment of the employee.
This was the basis for recognizing the dismissal illegal and reinstating the man to his previous position.
Why the court awarded over 124 thousand hryvnias of average earnings
Considering the monetary claims, the appellate court distinguished the consequences of lawful and unlawful suspension of the employment contract.
The court referred, in particular, to the legal position of the United Chamber of the Cassation Civil Court of the Supreme Court, set out in the ruling dated May 5, 2025, in case No. 758/4178/22.
According to this conclusion, if the suspension of the employment contract is justified, compensation of wages, guarantees, and compensations is the responsibility of the state that carries out armed aggression against Ukraine.
If illegal actions of the employer deprived the employee of the opportunity to work, the obligation to compensate average earnings for the forced downtime lies with the employer.
In this case, the appellate court established the illegality of both the suspension of the employment contract and the dismissal.
For calculating average earnings, Order No. 100 on calculating average wages was applied.
The economist’s monthly salary was 10,740 UAH. Since the man did not work in previous months due to the suspension of the employment contract, the court calculated the average earnings based on the salary.
The average daily earnings were determined at 477.33 UAH.
For the period from April 1, 2022, to March 31, 2023, covering 261 working days, the court awarded 124,583.13 UAH of average earnings for the forced downtime.
The amount was determined without withholding taxes and other mandatory payments.
What the court decided regarding moral damages and other claims
The man also demanded 75 thousand hryvnias in moral damages. He explained that due to the employer’s actions, he lost the opportunity to earn income, had to limit his needs, and spent time and effort defending his labor rights.
The appellate court found violations of labor legislation and took into account the nature of the plaintiff’s suffering, forced changes in his life, and efforts spent on legal protection.
At the same time, the court awarded moral damages in the amount of 5,000 UAH.
Other claims of the man were denied.
In particular, the court refused to recover wage arrears for the period from March 10 to March 31, 2022.
The case materials included an order extending the man’s annual leave by 22 calendar days due to temporary incapacity. However, no evidence was provided to the court that he actually performed labor duties during that period.
The court also found no grounds for compensation for unused vacation, as the employer’s orders confirmed the use of the respective vacation days.
Some claims regarding the recalculation of mandatory payments were also denied.
What the appellate court finally ruled
The Kharkiv Court of Appeal reversed the decision of the Osnovyansky District Court of Kharkiv and made a new decision partially satisfying the claim.
- To recognize the order dated March 30, 2022, suspending the employment contract from April 1, 2022, as illegal and invalid.
- To recognize the dismissal of the economist from January 31, 2023, due to staff reduction as illegal.
- To reinstate the employee to his previous position from January 31, 2023.
- To recover from Derzhmolodzhytlo 124,583.13 UAH of average earnings for the forced downtime.
- To recover 5,000 UAH in moral damages.
In total, 129,583.13 UAH was awarded in favor of the employee.
Other parts of the claim were denied.
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