July 15, 2019

July 15, 2019

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July 12, 2019

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Ukraine: Crisis Management Guidance for Multinational Employers

In light of the current violence and severe unrest in the Eastern Ukraine region (see summary box below), multinational companies with Ukraine operations are considering a range of emergency measures to protect their staff, depending on the nature of the business and the type of work being carried out by employees.

We’ve summarised the most common emergency measures that are currently being taken by employers in Ukraine at section 1 below.  Section 2 sets out general guidance that employers may consider when putting in place a crisis management plan in Ukraine, or any other region where an emergency or conflict situation arises.

1.  Main emergency measures currently being taken by multinational companies with Ukraine operations.

  • Evacuating expatriate staff from Eastern Ukraine (Donetsk, Lugansk and Kharkiv oblasts).
  • Allowing staff in areas affected by violence to work remotely - either from home, or another safe  working environment.   Given the nature of the situation, employers havegenerally agreed this measure with staff by telephone or email (written employment contracts are not mandatory  in   Ukraine).     Depending  on  the  duration  of  the  crisis, remote  working arrangements may subsequently be formalised in writing.
  • Seeking the agreement of  staff in areas affected by violence to take unpaid leave until their work environment is secure.  Some employers are requiring employees to use theirexisting vacation allowance for this purpose.
  • Introducing  compulsory  ‘downtime’  for  the  period  of  the  crisis  by  temporarily  ceasing business activity. Employers must continue to pay employees at least part of theirnormal salary during the downtime, e.g. twothirds of usual salary, or the employees’ average salary, depending on the severity of the situation giving rise to the implementation of downtime.

Since it is currently very difficult to predict fluctuations in value of the local Ukraine currency (hryvnia), employers who pay staff in hryvnia are fixing salaries at set US dollar orEuro rates to protect employees against the effects of a devalued currency.

The Code of Civil Protection regulates protection of employees during emergencies. The Code obliges employers to take certain measures to protect and safeguard employees, including implementing a written ‘civil protection plan’ which must be agreed with the local emergency services.  Items covered by the plan include putting in place evacuationand sheltering procedures, fire safety instructions, protections from chemical weapons and radiation, rescue measures and   medical support   during   accidents. Non-compliance   carries   a low administrative fine which can be imposed on a company’s directors.  However, we have made enquiries  with the local authorities and they are not aware of any employers who have currently  complied with this requirement. Although the emergency services are not taking enforcement steps against employers at present, thiscould change if the crisis continues.

2.  General guidance for employers implementing a crisis management plan.

Conduct a compliance audit to identify potential vulnerabilities that could impact the safety and security of employees (as well as assets, leases, licenses, etc.).  In case it isnecessary to wind-up operations in the region at short notice, on either a temporary or permanent basis, the audit should consider applicable repatriation and termination provisions(including length of notice periods) in employment agreements, business premises leases, etc.

Prepare  and  communicate  employee  safety  procedures  and  emergency  protocols   for evacuating  and repatriating  expatriate  employees.    Employee  safety procedures  might include,  among  other  things, ensuring  employees  have  adequate  security  cover  where practical (e.g. a driver, security guard), access to secureaccommodation, etc.

Identify a crisis support team (“CST”), responsible for monitoring developments that  could jeopardise the safety and security of employees located in the affected region.  Designated CST staff should:

  • be available around the clock as emergency points of contacts for employees;
  • ensure employees are provided with regular updates about government travel advisories and any developments that could impact their safety.  Failure to follow governmenttravel advice, e.g. the British Foreign and Commonwealth Office (FCO) guidance, can invalidate insurance cover;
  • maintain complete and current contact information for employees.   This  information should include personal email address and mobile numbers for employees andcontact details of next of kin, so that the CST has multiple contact channels;
  • require employees to provide up-to-date details of their locations and travel plans to the CST.      Employees   should   also   be   encouraged   to   immediately   report   any  local developments to the CST;
  • maintain  citizenship  data  and  details  of  local  embassies,  consulates  and   other government     representatives, in case foreign government assistance with communications to / evacuations of expatriate employees is required;
  • ensure employees retain original passports, visas and other travel documents, as well as copies, since local passport or visa services may be limited or closed in an emergency;
  • monitor airlines’ flight schedules and statuses.

Ensure appropriate insurance cover is in place, including adequate employee travel  and medical insurance and political instability insurance, to ensure that risks are sufficiently mitigated and in compliance with local insurance laws.

© 2019 Covington & Burling LLP

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About this Author

Christopher Walter, Covington, employment lawyer
Partner

Christopher Walter works with employer clients on domestic and international HR-legal compliance and human rights projects. Mr. Walter chairs the firm’s International Employment practice, and serves as Managing Partner of the London office.

Mr. Walter’s advisory practice encompasses the full range of employment and employee benefits issues that matter to leading multinational employers, including the drafting of share and other incentive plans, global mobility, privacy compliance, employment issues in M&A transactions, outsourcing, workforce integration, and...

+44.20.7067.2061
Helena Milner-Smith, Covington, Employment lawyer
Special Counsel

Helena Milner-Smith helps companies navigate complex international HR-legal compliance issues.

Ms. Milner-Smith advises clients across a range of industries on all aspects of UK and international employment law, including the HR aspects of privacy compliance and human rights regulation.

Ms. Milner-Smith has particular expertise advising on the HR-legal aspects of multi-jurisdictional transactions. She also regularly assists clients seeking to protect their business and increase international compliance by designing and implementing global policies, employment contracts and restrictive covenants.

+44.20.7067.2070