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Scheduled inspections by state labor authorities

As you may know, the moratorium on inspections by state agencies does not apply to the State Service of Ukraine on Labor  (further “ Derzhpratsi”) as provided in Cabinet of Ministers of Ukraine Decree No. 1104 dated December 18, 2017. The Inspections by Derzhpratsi   bodies became a hot topic on the back of a significant increase in existing fine amounts, the introduction of new fines for violation of labor law and the constant updating of health and safety regulations. We would therefore like to discuss here several aspects related to the inspections of business entities by Derzhpratsi bodies.    

First, inspections by Derzhpratsi bodies do not need to be included in a comprehensive inspection plan because business entities are included in such plan only if several state authorities have included them at the same in their comprehensive inspection plans to check the same base period (Articles 4 and 5 Law of Ukraine No. 877-V On Basic Principles for State Monitoring of Business Activity dated April 05, 2007 (further “Law No. 877”)). 

It should be noted that if a business entity is included in a comprehensive inspection plan, such business entity will be entitled to send a written application to the State Regulatory Service of Ukraine, and as a result, state inspections will be conducted according to individual annual plans.

Second, an exhaustive list of questions for scheduled inspections of industrial safety, health and safety and mining is provided in Section IV of Standard Form for  Business Entity (Production Facility) Inspection Certificate approved by The State Emergency Service of Ukraine Order No. 826 dated August 11, 2011.  Any business entity included in Derzhpratsi’s  inspection plan will be inspected solely within the confines of the relevant list. 

Third, business entities under inspection are entitled not to allow state inspection agents to conduct their inspection in cases provided in Article 10 of Law No. 877.

Fourth, it is necessary to closely monitor inspectors during any inspection to ensure that their actions comply with the conferred to them under Article 8 of Law No. 877. In particular, business entities are entitled to request in writing to stop an inspection if:

  • The authorized inspector takes longer to conduct the inspection than the maximum period set for that inspection;
  • The state inspector uses a non-standard form for the inspection certificate;
  • The inspectors find during an unscheduled inspection issues other than those that served as grounds for the inspection.

In addition, Cabinet of Ministers of Ukraine Decree No. 342 dated May 10, 2018 approving new methods to work out criteria to assess the risk associated with the performance of business activity and determine the frequency of scheduled inspections and approving the standard forms for inspections certificates issued after scheduled (unscheduled) inspections entered into force on June 12, 2018, but Cabinet of Ministers of Ukraine Decree No. 464 dated June 06, 2018 providing that the above methods are not to be applied until September 01, 2018 was published on the website of the Government recently. 

Fifth, Law No. 877 provides for the presumption of lawfulness of activity performed by business entities. This means that any contradictions and ambiguities found in laws should be interpreted in favor of business entities.

Finally, it is important to remember that the Labor Code of Ukraine and the Code of Administrative Offenses of Ukraine provide for the liability of legal entities and of self-employed individuals for not permitting and obstructing labor inspections with no lawful grounds.

Our consultants, accountants and lawyers have gained extensive experience assisting clients with inspections by various state authorities so feel free to get in touch to find out more about this matter if necessary.

If you have any questions or require further information, please feel free to contact us. We are always happy to share our experience and recommendations.