🇺🇦🇷🇺Ukraine vs Russia

Long Overdue Labor Reform

Ukraine is undertaking one of the largest domestic reforms since independence. Implementing wise labor reform properly will facilitate the country’s postwar recovery.

Kyiv Post

75

6 Nisan 2026

4 min read

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Ukraine’s current labor code was adopted in 1971, when Leonid Brezhnev ruled in Moscow and Ukraine had no true sovereignty over its own domestic policy.

Most Ukrainian governments since independence have recognized the need for a new code, and all of those who attempted to initiate the reform ultimately yielded in the face of the political challenge. Instead, piecemeal amendments have resulted in a fragmented framework.

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The draft labor code, now approved by the Cabinet of Ministers and submitted to the Verkhovna Rada, is the most wide-ranging attempt at labor reform in decades.

Ukraine’s ongoing journey towards EU membership provides part of the rationale for the draft. The draft code includes provisions on workplace safety, equality and conditions that correspond to elements of the EU acquis, seeking to bring Ukraine closer to meeting accession requirements. However, full implementation of the more recent EU measures on pay transparency, platform work and adequate minimum wage directives will require complementary or secondary legislation.

Beyond EU accession requirements, the government has indicated this reform will lay foundations for Ukraine’s postwar recovery.

The potential benefits are large. New analysis from the Tony Blair Institute for Global Change suggests that the reform could increase formal employment by 300,000, generating over Hr.40 billion ($900 million) per year in tax revenue.

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Whether Ukraine can realize these gains will be subject to effective implementation.

For instance, the draft seeks to tackle informal employment which is widespread in Ukraine and offers an unfair advantage to employers who flout the rules. The proposed risk-based inspection model is designed to incentivize formal employment by increasing detection risks for non-compliance while reducing pressure on compliant firms. But this model will only succeed if it is implemented by a well-resourced labor inspectorate.

Similarly, the extension of parental leave to fathers and strengthening of gender equality legislation have the potential to support labor market attachment for women. But changing the law is not enough. Historically, such policy changes are successful when reinforced by adequate enforcement and a communications campaign that makes citizens aware of their new rights.

A new student contract provides the basis for employment that includes a training component. For employers, such contracts may offer legal certainty. For young people, they may provide access to social protection and recognized experience. While this has the potential to formalize work that already occurs informally, robust safeguards are needed to ensure that such contracting arrangements are not misused.