An official whose employment contract is terminated by the employer due to the termination of their powers is entitled to severance pay amounting to at least six months’ average earnings. The Supreme Court noted that the law does not specify a minimum length of service for this guarantee. However, in a specific dispute concerning 1.2 million UAH, the court did not award the funds but referred the case for a fresh appeal hearing.
Briefly about the main points
- The payment is intended for senior officials, not for all employees.
- Reason for dismissal — termination of employment at the employer’s initiative.
- The law does not require a minimum length of service in the post as a condition.
- Redundancy pay is a separate employment guarantee, not a salary.
- The Court of Appeal will hear the case concerning 1.2 million hryvnias again.
What are the conditions for the payment of severance pay to a public official?
Paragraph 5 of Part 1 of Article 41 of the Labour Code allows an employer to terminate an employment contract in the event of the termination of an official’s powers. In such cases, Article 44 of the Labour Code provides for a special guarantee — severance pay amounting to no less than six months’ average earnings.
The entitlement to this arises not merely from the status of a manager or other official. It is important that an employment relationship exists between the parties, and that the contract was terminated specifically on the grounds of the termination of powers at the employer’s initiative.
The Civil Cassation Division of the Supreme Court emphasised that the law does not specify how long a person must have served in a post before being dismissed. Consequently, the mere fact that the period of service was short does not deprive an official of the right to claim such a payment.
The length of service does not determine entitlement to the guarantee
The court has distinguished between severance pay and wages. Severance pay is not remuneration for work already performed, but a separate employment guarantee provided for in cases of termination of an employment contract as specified by law, and is intended to provide financial support to the employee following dismissal.
Therefore, in such disputes, the courts must first of all establish the facts of the case: whether the person was appointed to the post, whether they commenced their duties, whether an employment relationship existed, and when it ceased. Only then can it be determined whether the protection under Article 44 of the Labour Code applies.
Why the case concerning the payment of 1.2 million hryvnia is to be re-examined
The Supreme Court’s ruling was handed down in a case involving the former chair of the company’s board, who was claiming 1.2 million UAH in severance pay. Her contract was classified as a fixed-term employment contract, and her monthly salary was 200,000 UAH. The claimant considered that the employment relationship continued until 1 February 2024.
The Sosnivskyi District Court of Cherkasy and the Cherkasy Court of Appeal dismissed the claim, finding that the existence of an employment relationship during the period after 27 September 2023 had not been proven. The Civil Chamber of the Supreme Court noted that the appeal had failed to establish these circumstances properly and had not assessed part of the evidence, in particular the OK-7 certificate regarding the calculation of salary and the supervisory board’s subsequent decision to terminate the individual’s powers.
The Court of Cassation did not order the recovery of the claimed sums, as it cannot independently establish facts that were not ascertained by the lower courts. The ruling of the Cherkasy Court of Appeal dated 12 November 2025 has been set aside, and case No. 712/4637/25 has been referred back for a fresh appeal hearing. The court of appeal must determine whether an employment relationship existed and when it ceased — the decision on payment will depend on this.
