The relationship between employers and employees in Ukraine, in the public and private sectors, works badly for both sides.
From the employers’ viewpoint, labor laws are stacked in favor of employees, an extension of the Soviet mentality of guaranteed lifetime employment. Such rights didn’t really mean much in a state-owned economy governed by a totalitarian regime. The old saying springs to mind: “We pretend to work and they pretend to pay us.” A dynamic, free-market economy requires a competitive workplace, where employers and employees each have codified but reasonable rights. The employer wants to hire the best, fire the worst and set pay and working conditions. The employee wants the right to compete for the best job and best pay, to have legal protections that govern work hours, prevent discrimination and, ideally, provide for pension and other benefits. But this is not how it works in Ukraine. The 1971 labor code still in effect (with modest changes) is loaded with such unreasonable protections that, combined with confiscatory taxes, employers bypass hiring employees officially altogether, leaving them without any legal rights and rendering labor unions practically useless. In the public sector, anticipation is high over how a new civil service code will work starting in May. Currently, from the employees’ side, wages are low and rules stifle creativity. From the employers’ side, it’s impossible to provide efficient government service when laws make it so difficult to fire anyone and budgets are so tiny. A case in point is Ukrzaliznytsia, the state railway monopoly. It is overstaffed by as many as 100,000 employees, in a case of grand featherbedding. But they keep their jobs because nobody wants the social unrest or strike that could come from firing so many people at once.
Clearly, a better balance of rights is needed between employers and employees.