Occupation of a city does not release the employer from the obligation to pay wages: the position of the Supreme Court

After the start of the full-scale war, many enterprises in the occupied territories effectively ceased operations without formalizing downtime or suspending employment contracts. This caused numerous disputes regarding wages and settlements upon dismissal.

The Supreme Court’s Commercial Collegium in case No. 334/4889/24 dated May 20, 2026, explained when the employer continues to bear the obligation to pay the employee the due amounts even during the war.

Circumstances of the case

The plaintiff worked as a nurse at the polyclinic of the municipal enterprise "Tokmak Multidisciplinary Intensive Care Hospital" from December 2019 to May 2024.

After the occupation of Tokmak city in Zaporizhzhia Region in February 2022, she left the city due to danger to life and health. The plaintiff stated that the hospital lacked proper working conditions, management did not provide instructions on organizing work under occupation conditions, and the hospital itself was in dangerous conditions.

The employer did not declare downtime and did not suspend the employment contract until December 2023. Only by order dated December 5, 2023, was the employment contract suspended starting December 6, 2023.

In May 2024, the employee was dismissed at her own request. Upon dismissal, the employer paid compensation only for part of the unused vacation and stated in the order that compensation for other periods was not accrued due to "absence of the employee at the workplace without a valid reason."

The plaintiff applied to the court demanding recovery of average wages for the forced downtime period, compensation for unused vacations, material assistance for health improvement, and cancellation of the relevant part of the dismissal order.

The court of first instance partially satisfied the claim. The appellate court agreed that the employer was obliged to pay for work until the suspension of the employment contract but denied part of the claims due to the expiration of the three-month period for filing a lawsuit.

Position of the Supreme Court

The Supreme Court indicated that labor law provisions guarantee the priority of protecting the employee's right to remuneration even under martial law conditions.

Wages are remuneration, usually calculated in monetary terms, which the employer must pay the employee for work performed or to be performed. The employer's obligation to pay wages is not a liability under Article 617 of the Civil Code of Ukraine, from which the employer may be released due to accident or force majeure.

The court emphasized that the employer is released from liability for violation of wage payment deadlines only if it proves that the violation occurred due to hostilities or other force majeure circumstances.

At the same time, release from liability for late wage payment does not exempt the employer from the obligation to pay wages.

The Supreme Court stressed that until the official suspension of the employment contract, the employer continued to bear labor obligations towards the employee.

The court also agreed with the previous courts' conclusions that the employee could not perform work for reasons beyond her control, as the plaintiff left the city due to its occupation and to protect her life and health, and therefore could not fulfill her labor duties for reasons beyond her control.

The Supreme Court separately analyzed the application of Article 233 of the Labor Code of Ukraine regarding the time limits for filing lawsuits.

Non-payment to a dismissed employee of all amounts owed by the owner or authorized body is a continuing violation, therefore, the employee can determine the final scope of claims only at the moment the violation ends, which is the day of actual settlement.

The court emphasized that the three-month period for filing a lawsuit begins only after the full settlement, i.e., in this case, the three-month period starts the day after the payments are made regardless of the length of the payment delay.

The Supreme Court concluded that the appellate court incorrectly applied Article 233 of the Labor Code of Ukraine.

When deciding on the recovery of unpaid wages to the plaintiff for the period from July 19, 2022, to December 5, 2023, the appellate court incorrectly applied the substantive law provisions and prematurely agreed with the local court's conclusion about the plaintiff's missed deadline for filing a lawsuit.

The court additionally drew attention to the special provisions of the Law of Ukraine "On the organization of labor relations under martial law," which state that compensation of wages, guarantees, and compensatory payments to employees during the suspension of the employment contract is fully borne by the state conducting military aggression against Ukraine.

Thus, the Supreme Court partially satisfied the cassation appeal and concluded that the employer is not released from the obligation to pay wages due to occupation or hostilities if the employment contract was not properly suspended, and the three-month period for filing a lawsuit in disputes over unpaid amounts upon dismissal begins only after full settlement with the employee.

This legal position is of significant importance for disputes related to labor relations in temporarily occupied territories and under martial law conditions, especially in cases where employers effectively ceased operations without proper formalization of downtime or suspension of employment contracts.

Additionally, attention should be paid to another legal position of the Supreme Court regarding legal relations in temporarily occupied territories, where the Court concluded that war, occupation, and the impossibility of actual use of property may be grounds for releasing the tenant from paying rent.

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