Top Manager of a Defence Enterprise Issued Tax Invoices While on Sick Leave: The Supreme Court Upheld His Dismissal

The Supreme Court has upheld the legality of dismissing an employee from a state enterprise under the Ministry of Defence of Ukraine for systematic breaches of labour discipline. The Court clarified that an employer's failure to obtain written explanations before implementing disciplinary action does not, in itself, constitute grounds for reinstatement if the disciplinary offence is proven.

This conclusion was reached by the panel of judges of the First Judicial Chamber of the Cassation Civil Court in its ruling dated 20 May 2026, in case No. 761/41818/21.

According to the case materials, the plaintiff sought to annul the disciplinary action and dismissal orders, be reinstated, recover average earnings for the period of forced absence, and receive UAH 100,000 in moral damages. He contended that his dismissal, under paragraph 3 of part one of article 40 of the Labour Code of Ukraine, was unlawful because he did not hold the position from which he was dismissed, was not familiar with his job duties, the employer failed to prove the systematic nature of the violations, and did not obtain his written explanations prior to dismissal.

Conversely, the employer cited the findings of official inspections and an audit report. Specifically, it highlighted detected violations in accounting and tax records which, according to the commission's conclusions, resulted in the enterprise incurring a VAT debt of UAH 133,913.57. Additionally, the employer noted that while on sick leave, the employee unlawfully interfered with accounting and tax records via the ME.DOC program. These circumstances formed the basis for the disciplinary action leading to dismissal.

The Shevchenkivskyi District Court of Kyiv dismissed the claim, a decision upheld by the Kyiv Court of Appeal.

The court decisions were based on the plaintiff's failure to provide evidence confirming the unlawfulness of the employer's actions, both in issuing a reprimand and in dismissing him under paragraph 3 of part one of article 40 of the Labour Code of Ukraine. Circumstances indicating the employer's failure to follow dismissal procedures were not proven. The employer, conversely, successfully demonstrated the legality of the plaintiff's dismissal.

What the Supreme Court Decided

The Supreme Court reiterated that, in accordance with Article 139 of the Labour Code of Ukraine, employees are obliged to work honestly and conscientiously, promptly comply with their employer's orders, observe labour discipline, and treat the enterprise's property carefully.

The court noted that breaches of labour discipline may result in disciplinary sanctions against an employee, including a reprimand or dismissal. Before imposing such sanctions, the employer must request a written explanation from the employee and, when determining the type of sanction, consider the severity of the offence, the damage caused, the circumstances of its commission, and the employee's prior work record.

Furthermore, the Supreme Court emphasised that, according to paragraph 3 of part one of Article 40 of the Labour Code of Ukraine, an employment contract may be terminated in cases where an employee systematically fails, without valid reasons, to fulfil duties assigned by the employment contract or internal labour regulations, provided that disciplinary or public sanctions have already been applied to them.

The court stressed that dismissal on these grounds is only permissible for a new disciplinary offence committed after a previous disciplinary sanction has been applied, provided that sanction has not lost legal force and was not lifted early.

The Supreme Court concurred with the conclusions of the lower courts that the employer proved the legality of the employee's dismissal under paragraph 3 of part one of Article 40 of the Labour Code of Ukraine. The court reiterated that dismissal on these grounds is only possible if a set of conditions is met: the employee must systematically violate labour duties without valid reasons after disciplinary sanctions have been applied, and the employer must prove the occurrence of a new disciplinary offence.

The Supreme Court noted that, prior to dismissal, the plaintiff had already received a reprimand by order dated 20 September 2021. Subsequently, the employer recorded a new breach of labour discipline, which formed the basis for applying disciplinary action in the form of dismissal.

The court also rejected the plaintiff's arguments that he was dismissed from a position he did not hold. The panel of judges indicated that the case materials confirmed his appointment as deputy director by order dated 12 February 2021, which he acknowledged by signature. Moreover, the plaintiff had previously temporarily performed the duties of the director of this enterprise, and was therefore familiar with its founding documents, internal labour regulations, and job duties.

Separately, the Supreme Court agreed that the employer did not obtain written explanations from the employee before dismissal, as required by Article 149 of the Labour Code of Ukraine. At the same time, the panel emphasised that this violation alone is not an unconditional basis for reinstatement if the employer proved the fact of the employee's disciplinary offence and the lawfulness of the dismissal.

In view of this, the Supreme Court left the cassation appeal unsatisfied, and the decisions of the Shevchenkivskyi District Court of Kyiv and the Kyiv Court of Appeal unchanged.

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