The Supreme Court Recognises Illegal Dismissal of Manager Who Fictitiously Employed a Worker: Dismissal Without Specifying the Offence Is Illegal
On 10 July 2026, the Supreme Court's Third Judicial Chamber of the Cassation Civil Court, in case No. 536/1109/19, deliberated on the legality of dismissing an enterprise's chief engineer for a single gross violation of employment duties. The Court clarified the necessary content of a dismissal order and reaffirmed the importance of adhering to deadlines for disciplinary sanctions.
Case Background
The plaintiff, the chief engineer of an enterprise, was dismissed following an internal investigation. The investigation concluded that one employee was fictitiously employed, reportedly not performing work duties but receiving over UAH 115,000 in salary.
Responsibility for this fictitious employment was attributed to the
chief engineer, who was subsequently dismissed for a single gross violation of employment duties, pursuant to paragraph 1 of part one of Article 41 of the Labour Code of Ukraine.
The plaintiff challenged the dismissal order, arguing that it failed to specify the exact violation committed and that the disciplinary sanction was imposed after the statutory deadline had expired.
Both the trial and appellate courts sided with the plaintiff, reinstating him and awarding average earnings for the period of forced absence.
The employer lodged a cassation appeal, but the Supreme Court upheld the lower courts' decisions.
Supreme Court's Stance
The Supreme Court underscored that a key aspect of applying paragraph 1 of part one of Article 41 of the Labour Code of Ukraine is that the dismissal must be for a single, distinct violation.
Both the decision from the enterprise owner's competent body and the dismissal order must clearly articulate the single violation that formed the basis for dismissal. The dismissal order should not refer to a range or system of violations but specifically state a single gross violation of particular employment duties.
The Court noted that when considering reinstatements for labour discipline violations, courts must ascertain the precise nature of the violation leading to dismissal and whether it constitutes grounds for contract termination under paragraph 1 of part one of Article 41 of the Labour Code of Ukraine.
Courts must also verify that the employer adhered to the rules and procedures for applying disciplinary sanctions, as outlined in Articles 147-1, 148, and 149 of the Labour Code of Ukraine. This includes confirming that the prescribed deadline has not passed and that a disciplinary sanction has not already been imposed for the same offence.
Additionally, it is crucial to establish whether, at the time of dismissal, due consideration was given to the severity of the offence, the damage caused, the circumstances surrounding its commission, and the employee's prior work record.
The Supreme Court emphasised that dismissal under paragraph 1 of part one of Article 41 of the Labour Code of Ukraine is disciplinary in nature and must therefore comply with the procedures and deadlines specified in Articles 148 and 149 of the Labour Code of Ukraine.
The Court stated that an employer may decide to dismiss an employee under paragraph 1 of part one of Article 41 of the Labour Code of Ukraine if the following conditions are met:
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The employee belongs to a category subject to disciplinary responsibility.
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A factual violation of employment duties by the employee is established.
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The violation is single and gross.
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The decision to dismiss is made by an authorised person.
In reviewing the specific case, the Supreme Court observed that the plaintiff's dismissal order did not explain the nature of the violation, and the case materials did not substantiate a single gross violation of employment duties, a breach of the chief engineer's job description, or other internal enterprise regulations.
The Supreme Court reiterated that the dismissal order must clearly state the single violation that served as the basis for termination.
Separately, the Court concurred with the finding that the employer failed to meet the deadline for applying the disciplinary sanction. It noted that the employee's hiring, deemed fictitious by the employer, occurred on 19 June 2017, while the disciplinary sanction of dismissal was not applied to the manager until 26 June 2019.
The Supreme Court rejected the defendant's argument that the plaintiff's violation was ongoing, thus preventing the expiration of the disciplinary liability deadline. The Court stated that such arguments amount to an interpretation of Article 148 of the Labour Code of Ukraine in favour of the claimant, and no circumstances indicating the expiration of the deadline provided in part two of this article were established in the case.
The Supreme Court also highlighted that, given the requirements of labour legislation in cases challenging the legality of dismissal, the defendant bears the burden of proving that the dismissal was carried out in compliance with labour law.
Consequently, the Supreme Court dismissed the enterprise's cassation appeal, leaving the lower courts' decisions unchanged.
The Court affirmed that dismissal under paragraph 1 of part one of Article 41 of the Labour Code of Ukraine is permissible only when there is a clearly defined single gross violation of employment duties, which must be specified in the dismissal order.
Read also: Employer cannot issue a reprimand if employee's guilt is not proven — Supreme Court.
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