A serviceman won over 140 thousand UAH in court for delayed settlement upon dismissal
The Third Administrative Court of Appeal confirmed that a military unit that did not complete the full settlement with a serviceman on the day of his dismissal is not exempt from liability even if the due payments were determined by a court decision. The employer's obligation ends only after the actual final settlement is made.
At the same time, the panel of judges changed the first instance court's decision regarding the amount of compensation. The appellate court applied the legal position of the Grand Chamber of the Supreme Court, according to which, when determining the average earnings for the period of delayed settlement upon dismissal, it is necessary to assess the proportionality of the compensation taking into account the specific circumstances of the case. For these reasons, the amount of compensation was set at 140,005.64 UAH.
Circumstances of the case
The plaintiff served in the military unit from April 20, 2021, to June 12, 2024. He was retired due to health reasons following the establishment of a disability.
After dismissal, the serviceman challenged the procedure for calculating his monetary allowance. In a previous case, the court found that the military unit had unlawfully calculated certain components of the monetary allowance using the subsistence minimum set as of January 1, 2018, whereas it should have used the subsistence minimum established by the laws on the State Budget of Ukraine for the respective years.
By the decision of the Zaporizhzhia District Administrative Court, the military unit was obliged to recalculate and pay the monetary allowance for the period from April 20, 2021, to May 19, 2023. Following this decision, an amount of 148,828.37 UAH was accrued for payment, but the case materials did not contain evidence of the actual payment of this amount.
After that, the serviceman filed a new lawsuit. He requested to recover the average earnings for the period of delay in the final settlement upon dismissal and to oblige the military unit to calculate and pay compensation for the loss of part of his income due to the violation of payment deadlines for the monetary allowance.
Position of the appellate court
The panel of judges noted that according to Articles 116 and 117 of the Labor Code, the employer is obliged to make a full settlement with the employee on the day of dismissal.
The court emphasized that even if the amounts due upon dismissal are determined by a court decision, this does not exempt the employer from liability for untimely final settlement. The employer's obligation ends only after the actual payment of all due amounts, and a court decision itself does not mean fulfillment of this obligation. This approach corresponds to the established practice of the Supreme Court.
The appellate court also referred to the legal position of the Grand Chamber of the Supreme Court set out in the ruling dated October 8, 2025. According to it, after amendments to Article 117 of the Labor Code, limiting the employer's liability to six months does not automatically mean recovery of average earnings for this period. The court must assess the proportionality of the compensation, considering the amount of debt, duration of delay, behavior of the parties, and other circumstances to ensure a fair balance of interests. The application of this approach was the basis for changing the first instance court's decision.
Why the court reduced the compensation amount
The panel of judges established that upon dismissal, the serviceman was paid 9,907.14 UAH, while the military unit accrued an additional 148,828.37 UAH following the previous court decision. Thus, the total amount due to the plaintiff was 158,735.51 UAH, and the unpaid portion was 93.7%.
The average earnings for the maximum possible six-month delay period were calculated at 149,419.04 UAH. However, applying the principles of reasonableness, fairness, and proportionality, the court in case 280/4194/25 determined that the appropriate amount of compensation is 140,005.64 UAH.
Compensation for loss of part of income
The appellate court agreed with the first instance court's conclusion that the military unit is obliged to calculate and pay the plaintiff compensation for the loss of part of income in accordance with the Law of Ukraine "On Compensation to Citizens for Loss of Part of Income Due to Violation of Payment Deadlines."
The court noted that the right to such compensation arises regardless of whether the respective monetary allowance was accrued voluntarily or pursuant to a court decision. The decisive factor is the fact of violation of payment deadlines. Moreover, the compensation must be accrued and paid simultaneously with the debt repayment, and failure to do so constitutes unlawful inaction by the employer.
What the court decided
The Third Administrative Court of Appeal partially satisfied the military unit's appeal.
The court changed the first instance decision only regarding the amount of average earnings for the delay in settlement upon dismissal and ordered the military unit to recover from the military unit in favor of the former serviceman 140,005.64 UAH for the period from June 13 to December 13, 2024.
The rest of the decision remains unchanged. In particular, the appellate court confirmed the military unit's obligation to calculate and pay compensation for the loss of part of income due to violation of payment deadlines for the monetary allowance.
Subscribe to our Telegram channel t.me/sudua and to Google News SUD.UA, as well as to our VIBER and WhatsApp, our pages on Facebook and Instagram to stay updated on the most important events.
