Is the Employer Always Responsible for Failing to Meet the Employment Quota for Persons with Disabilities: Court Decision

The Zhytomyr District Administrative Court has ruled in administrative case No. 240/20518/25, involving the Zhytomyr Regional Branch of the Social Protection Fund for Persons with Disabilities and an individual entrepreneur. The case concerned the collection of administrative and economic sanctions and penalties for the entrepreneur's failure to meet the mandatory employment quota for persons with disabilities.

The court's review focused on whether there were legal grounds to hold the employer liable under the Law of Ukraine "On the Fundamentals of Social Protection of Persons with Disabilities in Ukraine."

Case Summary

The Zhytomyr Regional Branch of the Social Protection Fund for Persons with Disabilities initiated legal action to recover administrative and economic sanctions of UAH 43,040.14, along with penalties of UAH 2,733.04, from the individual entrepreneur.

The claim stemmed from the employer's alleged failure to fulfil the employment quota for persons with disabilities, as mandated by Article 19 of the Law of Ukraine "On the Fundamentals of Social Protection of Persons with Disabilities in Ukraine." According to the Fund, the defendant's average headcount in 2024 was eight employees. This required the employer to provide employment for one person with a disability, a requirement that was not met.

The Fund automatically identified the quota shortfall and calculated the applicable administrative and economic sanctions. As voluntary payment was not made, the plaintiff proceeded with an administrative court claim.

The defendant did not submit a response to the claim, leading the case to be considered in written proceedings based on the available evidence.

Court's Position and Conclusions

The court noted that Article 18 of Law No. 875-XII obliges employers using hired labour to create workplaces for persons with disabilities, including specialised positions. They must also provide suitable working conditions in line with individual rehabilitation programmes and furnish the State Employment Service with necessary information to facilitate the employment of such individuals.

Article 19 of Law No. 875-XII establishes an employment quota for persons with disabilities. For employers with 8 to 25 employees, the quota is one workplace.

The court highlighted that, following legislative amendments, the Social Protection Fund for Persons with Disabilities no longer conducts inspections of employers regarding compliance with the employment quota. These control powers have been transferred to the State Labour Service of Ukraine and its regional bodies.

Furthermore, the court clarified that information received by the Fund from the Pension Fund of Ukraine regarding the employment of persons with disabilities serves only as a basis for initiating an employer inspection, not as definitive proof of a violation.

The court referenced the legal position of the Supreme Court, outlined in its resolution of 21 November 2022, in case No. 400/3957/21. This position affirms that the State Labour Service and its territorial bodies are authorised to verify compliance with the employment quota for persons with disabilities by businesses. Only after such an inspection, if a quota shortfall is confirmed, does the employer incur the obligation to pay administrative and economic sanctions.

However, the court stressed that legislation not only obliges employers to create a workplace but also to take all legally prescribed measures to fill it, including notifying the State Employment Service of the vacancy.

The court noted that the procedure for submitting information about labour demand is regulated by Order of the Ministry of Economy of Ukraine No. 827-22, dated 12 April 2022. Form No. 3-PN must be submitted by the employer no later than three working days from the date the vacancy arises.

In the court's view, if an employer timely submits Form No. 3-PN, they have fulfilled their legal obligation to inform the State Employment Service about the vacancy. In such instances, the employer is deemed to have taken all reasonable steps to meet the quota, and the absence of actual employment of a person with a disability due to factors beyond the employer's control does not warrant the application of administrative and economic sanctions.

In the current case, however, the court found no evidence that the defendant submitted information to the employment centre using Form No. 3-PN in 2024 or otherwise notified them of a vacancy for a person with a disability.

The court also found no evidence that the employer created a workplace for a person with a disability or took any other measures to ensure compliance with the quota.

The court emphasised that, according to part one of Article 20 of Law No. 875-XII, administrative and economic sanctions are applied when the average number of employed persons with disabilities falls below the established quota.

The court also cited established Supreme Court practice, which dictates that an enterprise is not liable for failing to meet the employment quota for persons with disabilities if it created the necessary workplaces, timely and fully notified competent authorities about vacancies, but actual employment did not occur due to reasons beyond the employer's control. These reasons include a lack of candidates, refusal of persons with disabilities to be employed, or inaction by state bodies. This approach has been consistently upheld in Supreme Court rulings, including those dated 7 February 2018 (case No. 811/693/17), 6 March 2018 (case No. 825/695/17), 21 May 2020 (case No. 520/3919/19), and 3 August 2023 (case No. 120/4975/22).

However, in the disputed legal relations, the defendant failed to prove that they created a workplace for a person with a disability, notified the employment service of the vacancy, or took other legally required measures to meet the quota.

Given these circumstances, the court concluded that the employer failed to meet the employment quota for persons with disabilities, did not create the one workplace required under Article 19 of Law No. 875-XII, and did not pay administrative and economic sanctions within the legally prescribed period.

Consequently, the court found the claims of the Social Protection Fund for Persons with Disabilities for the collection of administrative and economic sanctions and penalties to be justified.

The court fully upheld the administrative claim, ordering the individual entrepreneur to pay the Zhytomyr Regional Branch of the Social Protection Fund for Persons with Disabilities a total of UAH 45,773.18, comprising administrative and economic sanctions and penalties.

Subscribe to our Telegram channel t.me/sudua, follow SUD.UA on Google News , and join us on VIBER, WhatsApp, Facebook and on Instagram to stay informed about the important events.