The company did not provide documents while the director was on a business trip: the appellate court confirmed a fine of 128 thousand hryvnias

The Eighth Administrative Court of Appeal upheld the decision of the Rivne District Administrative Court, which refused to cancel the fine imposed by the Western Interregional Department of the State Labor Service on a company engaged in employment abroad. The court recognized the legitimacy of imposing a fine of 128 thousand hryvnias on the enterprise for creating obstacles during an unscheduled state control event.

Circumstances of the case

The basis for the unscheduled state control event was a citizen’s complaint regarding possible use of undeclared labor. The State Labor Service obtained the necessary approval from the central authority, issued an order and referral for the inspection, and also sent a request to the company to provide documents. The documents were sent to the company’s official email address and via Viber, and the company did not dispute receiving them.

On the scheduled days of the inspection, the company’s director was on a business trip abroad, no other authorized persons were present at the company’s location, and the requested documents were not provided to the inspectors. Due to this, the inspectors drew up an act stating the impossibility of conducting the state control event due to the creation of obstacles, after which they issued a decision to impose a fine under Article 265 of the Labor Code in the amount of 128 thousand UAH.

What the company claimed

In the appeal, the company insisted that the State Labor Service violated the inspection procedure. In particular, the applicant argued that the controlling authority should have first issued an order to eliminate violations before applying a fine. The company also claimed that the inspectors did not present the director with the referral, service IDs, or approval for the inspection, and that the director’s absence was due to a business trip, so there was no intentional obstruction of the inspection.

Position of the appellate court

The panel of judges disagreed with these arguments.

The court noted that in this case, an order could not have been issued because the inspection did not actually take place due to the impossibility of conducting it. Accordingly, labor law violations that could have been eliminated by fulfilling the order were not established, and therefore there were no legal grounds for issuing it.

The appellate court also established that the controlling authority took all possible measures to properly notify the company about the inspection. The referral, request for documents, and other materials were sent to the company’s official email and via Viber, and the company did not dispute receiving these documents. Under such circumstances, the employer bore the responsibility to ensure the possibility of conducting the state control event.

At the same time, the court referred to the Supreme Court’s practice, according to which the mere absence of the director or an authorized person at the company’s location is not an unconditional ground for liability for creating obstacles. However, in this case, the courts found that in addition to the director’s absence, the company did not provide the requested documents and did not ensure the presence of any authorized person, which collectively made the inspection impossible. These circumstances were recognized as sufficient grounds for imposing the fine.

Separate conclusion regarding the powers of the State Labor Service

The appellate court in case 460/8692/24 separately considered the company’s argument that after the expiration of Cabinet of Ministers Resolution No. 823, the State Labor Service allegedly did not have the authority to impose a fine based on an act of impossibility to conduct the inspection.

The panel rejected this argument. The court noted that the powers of the State Labor Service to impose fines are primarily defined by Article 265 of the Labor Code, and the procedure for their implementation is governed by the current Procedure No. 509. Additionally, the court referred to the Supreme Court’s legal conclusions, according to which the absence or change of subordinate normative regulation does not cancel the powers of the controlling authority directly provided by law.

Final decision

The Eighth Administrative Court of Appeal agreed with the conclusions of the court of first instance and left its decision unchanged.

The panel concluded that the State Labor Service properly notified the company about the unscheduled state control event, but the company did not ensure the possibility of its conduct, which was regarded as creating obstacles to state control. Under these circumstances, the court found no grounds to cancel the decision to impose a fine of 128 thousand hryvnias.

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