Martial law and business in Ukraine

What is martial law?

It is no longer a secret for anyone in the world that the Russian Federation has been preparing for an invasion of Ukraine for more than fifteen years, according to open sources, such a decision was made by the Russian leadership back in 2004, during the “Orange Revolution”. After this event, it became clear that official Kyiv would never again turn in the opposite direction, namely, in the direction of the Soviet system.

After trying again to bring Viktor Yanukovych to power in 2010, Vladimir Putin thought he had succeeded in turning Ukraine back to dictatorship. But in early 2014, after the “Revolution of Dignity” and the flight of Viktor Yanukovych, it became clear that the Ukrainian people and elites would not just give up. At the same time, the Russian leadership launched a campaign to occupy Ukraine. But this operation could not be carried out in full, which resulted in the capture of the Autonomous Republic of Crimea, part of the Donetsk, Luhansk regions.

From 2014 to 2022, Ukraine did not submit to Putin! On February 24, 2022, the semi-legitimate president of Muscovy, with the help of the same crazy, completely illegitimate president of Belarus, sent troops into almost the entire territory of our country, thereby starting a full-scale war against Ukraine. In this regard, President Volodymyr Alexandrovich Zelensky issued a decree on the introduction of martial law, which was finally confirmed by the Supreme Council of Ukraine.

This special legal regime, which is introduced in cases of a threat to national security, provides for the transfer of emergency powers to local governments, which can restrict the constitutional rights, freedoms of citizens and legal entities in order to stop the invasion of foreign troops.

Why is martial law being introduced?

When the threat of an attack on the country becomes clear and inevitable, the state establishes a state of emergency in certain regions or on the territory of the entire country. Martial law can be limited in time, or it can be introduced indefinitely until the end of the conflict. The second option is when a surprise attack is made by enemy armed forces, as was carried out against our country on February 24, 2022, at five o’clock in the morning Kyiv time. In this case, a special legal cut is introduced immediately and for an indefinite period.

Reasons for declaring martial law:

1. Prohibit travel abroad for men of military age;
2. To prevent the entry into Ukraine of men from enemy territory from 16 to 60 years old;
3. Limit the rights of journalists in order to prevent false information about the state of the army at the front and in the rear;
4. Take full control of strategically important enterprises, transfer them to meet the needs of the national army;
5. Use the private, corporate property of citizens or firms to solve one or another, short-term, long-term task of protecting state sovereignty.

This list can be continued for a long time, but the point is to completely transfer the country’s economy to military rails. That is, everything that in peacetime is aimed at improving the well-being of citizens is now redirected to support the armed forces of Ukraine, which are constantly on combat readiness number one or, in modern terms, in full readiness, code red.

What are the consequences for business under martial law?

First, you need to understand that any legal regime marked “Special” or “Exceptional” is a partial or complete restriction of the constitutional rights and freedoms of a citizen, stateless persons and foreigners who are currently living, working or visiting the territory of Ukraine. As for legal entities, it is important to remember that the functions of managing the company still lie with the director, chief accountant. The management of the company is obliged to pay wages to employees in full. No one has the right to fire an employee or force them to go on vacation at their own expense. Also, the employer is obliged to provide a safe work process with the ability to take shelter in a bomb shelter in case of an air raid. The shelter must be equipped with everything necessary for the life support of personnel for at least one week. Also, the management of a private enterprise is obliged to ensure the transportation of employees to work and back home.

As for the property and production capacities of the company, at the request of the army or the local military administration, it can be withdrawn, transferred to serve the needs of the armed forces of Ukraine. At first glance it seems that this is not fair, but such are the realities of the state of emergency.

Important! Opening an LLC, registering a IE or company liquidating during an emergency period is almost impossible. And if it works out, then the problem will be obtaining permits, such as licenses, patents, up to the certificate of the payer of value added tax. An exception may be the change of the founder, the change of the beneficiary, the change of the director of the company. But even in this case, the action can go through the Ministry of Justice for more than one week. Opening a bank account for an enterprise can also be a difficulty.

What are the consequences for employed workers and the unemployed?

The legislation of our country protects the rights and freedoms of the working class very well. You also need to remember that Ukraine clearly follows all the norms and requirements of international law, especially in the part that concerns the use of hired labor. Recall that in our country, child labor, and even more so, slave labor, is completely prohibited. If it is proved that an enterprise, even a strategically important one, uses forced labor or minors as labor force, then the accused will face a long prison sentence or a strict regime.

As you know, in wartime, criminal liability increases several times. This means that the rights of the company’s employees become almost higher than the rights of the director or even the owner of a private institution.

As mentioned in the previous section, no one has the right to fire an employee or force them to go on unpaid leave. But the staff can independently write a letter of resignation of their own free will or for the provision of an unlimited vacation at their own expense. Often, the company’s administration asks its subordinates to step in and take such a step. But any lawyer will tell you that you don’t have to do that. Usually, the state partially or fully compensates wages to hired workers by direct transfer to a bank card, but this is only possible if the person is officially registered at the enterprise, all taxes for the previous reporting period have been paid for him.

As for unemployed people, they can be recruited to serve in the army, but not as soldiers, but as service personnel, dig trenches, cook dinners, knit camouflage nets, and so on.

Law firm “CENAT” recommends not to conflict with the employer, but to the management of private enterprises with the state during martial law, but to try to find a compromise and, if possible, provide the armed forces of Ukraine as soon as possible for the speedy victory over the enemy and the occupier!

As Napoleon Bonaparte once said: “He who does not feed his army will feed the enemy’s army”!