For technology companies operating in Ukraine, the way relationships with IT specialists are organised is a key legal consideration. This was also one of the central topics in the dialogue between the state and the IT sector during the development of the Diia City regime.
As a result, the legislation enabled additional options for engaging IT specialists by Diia City residents, alongside standard mechanisms available under Ukrainian law, namely:
- employment contracts
- gig contracts
Employment contracts
Ukrainian labour legislation governing employment relations remains largely employee-oriented and, in many aspects, outdated, although ongoing efforts are being made to modernise it.
Under Ukrainian law, the use of employment contracts (as a more flexible form of employment compared to standard labour agreements) was limited to rare cases explicitly prescribed by law. With the introduction of Diia City, this option has been extended to relationships between Diia City residents and their employees.
An employment contract allows the parties to define key terms with greater flexibility, including:
- term of employment
- rights, obligations and liability of the parties (including financial liability)
- financial conditions
- organisation of work
- termination conditions (including early termination)
- other terms agreed between the parties
Importantly, loss of Diia City resident status by the employer does not result in termination of employment and does not affect the validity of existing employment contracts, including their individual provisions.
Gig contracts
A gig contract is a specific civil law agreement introduced under the Diia City regime, designed to combine contractual flexibility with certain social guarantees.
In particular, under a gig contract:
- key terms (including duration, remuneration, liability and termination) are defined by agreement of the parties
- the relationship is not considered employment; at the same time, performance under a gig contract does not constitute business activity of the gig specialist
- flexible remuneration structures are allowed (including performance-based elements)
- flexible termination is possible, i.e. either party may terminate the contract unilaterally with prior notice; the Diia City resident also has the right to reduce the notice period by paying compensation in lieu of notice
At the same time, Diia City legislation provides certain minimum safeguards, including:
- time spent for performance under the gig contract generally shall not exceed 8 hours per day and 40 hours per week (although irregular hours may be agreed under certain conditions)
- minimum standards for rest periods (e.g. at least 17 business days of paid annual leave)
- basic social insurance coverage (including maternity and temporary disability)
- limitations on deductions from remuneration
However, unlike employment contracts, gig contracts are deemed terminated if the company loses its Diia City resident status.
