Publication

Case Study: automation of fines for the standard of workplaces for people with disabilities in Ukraine

28/03/2024

Vladyslav Ivanov

Associate

Data Privacy,
IT,
Labour and Employment

Vitalii Meliankov

Senior Associate

Data Privacy,
IT,
Labour and Employment

Just imagine: out of 325 claims filed in a year, only 5 are satisfied. Even single victory is great, but you want more. Simply increasing the quantity of claims will not be the safest option, right? Especially when each claim costs an average of 15,000 hryvnias (± USD 385), which are taken from a fund established for the needs of people with disabilities.

While everyone is dreaming about the impact of artificial intelligence on public administration, Ukraine has already automated the notification of violations of the standard for workplaces for people with disabilities.

The decision is reasonable - the war in the country has been going on for more than 10 years. It's quite difficult to imagine a Ukrainian who doesn't have a person with a disability in their life. Unfortunately, this publications’ existence hints automation needs improvement. We will analyze how reckless automation can lead to an excessive burden on the judicial system, unnecessary costs, futile lawsuits, and intimidation of business.

Who is the target audience of this publication?

  • Solution architects and innovators. This case study illustrates the importance of automation planning. The experience is applicable to private and public sectors alike.
  • Reformers. The article emphasizes the controversy of the current regulatory framework. Changes would help establish an effective system of guarantees for people with disabilities.
  • Volunteers. The publication mentions the problems of protecting people with disabilities, which cannot be ignored in a country at war. 
  • Lawyers. In addition to a solid example of how not to automate, we also share a legal analysis. 

We will start with a detailed analysis of the workplace standard, continue with a study of court practice, automation defects and its consequences, and conclude with a proposal to eliminate the problem.

Section І. Standard of workplaces. Fines for non-compliance

For the entire period of independent Ukraine's existence, there has been a regulation on creating workplaces for people with disabilities. It has evolved through several iterations, and currently looks as follows (Article 19 of the Law of Ukraine "On the Fundamentals of Social Protection of Persons with Disabilities in Ukraine"): 

 Picture 1. Current standard

Certainly, no regulation can safely function without fines. In our case, the fines are quite significant:

 
Picture 2. Fines for non-compliance

Failure to comply with the standard by a small entity (8 to 14 employees) may result in a fine of almost a million hryvnias (approx. USD 26.000).

The monitoring of compliance with the standard is entrusted to the Fund for Social Protection of Persons with Disabilities (the "Fund"), and the further use of the fine is detailed in the Procedure for the use of the funds received by the state budget from administrative and economic sanctions and fines for failure to comply with the standard for workplaces for the employment of persons with disabilities.

A careful reader may notice that the needs of people with disabilities are extremely different. How then can you create a workplace for a person with a disability without knowing the specifics? This is a decent question, so let's focus on it.

Workplaces for people with disabilities - what does it mean?

There is no regulatory definition of "workplaces for the employment of persons with disabilities". Instead, the Law of Ukraine "On Rehabilitation of Persons with Disabilities in Ukraine" offers the following terms:

Picture 3. Definition of a workplace for people with disabilities 

The following conclusions can be reached from the aforementioned definitions:

  • The workplace of a person with a disability can be without special conditions if the health condition allows it. 
  • Special workplace for a person with a disability is a workplace for a person with a disability that provides special conditions.

The letter of the Ministry of Labor No. 1/6-481/06 of 06.11.2008 confirms that a person with a disability can be employed in a regular workplace if it does not contradict the recommendations of the Medical Expert Committee.

Regarding the specific definition of "Workplace for Employment of a Person with Disabilities", we propose the following definition:

Picture 4. Definition of a Workplace for Employment of a Person with Disabilities

Readiness to provide such a workplace can be confirmed in (1) the company's internal documents and (2) the mention of inclusiveness in the vacancy announcement (this matter will be detailed below). 

Ensuring that the workplace is inclusive should not be considered carelessly - a refusal to consider the needs of a candidate, followed by a rejection on the same basis, will be considered discrimination.

Section ІІ. Judicial practice. Expenses for claims

The existing judicial practice (in particular, case 160/4187/19) indicates that the evidence of the creation of workplaces for the employment of persons with disabilities, is the Reporting Form No. 3-ПН "Information on the demand for labor (vacancies)" (the "Form No. 3-ПН").

The procedure for submitting the Form 3-ПН report is regulated by the Order of the Ministry of Economy of Ukraine No. 827-22 dated April 12, 2022, according to which the Form 3-ПН is submitted by employers to a branch of the interregional/regional employment center or in the Employer's E-Cabinet if there is a demand for labor (vacancy). Simply put, a proper job posting would be enough of evidence.
 
Representatives of the Fund often have a different understanding of a workplace for the employment of a person with a disability. Some court cases demonstrate that, in the Fund's opinion, a workplace for a person with a disability is only a workplace already occupied by a person with a disability. Hence, according to the Fund's position, even if a company has provided conditions for the employment of a person with a disability, but the person with a disability is not employed, there is a violation.

The court has repeatedly emphasized the falsity of this approach, stressing that the announcement of inclusiveness is sufficient evidence that a workplace for the employment of a person with a disability has been created (some examples of cases: 380/10319/22, 640/13406/22, 300/2438/22).

The widespread application of this approach results in significant expenses for the Fund. Since 2015, there have been no court fee exemptions. As of 2024, each claim for the imposition of administrative and economic sanctions costs the Fund approximately three to thirty thousand hryvnias (± USD 80 to 800) (Article 4(2)(3) of the Law of Ukraine "On Court Fees"). If the average court fee is UAH 15.000, then 600 claims will cost the Fund UAH 9 million (± USD 230.000).

Based on the aforementioned report of the Accounting Chamber and the research of the NGO Human Rights, the following statistics for 2017 can be found:

 
Picture 5. Statistics of claims for 2017

This approach, in addition to being unlawful, is also harmful to persons with disabilities. Under this view, it is enough for an employer to simply hire a person with a disability. From that moment on, the state authority will be convinced that the proper conditions have been created.

Unfortunately, hiring a person with a disability does not automatically lead to the appearance of ramps, adaptive working hours, or conscientious compliance with the recommendations of the Medical Expert Committee. Therefore, persons with disabilities may suffer from such a narrowed interpretation just as much as employers.

Section ІІІ. Automation

Until 2023, the Fund documented violations based on employers' reports. However, on November 06, 2022, Article 19 of the Law of Ukraine "On the Fundamentals of Social Protection of Persons with Disabilities in Ukraine" was amended as follows:

"The Fund for Social Protection of Persons with Disabilities annually by March 10, in an automated way, using data from the State Register of Compulsory State Social Insurance and the Centralized Data Bank of Disability Issues, determines enterprises, institutions and organizations, including enterprises, organizations of public associations of persons with disabilities, individuals using hired labor, which did not ensure the fulfillment of the standard of workplaces determined in accordance with part one of this  Article, and sends them a calculation of the amounts of administrative and economic sanctions to be paid in connection with the failure to comply with the standard of workplaces for the employment of persons with disabilities for the previous year, calculated in accordance with Article 20 of this Law."

Automation, as well as many other things, should be started with the questions "why", "how", and "what problems are we aware of". Since automation has already taken place, we ask these questions retrospectively:

Picture 6. Explaining the automation process

It is quite difficult to keep all the processes in mind, especially when they are merely planned. BPMNs help to visualise and consider everything. The model should be created before the automation starts, not vice versa. The entire process will be represented clearly, all aspects will be coordinated with the team, and most importantly, all defects will be easily visible.

Below, we have prepared flowcharts of the penalty algorithm before and after automation: 


Picture 7. BPMN of penalty before automation

Picture 8. BPMN of penalty after automation

The BPMN shows that under new procedure the Fund fines employers not knowing whether neeed workplaces indeed are missing. Fine is practically based on absence of employed people with disabilities instead of lack of workplaces for people with disabilities.

It should be remembered that a workplace for the employment of a person with a disability may be established yet remain vacant because the search for a candidate is pending. The reformed process unconditionally duplicates the known defects of the process, applying faulty logic to 100% of the notifications of violations in advance.

Section IV. Consequences

Use of wrong of data may throw off violation reports. Additionally, we have found the following consequences:  


Picture 9. A cascade of consequences

The flow of fruitless claims is an excessive burden on the already busy administrative courts, which also considers claims against the actions and omissions of state bodies. The Fund creates an unjustified burden on the courts, which will result in slower consideration of claims of persons with disabilities regarding violations of their rights committed by authorities.  

The Council of Judges of Ukraine reports that the Kyiv District Administrative Court alone received 43058 cases and materials in 9 months of 2023, and the standard time required for their consideration is 378401 hours. The actual number of judges with powers is 14 times lower than the required number of judges according to the standards. As a result, these wrongful fines affect both employers and the state due to the need to attract additional resources.

The Fund's reports and automation defects show that the burden on the court is only increasing:
 
Picture 10. Graph according to the Fund's statistics 

Section V. Alternative

Notwithstanding the severity of the problem, a full understanding of it makes finding a solution an easy task. The most obvious and swift one is to amend Regulation No. 121 (or to clarify Procedure No. 14-2 regarding the inclusion of inclusive vacancies received from the state employment center in the database) in the scope of data provided to the Fund. The list of information to be provided should include information on inclusive vacancies based on reports in Form 3-ПН submitted to the state employment center. 

In addition, the notification of violation may inform the employer that evidence of workplace creation may be provided to avoid a claim for a fine.

Taking into account the workplaces created, and not just the employed people with disabilities, will result in the following advantages:

  • The Fund will save millions of hryvnias. There will no longer be a need to pay court fees and incur other costs associated with considering violations that did not actually occur.
  • Reduced burden on the Fund as well. Instead of wasting time on hopeless claims, the Fund's specialists will be able to focus on more effective ways to protect the interests of people with disabilities (for example, on actually inspecting the compliance of workplace conditions).  
  • The pressure on employers and the court will be reduced. Penalties will be more predictable and fairer, and courts will have more time to consider cases with higher success chances.

Five and a half million hryvnias (± USD 140.015) may be converted to approximately 30 lifts for people with limited mobility. Not all municipal buildings are equipped with such facilities. Reducing the number of unsuccessful claims will help save funds for the development of inclusive infrastructure.

Authors: Vitalii Meliankov, Vladyslav Ivanov

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