Reservation of persons liable for military service: how to obtain the status of a critical enterprise

In times of war, it is crucial to retain key employees and identify businesses that play a crucial role in the country's development. Employee reservation is a necessary measure aimed at ensuring the stability of the Ukrainian economy. 

How to obtain the status of a critical enterprise? 

Based on paragraph 4 of part 1 of Article 25 of the Law of Ukraine "On Mobilization Preparation and Mobilization," a private sector enterprise has the right to book employees if it meets at least three requirements: 

• is a resident of Diia City,

• the minimum amount of taxes, duties and fees (other than customs duties) exceeds EUR 1.5 million per year,

• the amount of foreign currency receipts, excluding loans and borrowings, for the reporting tax year exceeds EUR 32 million,

• the company has no arrears in the payment of the unified social tax (UST),

• the salary is not lower than the average salary in the region, according to the State Statistics Service for the fourth quarter of 2021,

• the enterprise is a state-owned object of strategic importance for the economy and security of the state,

• is important for the national economy or meets the needs of local communities.

At the same time, some companies, in particular in the fuel and energy sector, may be recognized as critical enterprises if they meet any two of these criteria.

The list of critical enterprises with the right to book employees also includes foreign diplomatic missions in Ukraine, representative offices of donor agencies, implementers of international technical assistance projects, representative offices of international organizations, as well as international and Ukrainian non-governmental organizations that implement humanitarian projects funded by international partners.

The procedure for determining an enterprise as critical

1. The company applies to the relevant ministry or regional state administration with documents confirming compliance with the criteria and submits tax reports for the last quarter (at least one of the list):

• a copy of the tax return with the marks of the supervisory authority that received it,

• a receipt of acceptance of the tax return when it is submitted by electronic means of communication,

• a receipt from the supervisory authority that has the function of verifying and accepting the taxpayer's package of documents,

• a postal notification with a mark of delivery to the supervisory authority if the tax return was sent by mail.

2. The relevant ministry or regional state administration decides whether the enterprise meets the criteria and is designated as critical. A copy of this decision is sent to the Ministry of Economy of Ukraine and the General Staff of the Armed Forces.

   Important. Every year, critical enterprises must confirm their status. To do this, they submit an application (in any form) and documents confirming compliance with the criteria to the authority that made the relevant decision.

List of positions for booking employees

Reservation of employees liable for military service means providing a temporary postponement of mobilization of important employees at enterprises, institutions, and firms who play a key role in maintaining their continuous operation. 

Reservations are required: 

1. heads and deputy heads of critical enterprises,

2. employees of the fuel and energy sector enterprises, the list of which is approved by the Ministry of Energy,

3. employees of representative offices of donor agencies, project implementers, international technical assistance, international and Ukrainian non-governmental organizations that implement humanitarian projects funded by international partners.

   According to subpara. 4, clause 5 as amended by the Resolution of the Cabinet of Ministers of Ukraine dated 11.07.2023 No. 743, a critical enterprise may reserve no more than fifty percent of persons liable for military service who are subject to reservation and hold positions in local self-government bodies, except for persons liable for military service. 

In some cases, an organization may request to book more employees. But such a proposal must be justified.

Each public authority or enterprise defined in part 1 of Article 25 may independently select the employees it wishes to book and submit a proposal to the relevant state body.

The list of positions at fuel and energy enterprises that can be submitted for reservation has been determined:

• miners,

• electromechanical,

• elektromonteri,

• power engineers,

• locksmiths for the repair of technological installations,

• dispatches,

• employees of energy distribution companies,

• employees of the transmission system operator,

• management personnel, etc.

Article 23 of Law No. 3543 explicitly defines certain professions and positions that entitle a person to a deferment from mobilization.

First of all, these are employees of the security sector:

• Ministry of Defense of Ukraine.

• The National Police and the Guard.

• Foreign intelligence services.

• Anti-Corruption Bureau and the Bureau of Economic Security.

• Border Guard and Enforcement Service.

• SBU.

• State Protection Department, etc.

These are also researchers, research and teaching staff working in educational institutions at a minimum of 0.75 full-time equivalent.

Which employees cannot be booked?

First of all, these are those who are entitled to a deferral for other reasons. For example, a person has a disabled spouse or one of the parents who has a disability of group I or II. Then the law grants him a deferral on this basis. No deferral will be granted for reservations.

These are also people with rare military specialties. Among them:

• Drivers of tanks, armored personnel carriers and combat vehicles.

• Gunners.

• Operators of radio control equipment for missiles.

• Snipers.

They are also not subject to reservation:

• Employees who are not registered as persons liable for military service, i.e. conscripts — citizens under the age of 27.

• Citizens under 35 despite the scarce specialty.

• Persons liable for military service who are not fit for military service after passing a military medical commission.

The procedure for booking employees

First of all, the company determines the list of workers it wants to book and submits a letter of offer to the competent authorities. The institution to which the proposal is submitted will depend on the grounds for the deferral.

For example, if a company provides equipment repair services for the National Guard of Ukraine, it can submit a proposal to the Main Directorate of the National Guard or the Ministry of Strategic Industries.

What documents are needed to book employees:

• Copies of documents confirming the grounds why the institution is entitled to a deferral of conscription for its employees.

• A copy of the minutes of the general meeting and the order appointing the director who signed the proposal.

• A copy of the employment contract or employment record book or order of employment of the person to be booked.

When an enterprise has received a decision to reserve its employees, it must issue an extract to all reservists in accordance with the form prescribed by the procedure. Within five days from the date of issuance of the extract, the company must send a notice of reservation of a person liable for military service to the body where the employee is registered for military service for enrollment in the special military registration.

Extension of reservation for persons liable for military service

In most cases, employees are booked for a period of 6 months. If an employer needs to re-book an employee without waiting for this period to expire, they will need to re-submit a booking offer with the entire package of documents.

Cancellation of reservations for persons liable for military service

It happens in cases: 

• expiration of the deferral period,

• completion/cancellation of the mobilization task by the enterprise,

• deprivation of the enterprise of its critical importance status,

• dismissal of a person liable for military service.