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Appeal of fines of the State Labor Service for non-admission to the visit

Andriy Gevko, lawyer

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The largest fines for violations of labor legislation are provided for not allowing the labor inspector to visit to identify undocumented workers or create obstacles to its implementation. In 2018, the fine is almost 373 thousand UAH. How to avoid or appeal this fine - we will analyze on the basis of current case law

Decree CMU № 295 dated April 26, 2017, which regulates the procedure for conducting inspection visits, provides for cases when the inspector may not be allowed to inspect, in particular if he does not have an identity card or he has violated the terms of the visit. In addition to the grounds for non-admission, which are determined by the resolution of the Cabinet of Ministers № 295, the provisions should be taken into account Law № 877, which also applies to inspections of the State Labor. According to this law, an inspector may not be admitted to an inspection visit if the inspector has not provided a copy of the referral or reported the reasons for the visit, or has not signed the inspection log.

Kharkiv District Administrative Court in its decision of 18.09.2018 in the case № 2040/5285/18 noted that the State Labor Inspectorate illegally did not provide the private individual with a copy of the referral for the inspection visit, and did not acquaint with the grounds for the unscheduled inspection visit.

When you can still get a fine for not being allowed to inspect the labor inspector, and how to appeal such fines, read on.

Not that fine

Article 265 of the Labor Code of Ukraine provides for 2 types of liability for non-admission to the inspection. This is a non-admission to the inspection on compliance with labor legislation, for which there is a fine of 11 thousand UAH, and non-admission to inspections to identify undocumented workers, for which a fine of 372 thousand UAH.

However, in most cases, due to non-admission to the inspection, the State Labor Service fines the business exactly UAH 372,000. In such cases, the courts take the side of entrepreneurs and draw attention to the fact that these are various violations. That is, if the order and direction for the inspection visit states that the subject of the inspection visit is compliance with labor legislation, then impose a fine of 372 thousand UAH will be illegal.

This position is set out in many court decisions. For example, the decision of the Odessa District Administrative Court of 22.10.2018 in the case № 815/3024/18, the decision of the Kherson District Administrative Court of 30.10.2018 in the case of № 2140/1852/18, the decision of the Odessa Administrative Court of Appeal from 12.07.2018 № 815/329/18

No one is home

In practice, there are often cases when the head of the enterprise or employees are absent from the place of registration of the business entity during the inspection visit, for example, they are on a business trip.

In such cases, inspectors draw up an act on the impossibility of conducting an inspection visit, after which they are fined UAH 372,000 for obstructing the inspection.

At the same time, the courts note that the drawing up of an act by the State Labor officials on the impossibility of conducting an inspection visit due to the absence of officials of the enterprise at its location without identifying signs of obstruction cannot be considered a sufficient independent ground for prosecution. The courts also take into account whether the business entity knew at all that an inspection visit would take place and whether it could knowingly create obstacles to its conduct.

This position is set out in the decision of the Dnipropetrovsk District Administrative Court of 06.09.2018 in the case  № 804/4657/18, the decision of the Dnepropetrovsk District Administrative Court of 11.05.2018 in the case of № 804/2702/18, the decision of the Kirovograd District Administrative Court of 31.10.2018 in the case № 1140/2499/18.

No documents were provided

Resolution № 295 stipulates that the requirement of the labor inspector to provide documents and / or their copies for inspection is mandatory. Failure to provide copies of documents is also seen by inspectors as obstructing the inspection and imposing fines.

However, courts note that the inspector may inspect the original documents, and the entity is not required to provide copies of the documents, especially if large volumes have to be copied and the inspector sets too short deadlines. Therefore, failure to provide copies of documents, provided that the inspector had the opportunity to inspect the originals, cannot be regarded as creating obstacles to the inspection and being a separate ground for imposing a fine.

This position is set out in the decision of the Kharkiv District Administrative Court on October 4, 2018 in the case of № 2040/5671/18 and the Decision of the Sumy District Administrative Court of 16.10.2018 in the case of № 1840/2620/18

Procedural violations

It should be noted that violations of the procedure for conducting an inspection or drafting a decision may also be grounds for appealing the fine for non-admission.

For example, the Odessa Administrative Court of Appeal in its decision of 05.07.2018 in the case of № 815/6704/17  took the side of the entrepreneur and pointed out that the State Labor Office had illegally issued a decision to impose a fine, as the controlling body had not provided any evidence confirming the advance notice of the entrepreneur about the time and place of the fine.

By its decision of September 18, 2018 in the case of № 820/3604/18 The Kharkiv District Administrative Court overturned the decision to impose a fine, in particular due to inaccuracies in the documents. The resolution states that the inspection visit by the inspector was carried out on the basis of a letter from a state body. At the same time, in the direction as the basis for carrying out inspection visit the "address of the physical person" is specified, instead of the letter of the state body.

As you can see, the courts often take the side of business and confirm the legality of not allowing a labor inspector to inspect. However, in order to legally prevent it, it is necessary to prepare for the visit and record all violations committed by the inspector. The responsible persons of the enterprise must know which documents of the inspector need to be checked and how to behave during the inspection. The fine for non-admission to the inspection can be appealed in court, but you need to gather convincing evidence of your rightness.

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