The main reason for dismissal of a managing director is a termination of his / her corporate mandate. Additional grounds for dismissal of a managing director are described below. Such grounds may be divided into those related to the managing director’s breaches of employment duties (“termination with cause”) and those not related to the managing director’s actions (“termination without cause”). Termination is not generally allowed while a managing director is on annual or sick leave.
An employer may unilaterally dismiss a managing director with cause in the following cases:
- systematic unjustified failure to fulfil employment obligations;
- unjustified absence from work for more than three hours during one day;
- appearance at work while under the influence of alcohol or drugs;
- misappropriation of property;
- a single gross violation of employment obligations;
- actions of a managing director causing delayed or reduced payment of wages;
- immediate subordination to a related party contrary to the Ukrainian law ‘On Preventing Corruption’;
- actions of a managing director entrusted with company assets (cash or property) that result in the loss of the employer’s trust (if applicable); or
- immoral conduct.
Termination in most of these cases is regarded as a disciplinary sanction and must be imposed following special procedures prescribed by law.
An employer may terminate a managing director without cause in the following cases:
- termination of a corporate mandate of a managing director;
- termination on grounds provided in the managing director’s employment contract;
- additional general grounds for termination as described below:
- changes in organisation of work and production (redundancy);
- managing director’s unsuitability for the job or position due to lack of qualifications or poor health;
- reinstatement of an employee who previously occupied the position;
- recruitment by the army or mobilisation of an employer-natural person during a special period;
- managing director’s unsuitability for the job or position discovered within his / her probation period;
- absence from work due to sickness for more than four continuous months.
Termination without cause (except when a managing director is absent for four months due to sickness) is only allowed if a managing director cannot be transferred to another position or job.