Usually, according to the general principle enshrined in Article 38 of the Labor Code, termination of an open-ended employment contract at the initiative of the employee requires that the employee notify his employer of his intention to terminate the contract at least 14 days before the desired termination date.
Until recently, the courts applied this provision to legal relations arising between the managers of a limited liability company (hereinafter - the company) and general meetings. However, on September 6, 2023, the Supreme Court decided to depart from the previous judicial practice, in particular, in the part of statements that, according to the Labor Code, the head of the company, just like an ordinary employee, can resign at his own will, notifying the owner of the enterprise or a body authorized by him about it in writing in 2 weeks.
The Supreme Court emphasized that the legal relationship of appointing and dismissing the head of the company should be considered not in the context of labor relations, but in the corporate context that arises between the company itself and the persons who are authorized to manage it.
Therefore, the procedure for dismissing the head of the company should be regulated by the provisions of Article 39 of the Law "On Limited and Additional Liability Companies". According to this Law, the authority of the manager can be terminated or temporarily suspended only if a new executive body or a temporary executor of his duties is elected. The election or dismissal of the executive body of the company can take place exclusively at the general meeting, which, when resolving such issues, cannot take place by means of a poll.
Therefore, in order for the head of the company to resign, he must convene a general meeting of the company and include in the agenda of this meeting the issue of terminating the powers of the executive body by electing a new or temporary executor of his duties and, in compliance with the requirements of the Law, no later than 30 days before the date of the meeting, if other terms are not established by the statute, to send a notice to each member of the company about the date, time, place and agenda of the general meeting.
Oleksandr Fedorko, Attorney at Dynasty Law & Investment
