The phrase "pay a one-off financial benefit after a separate decision of the board" in a dismissal order is not a deferral. It is an actual refusal stretched out over time, with no deadline at all. Courts systematically find such wording to violate the employee's right, and along with the benefit itself they award average earnings for the period of delayed settlement. In my case, the court of first instance recovered UAH 205,819.16 from JSC "Ukrzaliznytsia" (Ukrainian Railways). Below is how this works, how the amounts are calculated, and what to do if you were dismissed the same way.
In brief: 6 points
- A one-off financial benefit paid on first dismissal due to retirement is set out in the collective bargaining agreement. If the agreement is in force and has not been amended, paying it is the employer's obligation, not a favour.
- A clause in the order stating "payment to be made after a separate board decision" is not a lawful ground for withholding payment: an obligation cannot be made conditional on events with no deadline.
- Together with the benefit, the court awards average earnings for the period of delayed final settlement (Article 117 of the Labour Code of Ukraine) — capped at 6 months and adjusted for proportionality.
- Employees are exempt from the court fee in labour disputes (clause 1, part 1, Article 5 of the Law of Ukraine "On Court Fee").
- The deadline to sue is 3 months from the day the employee receives written notice of the amounts accrued (Article 233 of the Labour Code). A missed deadline can be reinstated for a valid reason.
- In my case, the court of first instance awarded UAH 111,181.25 in benefit plus UAH 94,637.91 in average earnings, totalling UAH 205,819.16.
What an employee is owed on retirement dismissal
On dismissal at one's own request due to retirement by age (Article 38 of the Labour Code of Ukraine), the employer must complete the final settlement with the employee on the day of dismissal (Article 116 of the Labour Code) and notify them in writing of the amounts accrued.
The final settlement usually includes:
- compensation for unused vacation;
- time-based pay for the period worked;
- overtime pay;
- a long-service allowance;
- a bonus;
- a health-improvement financial benefit.
But there is a separate item — the one-off financial benefit paid to an employee on first dismissal due to retirement — which is often simply missing from the final pay slip. Its amount is set by the collective agreement; in the case I handled, it was 5 average monthly earnings under the relevant clause of the collective agreement. In other units' collective agreements the amount can differ and depend on length of service in the industry — in some cases it is as much as 8 average monthly earnings.
The first thing to do is take your final pay slip and check whether it has a line specifically for the one-off financial benefit paid on retirement. The health-improvement financial benefit is a different payment and does not replace this one.
The "after a separate board decision" scheme
A typical dismissal order reads as follows: the right to the benefit is acknowledged, its amount is tied to a clause of the collective agreement — and then it adds that "payment is to be made after a separate board decision." Formally, there is no refusal. In practice, the person retires with no money and with no deadline by which they will receive it.
The legal core of the problem is that the employer makes performance of its pecuniary obligation conditional on circumstances with no defined time limits: the end of martial law, an improvement in the company's financial position, or a decision of management. The court in my case classified this as a violation of the principle of legitimate expectations: an employee cannot wait indefinitely for the exercise of a right already acknowledged in an order.
A telling detail: in response to a written attorney inquiry, the branch replied that the collective agreement was in force and had not been amended as regards this payment — but it gave no calculation and did not state the exact amount owed to the employee. In other words, the person was not even told how much they were owed.
The martial-law argument and suspension of the collective agreement
This is the employer's main line of defence, and it is worth knowing in advance. The argument runs as follows:
- in March 2022 the board decided to suspend additional payments provided for by the industry-wide agreement and collective agreements;
- the ground cited is Article 11 of the Law of Ukraine "On the Organisation of Labour Relations under Martial Law", which allows an employer to suspend certain provisions of a collective agreement;
- the payments were then supposedly resumed and made in stages on a schedule, and then, from April 2025, suspended again — this time citing cost optimisation and financial stability;
- a separate claim is added that the company is suffering significant losses due to infrastructure destruction.
Why this does not work. What matters is the actual status of the collective agreement:
- the collective agreement and the joint resolution of management and the trade union organisation remain in force;
- no amendments have been made to the collective agreement in respect of this payment;
- therefore, suspending the payment does not follow from a change in the agreement — it contradicts the agreement still in force;
- deferring performance indefinitely deprives the employee of the ability to effectively protect their labour rights.
This position is not unique to a single case: on 5 February 2025 the Supreme Court found a board decision suspending such payments to be unlawful, and it is this precedent that courts across the country now rely on.
How the 5 average monthly earnings are calculated
This is where a difference of tens of thousands of hryvnias hides, and this is where the parties most often diverge. The calculation is made under the Procedure for Calculating Average Wages (Resolution of the Cabinet of Ministers of Ukraine No. 100), and calculating "by eye" from the last two months' pay is a mistake.
The correct sequence:
- payments for the 12 calendar months preceding dismissal are taken;
- the sum is divided by the number of working days actually worked — this gives the average daily wage;
- the average monthly number of working days in the calculation period is determined;
- the average daily wage is multiplied by the average monthly number of working days — this gives the average monthly wage;
- the result is multiplied by the number of earnings set by the collective agreement.
How this looked in figures in my case:
| Indicator | Value |
|---|---|
| Working days worked over 12 months | 285 |
| Average daily wage | UAH 849.79 |
| Average monthly number of working days | 26.17 |
| Average monthly wage | UAH 22,236.25 |
| Benefit: 5 average monthly earnings | UAH 111,181.25 |
For comparison: the claim calculated the amount more simply — using the average wage over two months — arriving at UAH 138,242.20. The employer, conversely, had calculated UAH 102,897.80. The court agreed with neither figure and made its own calculation over 12 months. This is the normal course of events in such disputes: the court checks both parties' arithmetic.
From the amount awarded, the employer withholds personal income tax and other mandatory payments — the amount received "in hand" will be less than the figure in the operative part of the judgment.
The second claim: average earnings under Article 117 of the Labour Code
This is something most dismissed employees do not know about — and as a result they lose significant money. If the employer failed to make the full final settlement on the day of dismissal, it must pay average earnings for the whole delay period, starting the day after dismissal, but for no more than six months (this cap has applied since 19 July 2022).
An important and recent detail: six months is a ceiling, not an automatic amount. The Grand Chamber of the Supreme Court, in its ruling of 8 October 2025 in case No. 489/6074/23, clarified that this ceiling does not override the principles of reasonableness, fairness and proportionality, and the compensation retains its compensatory nature. The court assesses proportionality using the criteria set out in the Grand Chamber's ruling of 26 June 2019 in case No. 761/9584/15-ts: the amount of the overdue debt, its ratio to average earnings, and the parties' conduct.
How this worked in my case — the court's reasoning step by step:
| Step | Calculation |
|---|---|
| Total owed on dismissal | UAH 171,726.53 |
| Of which paid (vacation pay, time-based pay, allowances, bonus) | UAH 60,545.28 — 35.26% |
| Not paid (one-off benefit) | UAH 111,181.25 — 64.74% |
| Average earnings for 6 months — full amount | UAH 146,181.51 |
| Awarded proportionally to the unpaid share | UAH 94,637.91 (64.74% of 146,181.51) |
Practical takeaway: the larger the share of the final settlement the employer failed to pay, the larger the share of compensation the court will award. If nothing was paid at all, it is reasonable to claim the full six months.
The 3-month deadline to sue, and how to save it
Under part two of Article 233 of the Labour Code, in cases concerning payment of all amounts owed to an employee on dismissal, a claim may be filed within three months of the day the employee receives written notice of the amounts accrued and paid on dismissal.
The problem is obvious: a person receives the final pay slip on the day of dismissal, sees other payments listed there, believes the promise of "a separate board decision to come" — and three months pass while they wait.
Under Article 234 of the Labour Code, a court may reinstate a missed deadline for a valid reason if no more than a year has passed. In my case the court reinstated the deadline, and the following facts were decisive:
- the order stated that payment would be made after a separate board decision, but no one explained to the employee the timeframe or conditions for such a decision — this created a state of uncertainty;
- the employee was not passive: he sought legal assistance, and a written attorney inquiry was sent asking for the amount owed;
- in its reply, the branch gave no calculation and did not state the amount — in effect it did not answer on the merits;
- as of the time the claim was filed, the employee still had not been informed of the amount owed to him.
The practical takeaway is this: a written attorney inquiry is not a formality. It is both an attempt to resolve the matter without going to court, and evidence of your good faith if the deadline has to be reinstated.
My case No. 641/9437/25: figures and outcome
I represented a passenger-carriage attendant who worked for the railway from 1994 to February 2025 and was dismissed at his own request due to retirement by age. The dismissal order provided for a one-off financial benefit of 5 average monthly earnings — with a note that it would be paid after a separate board decision. This amount was missing from the final settlement made on dismissal.
What was claimed and what the court decided:
| Claim | Claimed | Awarded |
|---|---|---|
| One-off financial benefit | UAH 138,242.20 | UAH 111,181.25 |
| Average earnings for delayed settlement | UAH 165,890.64 | UAH 94,637.91 |
| Total | UAH 304,132.84 | UAH 205,819.16 |
| Court fee in the claimant's favour | — | UAH 757.11 |
The claim was granted in part. The judgment was issued by the Slobidskyi District Court of Kharkiv on 3 April 2026, case No. 641/9437/25, proceedings No. 2/641/1074/2026. The case was heard under simplified claim proceedings, and I took part in the hearing by video conference.
This is a first-instance court decision that, as of the publication date, has not entered into legal force. This material will be updated once a higher court reviews the case. The text of the judgment is public and available in the Unified State Register of Court Decisions under the case number.
Why in part, not in full. I will say this plainly, because it is more useful than advertising: the court did not accept the calculation of the benefit using the average wage for two months and recalculated it over 12 months — the resulting figure was lower. And it reduced the compensation under Article 117 of the Labour Code proportionally to the unpaid share. This is the typical outcome in this category of cases, and these are the figures worth using as a benchmark — not the largest headline amounts from the news.
This is the outcome of one specific case with a specific collective agreement and specific earnings. It is not a promise of the same outcome in your situation.
Other case law: how much is being awarded
This category of disputes has already become widespread, and courts across the country are ruling in employees' favour. A few benchmarks from public sources:
- on 5 February 2025 the Supreme Court found a board decision suspending such payments to be unlawful — this is the baseline position that lower courts now rely on;
- over UAH 404,000 was awarded to an employee who was not paid the retirement benefit;
- UAH 113,247.68 was awarded to a senior station operator with 37 years of service — there the collective agreement provided for 8 average monthly earnings.
The spread in amounts is easy to explain: different collective agreements (5 or 8 earnings), different wage levels, and a different share of the unpaid amount, on which the compensation under Article 117 of the Labour Code depends.
Documents: what to get, where, and why
| Document | Where to get it | Why it is needed |
|---|---|---|
| Order terminating the employment contract | The unit's HR department | Key evidence: it acknowledges the right to the benefit |
| Calculation of amounts accrued and paid on dismissal | Accounting department | Shows the benefit is missing from the settlement; the deadline runs from its date |
| The unit's collective agreement (current version) | Trade union, HR department | Determines the amount of the benefit: 5, 8, or another number of earnings |
| Certificate of wages for the 12 months before dismissal | Accounting department | The basis for the calculation under Procedure No. 100 |
| Data on working days actually worked | Accounting department, timesheets | Without it the average daily wage cannot be calculated |
| Employment record book | Held by the employee | Confirms length of service in the industry and that this is the first retirement dismissal |
| Written attorney inquiry and the reply to it | Prepared by the attorney | An attempt at pre-trial settlement and evidence of a valid reason for a missed deadline |
Action plan
- Check your final pay slip: does it include the one-off financial benefit paid on retirement (not to be confused with the health-improvement benefit)?
- Get a copy of the dismissal order and check whether it includes a clause on this benefit and the "separate board decision" proviso.
- Obtain the current version of the collective agreement and determine the number of earnings owed.
- Request a certificate of wages for the 12 months before dismissal and data on days worked.
- Send a written attorney inquiry demanding the amount owed be stated.
- Calculate both claims: the benefit itself and the average earnings under Article 117 of the Labour Code.
- File the claim at your place of residence or at the defendant's location. Employees do not pay the court fee.
Were you dismissed on retirement without being paid the benefit? Send me your dismissal order and the final settlement calculation — these two documents are enough for me to tell you what amount you are owed, whether you are within the deadline, and whether there are grounds to reinstate it. Consultations are held in Ukrainian or Russian; written communication in English is available. Write or call.
Mistakes that cost money
- Waiting for a "separate board decision". This is the most costly mistake: the deadline runs out while the decision may never come.
- Claiming only the benefit. The second claim — average earnings for delayed settlement — added almost UAH 95,000 in my case.
- Calculating average pay from two months. The calculation must be made over 12 months under Procedure No. 100. An inflated claim does not bring more money; it only lowers the percentage of the claim the court grants.
- Confusing the health-improvement benefit with the one-off retirement benefit. A health-improvement payment may appear in the settlement — that is no reason to consider the matter closed.
- Staying silent and not documenting your inquiries. Without a written attorney inquiry and a reply, it is harder to prove a valid reason for a missed deadline.
- Assuming court proceedings are expensive. Employees are exempt from the court fee in disputes over amounts owed on dismissal.
Frequently asked questions
Can the benefit be recovered if the order says "after a separate board decision"?
Yes. That exact wording was the subject of my case. The court held that making a pecuniary obligation conditional on circumstances with no defined deadline violates the employee's legitimate expectations.
How much time is there to file a claim?
Three months from the day the employee receives written notice of the amounts accrued and paid on dismissal (Article 233 of the Labour Code). If the deadline is missed, a court can reinstate it for a valid reason, provided no more than a year has passed (Article 234 of the Labour Code).
Is a court fee payable?
No. Employees are exempt from the court fee in cases concerning amounts owed on dismissal, under clause 1, part 1, Article 5 of the Law of Ukraine "On Court Fee".
Does citing martial law help the employer?
By itself, no — if the collective agreement is in force and has not been amended as regards this payment. The Supreme Court found a board decision suspending such payments unlawful, and courts rely on that position.
How much will the average earnings for delayed settlement amount to?
At most six months' worth. But the court assesses proportionality: in my case the compensation was awarded proportionally to the unpaid share, i.e. 64.74% of the full six-month amount. The full six months cannot be guaranteed.
Does this only apply to railway workers?
No. The logic applies to any employer with a collective agreement providing for a similar payment on dismissal due to retirement. Only the agreement's wording and the amount of the payment change.