How We Recovered 11 Years of Insurance Record Through Court
Incorrect or incomplete entries in an employment record book are a fairly common problem that often comes to light only when a person applies for a pension. People frequently discover such errors when submitting an application to the Pension Fund of Ukraine for an old-age pension. One of the most common problems is the PFU’s refusal to include certain periods of employment in the insurance record because entries in the employment record book were completed incorrectly, contain discrepancies, or are missing altogether.
Periods of employment after 1 January 2004 present a separate challenge. Under Ukrainian pension legislation, the calculation of insurance record for these periods is linked to the payment of insurance contributions to the compulsory state pension insurance system. In practice, disputes arise where an employee actually performed their work but the employer failed to properly calculate or pay the required insurance contributions. Such circumstances can create serious risks for a person’s pension rights, as missing contribution data may result in a refusal to grant a pension or may affect the calculation of pensionable service and the amount of pension benefits.
Mr. Fediaiev contacted our lawyers after the Pension Fund refused to include 11 years of his employment in his insurance record. Some periods were excluded because of a correction to the date of the dismissal order, while other periods were excluded because the employer had failed to pay the required insurance contributions.
After analyzing the Pension Fund’s refusal and the client’s documents, we decided to challenge the decision before an administrative court. Our legal position was based on the following arguments.
First, an employee is not responsible for maintaining and completing an employer’s accounting or personnel records. In particular, an employee cannot be held responsible for errors or irregularities made when completing an employment record book or other internal documents of the employer. Therefore, deficiencies attributable to the enterprise that maintained and completed the employment record book should not deprive an employee of the constitutional right to social protection, including the right to an old-age pension. Accordingly, formal defects in an employment record book cannot automatically result in the exclusion of the relevant period of actual employment from the person’s insurance record.
Second, under Ukrainian legislation, responsibility for calculating and paying insurance contributions rests with the policyholder, namely the employer. An employee is not required to supervise this process and should not suffer adverse consequences as a result of the employer’s negligence or failure to comply with its statutory obligations. Therefore, an employer’s outstanding debt in respect of insurance contributions should not, in itself, deprive an employee of the right to have the relevant period of actual employment taken into account when calculating insurance record.
These legal approaches have repeatedly been reflected in the case law of the Supreme Court of Ukraine, confirming their relevance in disputes concerning the calculation of insurance record and pension rights.
Following consideration of the case, the court of first instance fully accepted our arguments and found the Pension Fund’s refusal to take into account the disputed periods of Mr. Fediaiev’s employment to be unlawful. The court ordered the Pension Fund to include the disputed periods of employment in his insurance record and reconsider his application for an old-age pension.
As the Pension Fund did not file an appeal, the court judgment entered into force after the expiry of the applicable appeal period. The pension authority subsequently complied with the judgment: Mr. Fediaiev was granted an old-age pension and received pension arrears for the relevant period.
The court judgment is available at the following link: https://reyestr.court.gov.ua/Review/125008708.
