Mobilization Exemption Canceled for Glovo, Favbet Employees

After presidential party MP Oleksandr Fedienko disclosed the names of companies whose staff could be deferred from mobilization for six months, Ukraine’s Minister of Economy, Yuliia Svyrydenko, canceled the directive. In doing so, she hinted that the companies were added after the General Staff agreed to the list with the Ministry of Digital Transformation.

The original directive offered deferments for:

• Glovo – food delivery company
• Favbet Tech – IT-department of betting service
• Visa – international payment service
• AgriChain – agricultural software company
• Kort – drone manufacturer
• Publicis Groupe – including subsidiaries of Leo Burnett, Saatchi & Saatchi, and other agencies

The list was originally drawn up according to Ukrainian law, which allows companies to defer their critical employees for six months, allowing them not to be mobilized to serve in the military forces.

This was the first time an official had disclosed details of private companies associated with the procedure. Fedienko, who is also a member of the Committee on National Security, Defense, and Intelligence, published the list of enterprises in a post on Telegram, followed by his own criticism of the selections.

“I am not against economic collapse, but the criteria must be changed. Enterprises that produce drones and robots cannot have the same history as you laid down in the criteria!” he wrote.

The Ministry of Economy confirmed the authenticity of the document to Ukraine’s leading online business media outlet, Ekonomichna Pradva. Staff  from these companies have been granted a six-month deferment from mobilization until Oct. 8, 2024.

But in a public post on Facebook, Svyrydenko wrote that public feeling led to the Ministry canceling the directive and seeking to establish how the deferment criteria had applied to every company mentioned. “We understand that deferring specialists [from mobilization] is the legitimate right of business… but this issue should not divide society” Svyrydenko added.

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She also explained that although the Ministry had signed the directives about exemption from serving in the military, the specific list of companies was created in the Ministry of Digital Transformation and agreed by the General Staff.

The mentioned companies could legally exempt their male employees from mobilization where they met three conditions: i) falling into a special tax regime for IT – Diia. City; ii) not being in arrears with payments to the state pension fund; and iii) employees being paid no less than the average salary in the region over the last quarter.

Companies can also exempt employees where:

• They pay taxes to the state and local budgets more than the equivalent of 1.5 million euros;
• Their revenues exceed 32 million euros (excluding loans);
• They play a vital role in the national or local economy according to the directive of central or local government institutions;
• They are included in the list of state enterprises strategically vital to the economy;

A company can exempt up to 50 percent of their staff. Glovo told Ekonomichna Pravda it had exempted 10 employees out of 108 employees in their IT department. Favbet Tech publicly stated it had exempted 15 employees without mentioning the overall number of staff. “The company’s activity is impossible without them”, it stated in a Facebook post.

Both Svyrydenko and Fedienko have stated that the criteria should be changed.

The procedure for mobilization deferment has caused intense discussion among Ukraine’s business community. The state is facing a dilemma between mobilizing as many people as possible for the Armed Forces of Ukraine (AFU) and enabling enterprises to have sufficient employees to run companies and pay taxes to the state budget.

Discussions between the state and the IT industry have also seen an industry desire to leave as many people exempt from mobilization as possible, with the argument that many IT specialists already serve in the AFU and provide tech solutions for warfare.

Favbet, a betting company included in the list, attracted particular public criticism because of the perceived unethical nature of betting.