• Applicable Legislation
• Regulatory Framework
• Trade Unions
• Employers' Organisations
• Enterprise Agreements and Collective Agreements
• Employee Training Programs
• Employment Contracts
• Foreign Personnel
• Wages and Salaries
• Vacations
• Work Hours and Occupational Health and Safety

Prior to the restoration of independence of Lithuania in 1990, issues of labour relations arose only in the public sector and the labour legislation was orientated accordingly. Therefore, after 1990 there was a considerable need to amend or redraft legislation in order to re-introduce labour laws in the private sector as well as meet international standards.

At present, there is no uniform act regulating labour relations in the Republic of Lithuania yet. Apart from the old Code of Labour Laws of Lithuania, many separate new laws have recently been enacted. The new laws do not cover some areas of labour law regulated under the old Code of Labour Laws, for example liability of employees for damage caused to employers and disciplinary actions against employees. A new Labour Code designed to meet the requirements of relevant EU directives and applicable ILO conventions was expected to be enacted in.

Point of Interest
The new Labour Code expected to be adopted in 2002 and become effective from 1 January 2003 will introduce a number of changes in regulation of labour relations. As the new Labour Code was not yet promulgated at the time of preparation of this edition, it is not covered here.


Applicable Legislation

International Conventions

Lithuania is a party to the following International Labour Organisation (ILO) conventions: Nos. 11, 29, 47, 73, 79, 80, 81, 87, 88, 90, 98, 100, 105, 108, 111, 116, 127, 131, 135, 138, 142, 144, 154, 159, 160, 171, 173.

National Legislation

1. The 1 June 1972 Code of Labour Laws of the Republic of Lithuania;
2. The 13 December 1990 Law No. I-864 of the Republic of Lithuania "On Support of the Unemployed";
3. The 9 January 1991 Law No. I-924 of the Republic of Lithuania "On Wages";
4. The 4 April 1991 Law No. I-1201 of the Republic of Lithuania "On Enterprise Agreements and Collective Agreements";
5. The 21 November 1991 Law No. I-2019 of the Republic of Lithuania "On Trade Unions";
6. The 28 November 1991 Law No. I-2048 of the Republic of Lithuania "On Employment Contract";
7. The 17 March 1992 Law No. I-2386 of the Republic of Lithuania "On Regulation of Collective Disputes";
8. The 7 October 1993 Law No. VIII-2063 of the Republic of Lithuania "On Safety and Health of Employees";
9. The 1 July 1997 Provisional Law No. VIII-366 "On Compensation of Damages Caused by Labour Accidents or Professional Diseases";
10. The 17 December 1998 Law No. VIII-978 of the Republic of Lithuania "On Legal Status of Foreigners";
11. The 1 December 1998 Law No. VIII-947 of the Republic of Lithuania "On Equal Opportunities among Women and Men";
12. The 20 June 2000 Law No. VIII-1742 of the Republic of Lithuania "On Settlement of Labour Disputes";
13. The 13 December 1995 Resolution No. 1555 of the Government of the Republic of Lithuania "On Surcharges for Work under Harmful, Very Harmful and Hazardous Work Conditions";
14. The 1 June 2000 Order No. 62 of the Ministry of Social Security and Labour of the Republic of Lithuania "On Procedure of Employment of Foreigners in the Republic of Lithuania according to the Employment Contract";
15. The 30 May 2000 Order No. 61 of the Ministry of Social Security and Labour "On Procedure of Discharge of Groups of Employees and Its Prevention".

The Ministry of Social Protection and Labour is the main institution responsible for the regulation of labour relations. The Ministry of Labour and Social Protection prepares and implements State policies on social support, social insurance and labour relations, prepares drafts of legal acts and adopts legal regulations within its competence.

The State Labour Inspectorate supervises the observance of labour laws.

The main activities of the State Labour Exchange are the payment of unemployment compensation, provision of re-training services and general assistance to job seekers.


Trade Unions

After the restoration of independence in 1990, trade unions became entities independent from the government. Over time, trade unions are becoming more active. From those currently functioning, the most powerful associations of trade unions are the Centre of Free Trade Unions, the Association of the Lithuanian Workers, the Association of the Lithuanian Trade Unions and the Lithuanian Labour Federation.

Formation of Trade Unions

Trade unions may be established on the basis of professional, office, production, territorial or other principles that represent and protect the interests of employees, as determined by the trade unions. A group of trade unions, through free choice and on their own initiative, may join together to form a trade union association.

In order to establish a trade union, it must have at least 30 founding members, or its founding members must account for not less than 20% of all employees, but in no case may a trade union be established with less than three employees.

Trade unions have the capacity of a legal person from the moment when their articles of association (by-laws) are registered with the Ministry of Justice of the Republic of Lithuania, the County Governor or with the municipality, depending on the geographic area of their activities.

Union Membership

Citizens of Lithuania and other persons who permanently reside in Lithuania at least, 14 years of age and working under employment contracts or on other grounds provided by the law, have the right to freely join trade unions and take part in their activities. An employer or its authorised representative may not be a member of a trade union functioning in that enterprise, institution or organisation. Members join or leave trade unions based upon the procedures established by the trade union's articles of association. The employer or its authorised representative is prohibited from creating or maintaining employment relations conditional upon the employee's consent to refrain from joining a trade union or to withdraw as a member thereof.

Powers of Trade Unions

Trade unions function independently. State bodies, employers, government officials, political parties and other public organisations are prohibited from interfering with the internal affairs of a trade union. Trade unions may not be dissolved or suspended by an administrative order.

Trade unions represent employees when negotiating and concluding enterprise agreements and collective agreements. Trade unions organise and manage strikes and participate in the resolution of collective or individual labour disputes. Trade unions may draft proposals to amend labour laws and present them to the Government of the Republic of Lithuania or the Seimas (Parliament).

Point of Interest
The employees may negotiate and conclude enterprise agreements or collective agreements only through the trade unions.


Employers' Organisations

Employers' organisations function as associations of employers or other non-profit organisations.


Enterprise Agreements and Collective Agreements

An enterprise agreement is an agreement between a trade union and an employer or association of employers. Enterprise agreements operate only in the company, institution or organisation in which they have been concluded. The enterprise agreement is valid until a new agreement is signed. The term of an enterprise agreement may not exceed 2 years. Trade unions represent employees during the negotiation and conclusion of enterprise agreements. The collective of employees approves the enterprise agreement. Nevertheless, according to the law, if the collective of employees is represented by a trade union, it may only conclude an enterprise agreement through that trade union.

A collective agreement is an agreement between trade unions and the employers or their associations. A collective agreement may be effective throughout the entire country, a geographic region or in a certain branch of the national economy.

Both enterprise agreements and collective agreements include terms on payment for work, conditions of employment, management, labour protection, work and rest time and other social and economic conditions or additional guarantees. Terms of an enterprise agreement or collective agreement may not be less favourable for the employees than those established by the laws of the Republic of Lithuania.

Strikes are prohibited during the term of an enterprise agreement or collective agreement, as long as the employer complies with the agreement. A strike may be called when no more than two months remain before the expiration of the enterprise agreement or collective agreement.


Employee Training Programs

Public and private training programs are used to advance employee qualifications, satisfy the need for a qualified workforce, re-qualify workers with new job skills, increase productivity and ensure worker safety.

Typically, employers offer external business training for managers or professional training for skilled professionals, through various private organisations. Internal training, mainly industrial, is used in larger companies. Special training programs are offered to the unemployed through programs funded by the Government.


Employment Contracts

Terms

Parties to an employment contract must agree on the following substantive terms: the employee's place of work (a company, branch etc.), the official duties and/or position and remuneration. The employment contract may not establish terms less favourable to the employee than employment conditions stated under the law. If an employee has actually started work pursuant to a verbal agreement with the employer, the employment contract is considered to have been created and must be executed in writing.

Form

Employment contracts must be in writing and in accordance with the model form established by the law. The model form for employment contracts contains empty space for additional clauses.

Types

Employment contracts may be concluded for an indefinite period of time or for a fixed period of time if the work is of temporary nature or if the employee wishes to enter into an employment contract for a fixed term. Parties may stipulate a probation period in the employment contract which may not exceed three months. Parties may not stipulate a probation period for persons under 18 years of age, persons who are transferred from another enterprise upon the agreement of two employers, persons employed pursuant to tender in some instances, persons who have passed qualification examinations or in other cases provided for by the law.

Termination

Termination of an employment contract under the Lithuanian labour law is complicated and burdensome for the employer. The Law on Employment Contract contains a comprehensive list of the grounds for the termination of an employment contract, subject to different procedures for each situation. The employment contract may be terminated:

1. upon mutual agreement of both parties;
2. upon expiration of the term of the contract;
3. upon request of the employee;
4. upon the initiative of the employer, in cases provided for by the Law on Employment Contract. Cases of termination of employment upon initiative of the employer are divided into two groups: when an employee is not at fault and when an employee is at fault. The following cases illustrate termination actions under which an employee is deemed to be not at fault: liquidation of a company; reduction of the number of employees due to changes in production or work organisation; inability of the employee to adequately perform the assigned work due to a deterioration in health or lack of required qualifications. An employee is considered to be at fault under the following situations: if the employee neglects assigned work or is guilty of other violations of labour discipline, provided that he/she has been penalised for disciplinary reasons at least once during the 12 months prior to the violation; if the employee is under the influence of alcohol, drugs or other toxic substances during working hours; if the employee is absent without reason for the entire working day (shift); if the employee makes public the commercial or technological secrets of the company or divulges such information to a rival company;
5. at the request or will of the employer. The employer (with the exception of State and municipal companies) has the right to terminate an employment contract immediately and without prior notice due to other significant reasons not already provided by the law. However, in such case the employer must pay compensation depending on the employee's work record in that company (4 average monthly salaries if the employee has worked in the company for up to 5 years; 6 average monthly salaries if the employee has worked in the company from 5 to 10 years; 8 average monthly salaries if the employee has worked in the company from 10 to 20 years; and 12 average monthly salaries if the employee has worked in the company for more than 20 years); or
6. other grounds provided by the law.

Normally, in all cases when an employee who is not at fault is dismissed (including a reduction of the number of employees due to changes in production or organisation of work, but not including dismissal at the request of the employer), the employer is required to give the employee 2-month prior written notice (for certain categories of employees, 4-month prior written notice) and a severance payment (as a rule, equalling to 2 average monthly salaries of the employee). The amount of the severance payment is increased 1.5 times for an employee who has worked in the company for more than 5 consecutive years, 2 times - for an employee who has worked in the company for more than 10 consecutive years and 3 times - for an employee who has worked in the company for more than 20 consecutive years. In certain cases (including a reduction of the number of employees due to changes in production or organisation of work), the employer has a right to dismiss the employee only if it is not possible to transfer the employee, with his/her consent, to any other vacant job in the company.

Additional guarantees are provided for pregnant women, women who have children under 3 years of age, employees' representatives and in other cases provided by the law.

If the employee is discharged or transferred to another job in violation of the procedures established by the law, the employee may be returned to his/her last employment position by the order of the court or be paid compensation in the amount of up to 12 average monthly salaries.

Point of Interest
The employer must register each employee with the local department of the State Social Security Board on the day an employment contract is concluded. Employers must make social insurance contributions and withhold personal income taxes for all employees. The employer must keep in his/her records a document containing the employee's signature with a statement that the employee accepts and has knowledge of the standard rules and regulations of the company (e.g. work regulations, job position descriptions etc.). The employer must keep a register of employment contracts within the company and register each employment contract or any amendments thereto.


Foreign Personnel

Work Permits

Foreign citizens (except EU citizens) and stateless persons who are not permanent residents of Lithuania may work temporarily in Lithuania under an employment contract provided they have a work permit issued by the National Labour Exchange under the Ministry of Social Protection and Labour. A foreign citizen or stateless person who intends to reside in Lithuania for more than 3 months per half a year or work here (certain longer periods apply for job seekers who are EU citizens), must obtain a temporary residence permit. A foreigner may apply for a permit to the diplomatic missions or consular offices of Lithuania abroad or directly to the Ministry of Internal Affairs of the Republic of Lithuania if a foreigner has already legally entered the country. The permits are issued to foreigners to work in Lithuania consistent by quotas for the employment of foreigners as established by the Government of the Republic of Lithuania.

Exemptions

The law includes a list of exemptions for persons who do not need work permits. Exempted foreigners are required to obtain only a residence permit, as the case may be. Work permits do not apply to a person who is: a EU citizen; employed in order to implement joint programs of the Lithuanian Government with foreign States; a managing director, or his/her authorised representative, of a foreign enterprise or an institution that has established economic relations with a counterpart enterprise or an institution of the Republic of Lithuania; a professional sportsman and comes to work for a period not longer than 6 months; a managing director or managing director's authorised representative of a foreign capital enterprise (i.e. a company with the invested foreign capital, when shares or other ownership interests are wholly or partially owned by foreign investors); a specialist arriving to commission or calibrate equipment bought abroad or to train the staff how to operate the equipment; a consultant arriving to work for a period not longer than 3 months to Lithuania to perform scientific researches or to work as a lecturer in scientific or educational institutions for a period not longer than 3 months; or a student who comes to Lithuania as a trainee or to work according to exchange programmes carried out by international (non-governmental) organisations for a period of 1 year (which can be extended for 6 months).

Point of Interest
An employment contract with a foreigner who is not exempted from obtaining a work permit must be concluded in accordance with the standard form of the employment contract for foreigners which was approved on 1 June 2000 by the order of the Ministry of Social Security and Labour of the Republic of Lithuania. It is forbidden for the employee to engage in another work than specified in the work permit. The employment contract with a foreigner who is not exempted from obtaining a work permit must be registered with the National Labour Exchange within 3 days from its signing.


Wages and Salaries

Minimum Wage

The minimum wage is set periodically by the Government. From 1 June 1998, the minimum hourly rate has been LTL 2.53 (EUR0.73) and the minimum monthly wage has been LTL 430 (EUR 124.54).

Payment of Wages

Wages must be paid to employees at least twice a month in the national currency Litas (LTL). Wages may be paid once per month if employee presents a respective application in writing asking to pay wages in such a way.

Wage Differentials

At least 1.5 times the hourly wage rate, or a proportion of the monthly salary established for the employee, must be paid for overtime and night work (from 10 p.m. to 6 a.m.). Unscheduled work on days off and public holidays may be compensated by providing another day off within the month or, at the request of the employee, by paying at least 2 times the established hourly or daily wage without providing an additional day off. Employees must be paid 2 times their normal hourly or daily wage for work scheduled on public holidays. Employees are also entitled to receive pay differentials for work performed under harmful and very harmful work conditions.


Vacations

Annual Paid Vacations

The minimum annual paid vacation leave is 28 calendar days. The annual paid vacation leave is 35 calendar days for employees under 18 years of age, disabled persons and single parents who have a disabled child (until the child reaches 16 years of age). Normally, all employees are entitled to their annual paid vacation leave after they have worked in the company continuously for an initial period of six months.

Other Types of Leave

Other types of leave include:

1. maternity leave (70 calendar days before childbirth and 56 calendar days or, in the event of a complicated childbirth or birth of 2 or more children, 70 calendar days after it), which is normally paid by the company but covered by social insurance or social aid authorities;
2. child care leave (until the child reaches 3 years of age), which is normally paid directly by social insurance or social aid authorities;
3. study holidays, which are paid by the company if an employee is sent to study at the company's request (3 paid days for each normal examination); and
4. unpaid leave.

Normal Work Hours

The normal work hours for an employee may not exceed 40 hours per week. The length of a workday or shift is established according to the number of workdays or shifts per week. The average maximum work time, including overtime, may not exceed 48 hours per week. In exceptional cases only, the maximum length of the workday or shift, including breaks for rest and meals, may be up to 12 hours a day or more. A five-day workweek is the standard established under the law, but it may be extended to six days.

Occupational Health and Safety

The Law on Safety and Health of Employees provides for employer (company's) responsibilities and responsibilities of the head of administration in the area of occupational health and safety, including, but not limited to, the following:

1. to inform the State Labour Inspectorate of the commencement of enterprise or division operations;
2. to instruct and train employees in work safety and to check their knowledge thereof;
3. to organise occupational health and safety departments, medical services and health examinations of employees when and as prescribed by the law;
4. to create the conditions necessary to allow a labour protection system to function; and
5. to certify the company's ability to handle occupational health and safety matters (the first certification of the head of administration or his/her designee, occurs before the company begins operations and, thereafter, at not shorter than five-year intervals).

Point of Interest
Employers must instruct new employees in occupational safety and health matters, including safe methods of work, before the work begins. The hours of work and overtime hours worked by employees must be recorded in the register of work hours pursuant the accepted standard format. The competence of the head of administration or his/her authorised representative in occupational health and safety matters must be certified (heads of administration of certain non-production entities are exempt from this obligation).