Amendments of the new Labour Code increase the guarantees to employees

When the veto of President was overturned, on 14 September 2016 the new Labour Code (the Code or LC2016) was passed without any amendments. The Code eliminated a non-flexible regulation of labour relations. Nevertheless, the society strictly criticized the material changes established in the Code and it took only one week after adoption of the Code to see the first draft amendments to this law registered in the Lithuanian Parliament (lith. Seimas). The content of these drafts focuses on higher guarantees to employees but it does not contradict the main idea of this social model, which is the improvement of the regulation of labour relations through enhancing the possibilities for business development in Lithuania. On 3 November 2016 the Lithuanian Parliament started adjusting the provisions of DK2016.

The principle of interpretation of employment contract to the benefit of employees adopted

The presidential decree imposing veto on the Code contained proposals to establish that terms of the employment contracts should be interpreted to the benefit of employees in case there are doubts regarding them. Therefore, following the applicable rules set forth in the Labour Code that was adopted on 4 June 2002 (the current Labour Code) the Seimas approved the proposal to establish the principle according to which the doubtful terms of employment contracts should be interpreted to the benefit of employee.

The severance pays to employees increased

The draft law on amendment of the Code included a proposal to increase the severance pays to employees who terminate the labour relations on their initiative due to substantial reasons. The presidential decree contained proposal to differentiate the amount of severance pay subject to reasons which cause the termination of labour relations. However, the Seimas decided to increase severance pays to all employees which terminate labour relations due to the reasons classified as substantial according to the law.

After the LC2016 comes into effect, the employee terminating the employment contract in writing due to the serious reasons indicated in the law will be entitled to severance pay equal to his/her 2 months’ average wages (before the amendment the employee was entitled to severance pay equal to his/her 1 month average wage). The employees, whose labour relations lasted for less than 1 year, will be entitled to severance pay equal to their 1 month average wage (before the amendment they were entitled to severance pay equal to their 1/2 month average wage).

Notice periods for employees being dismissed are getting longer

According to the applicable Labour Code, an employee who is dismissed without his fault usually receives notice of termination 2 months in advance, whereas the notice period of 4 months applies to the employees who will be entitled to the full old age pension in less than 5 years, persons under 18 years of age, disabled persons or employees raising children under 14 years of age.

In order to gain flexibility in labour relations, the Code provides for a common 1 month term of notice, and the term of notice of 2 weeks applies to labour relations which lasted for less than 1 year. However, after discussions the Seimas agreed that the employees raising a child under 14 years and employees raising disabled child under 18 years need better social guarantees. Therefore after the amendments were adopted, the provisions of LC2016, like it was proposed in the presidential decree, the common notice period for such employees is 3 times longer.

Possibility to conclude zero-hours employment contracts eliminated

The Code distinguishes for new types of employment contracts which were available in the applicable Labour Code. However, after discussions the Seimas consented to proposals and arguments of non-governmental organizations and those specified in the presidential decree, that the type of zero-hours employment contracts should be rejected.

Shorter working hours on the eve of public holidays

The Seimas approved the provision which is also available in the applicable Labour Code, namely that the working time on the eve of public holidays should be 1 hour shorter, except for employees working under terms of shorter working hours.

Changes in accounting of working hours

The Seimas approved the proposal to elaborate that in addition to overtime, working hours on public holidays, working hours on rest days (if it is not specified on the schedule), and working hours at night the employer must include into accounting the actual working hours under agreement regarding additional work.

Longer annual leave

The Seimas grants better social guarantees to the employees raising at least one child under 14 years or disabled child under 18 years. Such employees have priority when a schedule of annual leave is made and the duration of their annual leave is prolonged. So, after the LC2016 comes into effect, such employees will be entitled to the annual leave of 25 or 30 working days subject to the length of working week, whether it consists of 5 or 6 working days.

Moreover, the Seimas consented to additional annual leave that should be granted to employees for a long uninterrupted employment at the same work place, for the conditions of work which are not in conformity with the normal work conditions and such variations cannot be eliminated, and for a special character of work. The duration, terms and procedure of granting of the additional leave will be established by the Government of the Republic of Lithuania.

For the meantime, the intended effective date of the new Labour Code with all its amendments is 1 January 2017 but the current political will is that the effect of long-awaited Code which would change the current inflexible regulation of labour relations may be postponed for half a year.

By Laura Tunkevičiūtė, Junior Associate, law firm GLIMSTEDT

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