New Labour Code Developments

On 6 June 2017, the Seimas approved draft amendments to the Labour Code developed on the basis of the agreement of the Tripartite Council. The new Labour Code is expected to come into force as of July 2017.


Aušra Maliauskaitė-Embrektė



Laura Tunkevičiūtė


The gap regarding the information and consultation of employees has been filled

The new Labour Code (hereinafter referred to as the LC2016 or the Labour Code) provides for the duty of employers with the average number of employees of at least 20 to form a labour council election commission within 6 months from the enforcement of the LC2016. However, prior to the reading of amendments in the Seimas, the Labour Code did not regulate the procedure of information and consultation of employees until labour councils shall be formed following the procedure set forth by the LC2016. Thus, the Seimas approved the proposal stating that until a labour council is elected following the procedure set forth by the Labour Code and starts operating, a trade union acting at the employer’s level or the joint representation of trade unions acting at the employer’s level shall continue to implement the rights of information, consultation and other involvement of employees in decision-making provided by the LC2016.

The exclusion allowing for a labour council not to be formed irrespective of the established number of employees shall be applicable in cases where a workplace has a trade union, which acts at the employer’s level and which has among its members more than 1/3 of all the employees of the employer. In this case the functions of a labour council shall be performed by a trade union elected by members of trade unions or the joint representation of trade unions.

The employer’s duty in the field of information and consultation has been increased

For the purpose of establishing the principles of information and consultation, the Labour Code provides that consultations regarding information (data) provided by the employer and the opinion of the labour council must be held on time, and the opportunity must be provided for the labour council to receive reasoned responses from the employer’s representatives who make decisions.

After the Seimas approved the amendments, it was established that, should the employer violate the duties of information and consultation, not only the labour council but also a trade union shall be entitled to initiate a labour dispute within 2 months from the date it becomes aware of the said violation.

The moment when contracts of full liability concluded with an employee become void has been defined

Contracts of full liability concluded with employees prior to the enforcement of the LC2016 caused much discussion. In order to enshrine the explicit position of the Labour Code on this matter, the Seimas endorsed the proposal to imperatively state that contracts of full liability of employees concluded prior to the enforcement of the LC2016 shall be null and void as of the date the LC2016 comes into force.

Positions on agreements of non-competition during labour relations have been agreed

Following the reading the Seimas approved the proposal that the LC2016 should keep the existing possibility for the parties of the labour relations to agree on non-competition during the period of validity of their labour relations as well as upon their expiration. For the duration of the period of non-competition with the employer the employee shall be entitled to compensation amounting to at least 40% of the former average salary of the employee. The payment of the compensation shall not be prohibited during the period of validity of labour relations.

The procedure of providing employers’ information about employees has been amended

Once the LC2016 comes into force, the employer shall have the duty to regularly provide information about part-time employees and the situation of telework or fixed-term employment contracts only at the request of a labour council or, if there is no labour council, at the request of a trade union acting at the employer’s level. The previous regulation provided for the imperative duty of information irrespective of whether such request was or was not submitted.

The group of employees enjoying the right of priority to retain the job has been expanded

If several employees perform the surplus function of the job and only some of them are dismissed, the employer shall establish the criteria for the selection of employees to be dismissed by ensuring the right of priority to retain the job for the following additional category of persons: employees who are raising a child with disability under 18 of age. Upon the approval of the amendments to the Labour Code, the aforementioned grounds entitling to retain the job can be used by employees who alone care for their family members with less than 55% capacity of work, or family members who attained the pensionable age or who have high or average special needs. Meanwhile, the previous regulation did not require to state that the caring for the said persons was performed by the employee alone.

Maximum rate of working time has been agreed

It has been stated that the employer cannot demand employee to work more than 48 hours per each 7-day period, except in cases when there is a written consent of the employee.

In case of summary recording of the working time, the maximum working time cannot exceed 52 hours per each 7-day period. This rule shall not apply to work being performed under the agreement on auxiliary work and to work performed on duty.

The procedure for the organisation and recording of the working time has been amended

Summary recording of the working time can be introduced where necessary and only after the procedure of information and consultation with the labour council is completed, with due consideration to the opinion of a trade union acting at the employer’s level.

The recording period of the working time of employees working at night has been extended. After the Seimas approved the proposed amendments, the previous recording period of 1 month has been extended and shall not exceed 3 months. The employer shall have a duty to record the working time of employees; however, it was agreed to apply an exception in the case of employees whose working day (shift) is of a constant duration and the number of working days a week is the same, unless otherwise agreed in collective agreements at the level higher than the employer’s.

New requirements for temporary employment contracts have been enshrined

It has been established that only a temporary employment agency, which meets the procedures and the criteria set by the Government of the Republic of Lithuania or institutions authorised by the Government of the Republic of Lithuania, can be an employing party of a temporary employment contract.

To increase the protection of employees, it has been approved that periods between assignments for work under a non-term temporary employment contract, also periods between work assignments of a temporary employee, whose fixed-term temporary employment contract does not expire after the completion of work for the specific user of temporary work, up to 5 consecutive working days shall not be paid maximum once a month.

Amendments to the regulation of annual leave

The period of annual leave of at least 20 working days provided in the LC2016 has remained unchanged. However, the reading of amendments in the Seimas resulted in the approval of the proposal to repeal the provision stating that an employee shall become entitled to the full annual leave only if the number of days worked is equal to the number of days in the working year minus the number of days of annual leave pertaining to that year.

When establishing the number of working days in the working year pertaining to which the annual leave is granted, the new procedure provides that such calculation will also include working days attributed to the period of annual, extended or additional annual leave.

Employees shall be entitled to the compensation of expenses resulting from mobile work or work involving travelling

The LC2016 provides that employees who are engaged in mobile work or whose work involves travelling shall be compensated for the related higher expenses for the actual period of performing such type of work; however, the maximum threshold has been set. The amount of compensation cannot exceed 50% of the basic (rate) salary, and such compensation shall be paid in the event the employee is not paid business trip expenses.

The employer’s liability for the violation of the procedure of the payment of salaries or other disbursements related to labour relations shall be increased

If labour relations expire and the employer delays the settlement of accounts with the employee not through the fault of the employee, the employer shall have to pay forfeit amounting to the employee’s average monthly salary multiplied by the number of months of the delay, which cannot exceed 6. If the amount of the delayed payment is lower than the employee’s average monthly salary, the forfeit shall be the amount of the payment delayed by the employer multiplied by the number of months of the delay, which cannot exceed 6. The previous regulation provided that the multiplier could not exceed 3 in both cases.

The penalty for the failure to carry out the award of the Labour Arbitration has been provided in the LC2016

The award of the Labour Arbitration rendered after the settlement of a collective labour dispute shall be binding on the parties concerned. Therefore, in order to ensure that the award is carried out, the Seimas approved the proposal to provide for the maximum fee, i.e. EUR 500, to be imposed on the party failing to carry out the award, applicable for each week of the delay from the expiration of the deadline provided by the award until the award is carried out; however, for the period not exceeding 6 months.

By Aušra Maliauskaitė-Embrektė, Associate Partner, law form GLIMSTEDT; Laura Tunkevičiūtė, Junior Associate, law form GLIMSTEDT

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