Regulation of Labour Contracts New Labour Code – new challenges to Lithuanian employers

1. Regulation of Labour Contracts New Labour Code – new challenges to Lithuanian employers Vita Baliukevičienė, Head of Labour Law Division, Ministry of Social Security and Labour of the Republic of Lithuania 11 October 2017, Chisinau

2. Principles of labour law New principles of labour law - to achieve the balance of employees‘and employer‘s rights and interests: Principle of fairness and cooperation; Principle of correct information and protection of confidential information; Principle of anti-discrimination; Principle of the protection of the employee‘s personal data and privacy of personal life; Principle of respect of the employee‘s family commitments; Respect for the employee‘s pursuit of professional development; Portection of teh Honour and Dignity of Employees; Protection of material and non-material interests.

3. Prie-contractual Relations • Before the conclusion of an employment contract (also in cases when an employment contract has not been concluded) the parties to the employment contract must observe the obligations of non-discrimination, fairness, the duty to provide the information necessary for the conclusion and performance of the employment contract and to preserve the confidential information. • Prohibition to demand information from an employee that is not related to his/her health, qualifications or other circumstances unrelated to direct performance of job funcion; • Non-observance of these obligations provides the other party with the right to apply to dispute resolution bodies and to claim compensation for damages.

4. Types of employment contracts (1) • New types of employment contracts: • project-based employment contracts; • Job share employment contracts; • multiple-employer employment contracts; • apprenticeship employment contracts. • Also: • Open-ended employment contracts; fixed – term employment contracts; temporary agency employment contyracts; seasonal employment contracts. • Short-term employment contracts withdrawn.

5. Types of employment contracts (2) • New regulation of fixed-term employment contracts: • Fixed-term contract – also for works of permanent nature; In the meantime, fixed-term employment contracts are not allowed for permanent jobs. • Fixed-term contracts for jobs of permanent nature may not amount to more than 20 per cent of all employment contracts of the employer; • Maximum fixed-term contract term for the same function – 2 years, for different functions – 5 years; except when employed to replace the employee in temporary absence;The maximum term of fixed-term employment contract at present – 5 years. • Fixed-term contract (more than 2 years in duration) severance pay equal to the average wage of 1 month. • Notice: > 1 year – 5 working days in advance, > 3 years – 10 working days in advance. • Double unemployment social insurance contributions. 1.6 per cent*2 • Prohibition of discrimination; • Duty to inform about job vacancies; duty to offer job vacancy.

6. Types of employment contracts (3) • Specifics of project-based employment contracts: • Fixed-term employment contract; • Specific project result, its end, working time standard must be defined; • Employee works according his/her own working time arrangements at/outside the office; • Wage is paid at least once a month, hourly pay not less than the minimum; payment for work: based on time, for the result accomplished; mixed. • Specifics of apprenticeship employment contracts: • Fixed-term employment contract; • without or witha training agreement regarding formal or non-formal training; • Possibility of agreement regarding compensation of the training costs incurred by the employer.

7. Dismissal • New basis of dismissal – at the employers will (notice 3 working days in advance, severance pay – not less than the average wage of 6 months); • Where dismissal is initiated by the employer: 1. Notice period is reduced to: • 2 weeks - if less than one year in employment relationship; • 1 month - if employed more than one year; • two times longer –if less than 5 yrs until pension; • three times longer - if with children (adopted children) under 14 y/o; for disabled employees and if less than 2 yrs until pension; • retained guarantees for pregnant employees and employees with children under 3 y/o (they may not be dismissed at the initiative of the employer). 2. Reduced severance pays: • minimum wage of 0.5 month – if less than one year in employment relationship; • minimum wage of 2 months – if more than one year in employment relationship • Pay for long-term employment – minimum wage of 1-3 months, depending on uninterrupted record of service. Pay for long-term employment in budgetary institutions is paid by the employer.

8. Regulation of wage: • Obligation imposed on employers with no less than 20 employees on average – to define the remuneration system and make it accessible too all employees. Was not compulsory for employers in the 2002 Labour code. • The remuneration system has to state categories of employees by positions and qualification and the forms of remuneration and wage amounts for each of them (minimum and maximum), grounds and procedure of additional pay (bonus payments and supplements), indexing procedure of wages. • New obligation for the employer: to prove thatthe working standards have been established considering professional risk, working time costs and circumstances of the working function. • Minimum monthly wage can be paid only to unskilled employees. Minimum monthly wage is also paid to qualified employees. Unskilled work means work for which no special qualification skills or professional competences are required.

9. Collective relations • Division of the competence of trade unions and works councils: • trade unions – representation and collective agreements; • works councils – information and consultation Information and consultation has not been ensured in 2002 Labour code. • Formation of works councils is obligatory in companies where the average number of employees is 20 or more; • Collective agreement applies only to members of the trade union. If the parties agree – applicable to all employees, if approved by the general meeting of employees; • A collective agreement, which is made on the national, industry or territorial level, may aggravate the employee's position if social partners jointly agree on better conditions and thereby achieve the balance between the employer's and employees' interests • Easier declaration of strikes; • Legitimisation of lockouts – a temporary suspension declared by the employer or employers' organisation in the performance of the employment contracts of striking employees of one or several employers;

10. New obligations for employers (1) • Use the methods common in the workplace to communicate the collective agreements, agreements between the employer and the Works Council and local normative legal acts applicable in the workplace. • Provide information to the Works Council and the trade union about the average wage by groups of positions and gender. • Inform the Works Council about the status of fixed-term employment contracts; part-time employees; employees under remote working arrangements. • Adopt and use the methods common in the workplace to inform about the measures for implementing the policy of equal opportunities and the principles of enforcement supervision (when the number of employees is more than 50). • Ensure the prevention of psychological violence in the working environment. • Grant training leave both for formal and non-formal education and partly pay for such leave. • Form the Works Council (whe the number of employees is 20 and more).

11. New obligations for employers (2) • Employers with more than 50 employees must adopt and communicate a policy for protecting personal data of employees and its implementation measures. • Processing of excessive personal data is prohibited; • Employees must be informed about the procedure for using ICT and employee monitoring and control at work; • Video surveillance and audio recording – only when necessary to ensure the safety of persons or property; • Use of video surveillance and audio recording must be made known by a visual sign in a well visible place.

12. Exceptions to small companies (less than 10) • No requirement to provide information about remote working arrangements, fixed-term employment contracts, temporary work in the company; • No obligation to change the working time in case of part-time work when requested by the employee; • No obligation to approve the selection criteria for redundancies and form a selection commission when employees are made redundant at the initiative of the employer; • No obligation to inform about schedules of working shifts at least 5 working days in advance – must be informed at least 3 working days in advance, unless other notification terms are agreed with the employee; • No obligation to comply with the rules for determining the order of sequence for annual leave; leave is granted by agreement of the parties; • No obligation to pay for training leave; determined by agreement of the parties; • Possibility of refusing annual leave to the employee, if employed less than 1 year, however, a compensation for unused annual leave must be paid.

13. Thank you for the attention! Questions?