Cross-border cooperation, Lithuania

The Lithuanian and Latvian state labour inspectorates conducted joint inspections of undeclared work in 2011, with a view to more effective control of foreign-based companies in terms of undeclared work. Two Latvian companies operating in Lithuania were inspected in 2011by both Latvian and Lithuanian state labour inspectorates. Although no illegal workers were detected during the inspections, the set objectives were achieved – the unprecedented cross-border inspection of undeclared work was successfully carried out in the country. More inspections of this kind are planned for the future.

Background

Globalisation and increased opportunities for labour and capital mobility influence, among other things the level of undeclared work (undeclared work). The control of undeclared work in companies operating in one country with headquarters in another appears to be extremely problematic. There are over 200 companies, with nearly 3,000 employees, currently operating in Lithuania that are held by Latvian legal or natural persons; in Latvia, there are over 100 companies, with almost 10,000 employees, held by Lithuanian legal or natural persons.

Objectives

The Lithuanian and Latvian State Labour Inspectorates, with a view to more effective control of foreign-based companies in terms of undeclared work, conducted joint inspections of undeclared work in 2011. As the construction sector accounts for the biggest number of identified cases of undeclared work, namely this sector has been selected for cross-border inspections.

Specific measures

In 2011, the State Labour Inspectorate of the Republic of Lithuania (VDI) inspected two Latvian construction companies operating in Lithuania. The inspections included the identification of all employees working in the companies. Information obtained during the inspections was communicated to the Latvian State Labour Inspectorate (VDI).

At the same time, the Latvian VDI, in its turn, carried out the inspection of these two companies in Latvia. The inspections covered the documents related to the employment of persons identified in Lithuania.

Comparable inspections of Lithuanian-based companies operating in Latvia are planned in 2012.

Actors involved

The inspections were carried out by the staff members of the Lithuanian and Latvian VDIs. One of the inspections was conducted in cooperation with officers from the Police Department (PD).

Outcome of evaluations: lessons and conclusions

Achievement of objectives

The collected information on the employees of the Latvian companies working in Lithuania (information on employment contracts, employees, actual working hours, etc.) was forwarded to the Latvian VDI. Although no illegal workers were detected during the inspections, the set objectives were achieved – the unprecedented cross-border inspection of undeclared work was successfully carried out in the country. As planned, the required information was gathered in Lithuania and forwarded to the Latvian VDI in a timely and expeditious manner.

Obstacles and problems

According to the VDI, there have been actually no obstacles and problems faced. The inspections were conducted in a smooth and well-organised manner. The most time-consuming task was the coordination of the joint inspections, so that both VDIs would simultaneously conduct the inspections in their respective countries.

Lessons learned

The organisation and implementation of the aforementioned practice demonstrated to both VDIs that such joint measures are absolutely possible and quite easy to implement. The acquired experience shows that joint efforts of labour inspectorates of several countries enable identification of violations and undeclared work control on transnational level.

Impact indicators

In 2011, the Lithuanian and Latvian VDIs carried out two joint inspections covering two companies operating in the construction sector. One of the companies represents small business (up to 50 employees) and the other one is a medium-sized enterprise (up to 250 employees).

Transferability

According to the VDI, the measure may be applied also in other Member States, sectors of the economy, and regions.

Inspections of this kind are to be continued in Lithuania. A joint inspection with the Latvian VDI is anticipated. In the future, such inspections are planned in all Baltic States – Latvia, Estonia and Lithuania, with a focus on the sectors posing the highest risk in terms of undeclared work.

Contacts

• Mr. Gediminas Noreika, Deputy Head, Law Unit, State Labour Inspectorate

Bibliography

Information on illegal work provided by the VDI.

2012 Action Plan for control of officially unaccounted economic phenomena. Approved on 14 February 2012.

Annual Report of the VDI, 2011.

Inga Blaziene, Institute of Labour and Social Research