Background for Latvia

Between 2012 and 2022, annual gross domestic product (GDP) growth ranged from 7% (in 2012) to -2.2% (in 2020). In 2012–2022, except for the drop in 2020, the annual growth rate was moderate (1.9–4%) but stayed positive. In the 10-year period, the unemployment rate steadily decreased. Total unemployment stood at 6.9% in 2022. In the 10 years considered, there was an increase in employment, with the total employment rate being 74.3% in 2012 and 76.8% in 2022. In 2022, the employment rate of men (79.1%) was higher than that of women (74.5%).

Labour legislation includes the Labour Law (adopted on 20 June 2001), the Labour Protection Law (adopted on 20 June 2001) and supplementary legislation, the Labour Dispute Law (adopted on 26 September 2002), the Strike Law (adopted on 23 April 1999) and several other normative acts regulating pay for special groups of workers and other specific issues.

Employer representation, employee representativeness and collective bargaining are regulated by the Labour Law, the Trade Union Law (with a new version adopted on 6 March 2014) and the Employers’ Organisations and their Associations Law (adopted on 19 May 1999).

A law on the information and consultation of workers in EU-level commercial companies and groups of EU-level commercial companies, adopted on 19 May 2011, determines the role of European works councils.

In 2022, two sets of amendments were made to the Labour Law. The first amendments (adopted on 6 June 2022 and valid from 1 August 2022) introduced changes to more than 40 clauses in the main body of the law and three changes to transition rules (Latvijas Republikas Saeima, 2022a). These changes concern the following items:

• the regulation of collective agreements (for example, derogations from collective agreements)

• the obligation of a work placement service provider to inform an employee in writing of the recipient of the work placement service before the expected appointment of the employee

• new requirements regarding the content of employment contracts

• a stricter obligation for the employer to inform employees about employment rules and conditions

• new probationary regulations

• the employer’s duty to inform employees about business trips they are expected to undertake

• wider joint liability in the construction industry

• permission from the State Labour Inspectorate (VDI) for overtime work

• new regulations on working time for employees whose work schedules are not completely or mostly predictable

• employees’ right to adjust their working hours

• the rule that the taking of annual leave must not have adverse consequences

• the employer’s obligation to provide unpaid leave

• the entitlement of fathers to a longer period of paternity leave

• parental leave

The second set of amendments (valid from 25 November 2022) introduced exceptions in procedures for the determination and review of minimum monthly wages (Latvijas Republikas Saeima, 2022b).

The social dialogue system was established at the beginning of the 1990s, when the role of trade unions, employer organisations, collective agreements and the procedure for negotiations was set out in the Latvian Labour Law and other specific laws. The system is based on the principle of the voluntary participation of those involved. In the beginning, social dialogue was a bipartite process. Then, in 1993, a social dialogue system was established based on a tripartite negotiation process. In the same year, two tripartite councils were established, and in 1994 one more council was established. Employees were and still are represented by a single national-level organisation, the Free Trade Union Confederation of Latvia (Latvijas Brīvo arodbiedrību savienība, LBAS). Employers are also represented by a single organisation, the Employers’ Confederation of Latvia (Latvijas Darba Devēju konfederācija**,** LDDK) (established in 1993).

The National Tripartite Consultative Council of employers, the government and trade unions was established in December 1993. It was reorganised into the National Tripartite Cooperation Council (Nacionālā trīspusējās sadarbības padome, NTSP) in 1996.

On 12 May 1998, based on the ‘Concept of tripartite cooperation at national level’, the councils were amalgamated into one main council and several subcouncils.

A number of laws were introduced to regulate the social dialogue process. In 2002, a new Labour Law was introduced, which set out more clearly the main principles of social dialogue, obligations of employers and rights of employees.

Since the reorganisation of the social dialogue system in 1998, there have been no significant changes. Industrial relations are corporate and consensus-oriented. While they are strong, concerted and tripartite at national level, they are weak at sector level.

In 2017, the representativeness of employers in sector-level social bargaining was expanded to large enterprises through an amendment to the Labour Law. Such large enterprises should meet the same representativeness arrangements that are in place for the employer organisations.

The social partners were very active in mitigating the effects of the COVID-19 crisis. Initially, they expressed full support for the government actions aimed at limiting the spread of the virus and actively participated in designing and improving the support measures proposed and adopted by the government. Later in the year, the social partners stressed the importance of social dialogue in cushioning the impact of the crisis and called on the government to better honour the social partners’ initiatives.

The government played the main role at the beginning of the pandemic, having to take decisions quickly. Yet from the very beginning, the government tried to involve the social partners as much as possible in the working groups it established at that time.

The first group was established before the COVID-19 pandemic under the auspices of the Ministry of Finance to facilitate the collective discussion of state tax and fiscal policy. The second group was established at the Cross-Sectoral Coordination Centre to coordinate the operation of state institutions and comprised ministers and representatives of the social partners and non-governmental organisations. The third was the Operational Management Group – a working group for the coordination of interinstitutional operations. It was established by Order of the Cabinet of Ministers No. 2020/1.2.1.-84, adopted on 10 July 2020.

The largest social partners (the LDDK and LBAS) and other institutions (the Latvian Chamber of Commerce and Industry (Latvijas Tirdzniecības un rūpniecības kamera, LTRK), the Latvian Association of Local and Regional Governments (Latvijas Pašvaldību savienība, LPS) and the Latvian Academy of Sciences established a coalition they called ‘the great five’. Through the coalition, they coordinated their actions and prepared and submitted joint opinions.

This new approach to public discussion somewhat reduced the role of the social partners as agreements were reached in large, established groups.