Employers' organisations agree cooperation

In 2002 the total number of enterprises decreased by 2% compared with 2001. Over the same period, the number of the smallest enterprises - those that employ up to 10 people - decreased by 3.5%, while the number of larger enterprises increased. Small enterprises are most common in: forestry; fishing; wholesale and retail trade; repair of motor vehicles, motorcycles, personal and household goods; and health and social work. Large enterprises are most common in: manufacturing; electricity, gas and hot water supply; and post and communications.

The interests of employers are represented by two main central organisations - the Lithuanian Confederation of Industrialists (Lietuvos pramoninku konfederacija, LPK), which traditionally organises big business, and the Lithuanian Business Employers' Confederation (Lietuvos verslo darbdavių konfederacija, LVDK), which represents small businesses.

Lithuanian Confederation of Industrialists

On 12 April 1930, the first association of commerce, industry and crafts was established in Lithuania. The activities of this body were interrupted during the soviet years from 1940 onwards as, under the planned economy, the state had a monopoly of employment and exerted full control of all issues related to labour relations. On 17 June 1989, the pre-war employers' body was reconstituted as the Association of Lithuanian Industrialists, which at an extraordinary congress of in 1993 reorganised itself as the Lithuanian Confederation of Industrialists (LPK). Bronislovas Lubys was elected as the confederation's president, an office he still holds.

At present LPK unites 39 branch and eight regional associations that cover more than 2,700 enterprises, though some companies are direct members of LPK rather than of associations. A majority of manufacturing enterprises, banks, commercial enterprises, foreign-owned firms, research institutes and education establishments are LPK members. The activities of LPK members cover all main branches of industry.

LPK is non-political independent organisation, and claims that it has substantial influence on parliament and the government. Its key objectives are to:

• represent and foster members' interests in governmental, social and international organisations;

• strengthen the Lithuanian economy, help enterprises to find new markets and foster Lithuanian exports;

• adhere to environmental requirements;

• support employers' interests in the social and legal spheres and foster social dialogue; and

• develop relations with international employer, industry and business organisations.

According to LPK's statutes, membership and participation in the confederation are voluntary. Specific problems are addressed by the confederation's presidium, while most urgent economic, social and financial issues are discussed, and resolutions, statements and other documents adopted, in advisory meetings. All LPK members have to abide by the confederation's 'code of honour'.

The congress of LPK members is its supreme body and is convened every four years. The LPK council consists of 105 members and supervises the adherence to the confederation's rules and to the programme and the activities set out by the congress. The presidium consists of 50 members - it holds monthly meetings and works on the issues delegated by the council, and controls the work of executive directorate. The board consists of 13 members and is responsible for organisational, financial and economic issues, and responds to problems and controls the enforcement of decisions adopted by the congress, the board and the presidium. The executive directorate deals with day-to-day issues and 16 permanent committees draft confederation documents. The heads of industrial enterprises and qualified experts from different areas are members of these committees.

Four LPK representatives are members of the country's top-level tripartite body - the Tripartite Council of the Republic of Lithuania (Lietuvos Respublikos Trišalė taryba, LRTT).

Lithuanian Business Employers' Confederation

LVDK was established on 24 April 1999 from the merger of the two main confederations that represented small and medium-sized enterprises (SMEs), whose history went back to 1990.

At present, LVDK represents almost 1,800 enterprises and has 40 associated regional and branch associations. It is the largest organisation that represents SMEs. Its members are diverse, from sole proprietors to companies that employ up to 3,000 people, but 80% of members are SMEs employing up to 50 people. Individuals may join the confederation as observers.

LVDK is non-profit organisation. It seeks to create a favourable and secure environment for the development of business in order to create new jobs, encourage initiative and entrepreneurship and attract investment into Lithuanian economy. Its key objectives of LVDK are to:

• unite businesses in order to represent and secure their legitimate interests;

• analyse and evaluate the business environment, in order to seek favourable conditions to develop business;

• initiate the development of 'self-governance';

• provide information, advice and other support to businesses; and

• develop the activities of institutions that provide services to businesses.

The LVDK congress is its supreme body and is convened annually. It council meets every three months, attended by about 110 representatives of member associations, chairs of branch councils, members of the presidium and committee chairs. A presidium elected by the council convenes once a week. It consists of 14 influential and active company heads, who discuss urgent confederation issues, and seeks to be effective, flexible and responsive in prompt decision-making. The LVDK administration, run by a director general, deals with operational issues. Its experts make proposals on draft legislation, examine legal acts that relate to business, submit comments, participate in the deliberation of such measures in various government institutions, and make comments to the media. The administration actively looks for business opportunities in foreign countries and collects information on the situation of SMEs abroad. At present, LVDK is trying to unite businesspeople and encourage information exchange and feedback.

Two representatives of LVDK are members of the tripartite LRTT.

Current developments

On 21 September 2004, LPK and LVDK signed a 'memorandum of understanding and cooperation' and an 'agreement of understanding and cooperation'. The memorandum states that:

• in adopting important national decisions, Lithuanian political forces and public institutions do not take into consideration the need to consult the organisations that represent business community in order to obtain their opinion, arguments and proposals;

• the Lithuanian authorities often adopt legislation that is detrimental to business;

• the 'shadow economy' and unfair competition are detrimental to the development of business; and

• political corruption and the activities of monopolies have a destructive influence on businesses in the regions.

The memorandum sets out the aspiration of LPK and LVDK to consolidate the Lithuanian business community, improve mutual understanding and cooperation, exchange opinions and deliberate their position on the most urgent issues.

The LPK and LVDK agreement commits both parties to deliberate and coordinate their actions in: submitting proposals and offering opinions on the issues that are of interest to both parties; and representing and protecting the interests of both parties in the EU institutions and in public and international organisations. The two organisations will foster:

• cooperation among small and large enterprises;

• the development of SMEs, especially in rural and backward areas;

• innovations in manufacturing, commerce and other areas; and

• the development of the quality of human resources.

LPK and LVDK will focus their available resources on setting up a Lithuania business representation office in Brussels, and on encouraging cooperation between their expert groups in preparing business development programmes, drafting legislation and proposing amendments. Finally, both organisations will abide by a code of conduct and settle disputes among their members in a spirit of goodwill.

Commentary

Two key points should be mentioned with respect to the organisations that represent employers' interests in Lithuania. First, although employers’ organisations are influential enough, as they claim themselves, they treat the government and politicians - instead of trade union organisations - as their main partners/opponents in daily life. The provisions of the September 2004 LPK-LVDK memorandum and agreement are a confirmation of this. Second, Lithuanian employers’ organisations cover the private sector only. In the public sector, there is essentially no 'employer' as a social partner for public sector employees. (Inga Blažienė, Institute of Labour and Social Research)