In June 2012, the Lithuanian government approved amendments to the Labour Code to reform the existing Individual Labour Dispute resolution procedure. The current two-level system, consisting of Labour Disputes Commissions established in enterprises and in courts, will be replaced by regional commissions controlled by the State Labour Inspectorate. These new commissions will consist of trade union representatives, employers and a State Labour Inspectorate member.
Background
In Lithuania, a two-level procedure for Individual Labour Dispute (ILD) resolution existed. It provided for the hearing of individual labour disputes by a special Labour Disputes Commission at company level and in the courts. This was seen as unsatisfactory to both employers and employees, and was found to be inefficient. For employers, the formation of such a commission meant additional costs, and employees were often dissatisfied with the commission’s decisions. However, judicial resolution of ILDs in the courts was lengthy and expensive.
The new procedure, which comes into effect in January 2013, provides for resolution of ILDs by a standing Labour Disputes Commission (DGK) functioning as a territorial unit of the State Labour Inspectorate (VDI). A DGK will consist of three members; the chair of the labour disputes commission, an employers’ representative and an employees’ representative. These representatives will be appointed by employers’ organisations and trade unions functioning within the domain of State Labour Inspectorate’s territorial units. The chair of the DGK will be a civil servant with a university degree in law.
Social partners approved the proposed ILD resolution system at the sitting of the Tripartite Council of the Republic of Lithuania (LRTT) in October 2011. While discussing the draft of the legislation amendments necessary for the establishment of the new DGK system, social partners emphasised the need to leave space for employers and employees to resolve disputes themselves. It was agreed that employers and employees should be given the chance to come to an agreement before a sitting of the DGK.
It is significant that adoption of the new procedure for ILD resolution will not prevent enterprises from maintaining their own labour dispute commissions if such a practice is already in place. This was decided because in some large enterprises the ILD resolution procedures work well for both employers and employees.
Main principles of the DGK
According to the new legislation, representatives of employees and employers shall be released from work to attend the DGK. The State Labour Inspectorate shall be obliged to oversee the operations of the DGK and cover the costs of the DGK in relation to the hearing of disputes.
It is also stipulated that the labour inspectorate shall provide clerk’s services to the DGK using its own employees. The clerk shall accept and register applications relating to ILD resolution, prepare necessary documents ordered by the chair of the DGK, inform the parties of the time and place of hearing, and perform any other necessary duties.
The DGK shall issue a decision on the date of hearing. The decision shall be given in writing and signed by the members of the DGK, and can be decided by a majority vote. Copies of the decision shall be issued to the parties within three working days of the date of the decision.
It is expected that the implementation of all the suggested modifications will result in more speedy ILD resolution – the maximum time limit for dispute resolution shall be 30 days and decisions of the DGK shall be binding. Parties disputing the commission’s decision would have a right to appeal to a higher institution or court. Claims would have to be lodged to district courts within a month after the date of issue of the decision.
Commentary
The shifting of ILD resolution from enterprise and court level to a territorial-level tripartite commission is expected to improve the impartiality, transparency and the reasonableness of such decisions. As a result, ILD resolution should become more effective and, at the same time, more attractive to both employers and employees. According to the State Labour Inspectorate, Estonia recently went through similar changes, and there 80% of ILDs are resolved during the first sitting of the DGK.
Inga Blaziene, Institute of Labour and Social Research