Latvia: Latest developments in working life Q4 2019

The adoption of the state budget for 2020 and healthcare worker protests calling on the government to fulfil its commitment to wage increases are the main topics of interest in this article. This country update reports on the latest developments in working life in Latvia in the fourth quarter of 2019.

Overview of state budget for 2020

Despite protests from social partners, the state budget for 2020 was adopted on 14 November 2019. ^[1] The budget provides for several social improvements: for instance, the maximum level of the differentiated monthly non-taxable minimum of personal income tax will increase to €300 (from €230). This level will be applied to the monthly income level up to €500 per month (from €440) and gradually reduce after this wage level. The guaranteed minimum income (GMI) level will increase from €53 per month to €64 per month.

In state-funded healthcare services, patients’ fees (co-payments) for visiting a general practitioner will increase from €1.42 to €2.00 for patients up to 65 years of age (with some exceptions, such as children and people with disabilities), but will be reduced to €1.00 for those who are older than 65. Payments for some specialist services will also be slightly reduced.

Under the state budget, the minimum amount of old age pension will slightly increase from 1 January 2020, but is still low. For instance, for a person with the insurance period from 31 to 40 years, the minimum pension will be €120 (up from €96.05) per month and for a person with same insurance period and a disability the amount will be €184.04 (up from €160.08) per month. ^[2] In a long-discussed change to the pension system, an amendment was made to the pension regulation that will allow individuals to pass on their pension savings as an inheritance.

Under the state budget, the payment period of the unemployment benefit will be reduced from nine months to eight months. The amount of the benefit will be 100% of the calculated amount within the first two months, 75% within the third and fourth months, 50% within the fifth and sixth months, and 45% within the seventh and eighth months.

Contrary to previous years, the views of social partners during the adoption of the state budget were taken less into consideration. The budget was discussed in the three meetings of the National Tripartite Cooperation Council (NTSP). Social partners presented their suggestions regarding the budget, but these were not taken into account. The Employers’ Confederation of Latvia (LDDK) criticised the unsatisfactory involvement of social partners in the budgeting process and the Free Trade Union Confederation of Latvia (LBAS) declared that it does not accept the state budget for 2020.

Healthcare workers protest over pay

On 7 November, around 2,000 healthcare workers protested near parliament and called on the government to fulfil the commitment it made in December 2018 to raise the wages of healthcare workers by 20% each year until 2021 under the amended the Health Care Financing Law. The government increased the financing of wages in healthcare in 2020 by only €42 million, much less than €120 million prescribed by law. ^[3] Several organisations took part in the protest, including the Latvian Family Physicians' Association, the Latvian Junior Doctors’ Association, the Latvian Nurses’ Association, the Trade Union of Health and Social Care Employees of Latvia (Lvsada), the Pharmacists’ Society of Latvia and the Latvian Association of Rehabilitation Professional Organisations. The largest hospitals in Riga and the regions expressed their support for the industrial action by providing limited access to specialist services on that day, while still guaranteeing emergency medical care. ^[4]

According to the information from the organisations involved, approximately 4,000 healthcare workers participated in the protest actions. As a result, the government added €18 million to the previously assigned sum (reaching €60 million). In response, healthcare organisations arranged further actions, but no further results were achieved and actions slowly ended.

General agreement signed in fibreglass industry

On 17 December 2019, the Latvian Industrial Workers’ Trade Union and the largest fibreglass producer in Latvia, Valmieras Stikla Šķiedra, signed a general agreement. The general agreement will come into effect six months after its publication in the official bulletin of the Republic of Latvia, Latvijas Vēstnesis, and will be binding for three years from its effective date.

• Latvian Workers’ Trade Union and Valmieras Stikla Šķiedra: Glass fibre industry general agreement

Outlook

It is envisaged that social dialogue will enter a calm phase at the beginning of 2020. Healthcare workers are already in discussions with the government about the state budget for 2021, and there are no protest actions planned. In the education sector, the Latvian Trade Union of Education and Science Employees (LIZDA) has stated protests will be held if legislative amendments are made that exclude provisions on the schedule of teacher salary increases, as well as basic funding for science and higher education. By the end on first quarter of 2020, the yearly discussion on minimum wages should be high on the agenda.