Lithuania: Latest working life developments – Q3 2016

The adoption of laws related to the new social model, the possible consequences of Brexit for the Lithuanian economy and collective bargaining in the education sector are the main topics of interest in this article. This country update reports on the latest developments in working life in Lithuania in the third quarter of 2016.

New legislation

Lithuania’s new Labour Code was adopted by Parliament (Seimas) in June 2016. However, the President vetoed a number of the code’s provisions at the beginning of July. During its autumn session, Parliament refused to accept the President’s veto and left the law intact – as in the version adopted in June. The code will come into force on 1 January 2017 together with the other legislation that is part of the new social model.

The new code provides for more liberal conditions for dismissal, more types of employment contracts allowing for greater flexibility, and new rules on overtime. As previously reported, the new code has been strongly opposed by the unions. They claim that the code’s significant liberalisation of industrial relations will reduce employment security and even lead to emigration.

The social partners initiated several campaigns to try to influence the decisions of the President and Parliament. On 7 July, the Lithuanian Business Council (LVT), comprising four major Lithuanian employer organisations, stated:

The LVT finds the new Labour Code necessary for Lithuania to transition to more flexible and secure regulation of industrial relations which would better meet the needs of business and employees, and strengthen the competitiveness of the country.

On 10 September, the unions organised a rally near the Parliament, urging its members to support the President’s veto and adopt a more balanced version of the Labour Code that would better serve the interests of employees. They criticised politicians for adopting the new code without taking into account discussions and decisions by the social partners.

Implications of Brexit for Lithuania

Lithuanian business and employer organisations and economic analysts have been debating the likely implications of Brexit for Lithuania.

Analysts at one of Lithuania’s largest banks, DnB, pointed out that, prior to Brexit, the UK was one of the five most rapidly growing export markets for Lithuania. Following the vote to leave the EU, some industries working with the UK will have to fundamentally review their contracts and agreements, and to look for other markets and partners.

Experts at the Lithuanian Confederation of Industrialists (LPK) noted that Brexit had no immediate impact on Lithuanian exporters and their capacity to adapt to new conditions. However, they stressed the urgent need to clarify and define the new export conditions to the UK market as soon as possible.

On 27 September, the British Chamber of Commerce in Lithuania organised a debate involving representatives of Lithuanian and British business and the Lithuanian government on ‘Brexit and beyond: Political and business implications’. Among the speakers were Claire Lawrence, British Ambassador to Lithuania, as well as guests from the UK and Lithuanian business communities and the public sector.

Bargaining a collective agreement in the education sector

Bargaining on pay increases took place between the Ministry of Education and Sciences and unions in the education sector. The unions threatened protest campaigns if negotiations stalled.

At the end of August, teachers’ representatives received a promise from the government that, in September, a collective agreement would be signed to provide for a new payment procedure and pay increases. After the amendments to the pay procedure for teachers were approved, the salaries of some categories of teachers were increased on 1 September 2016. However, the collective agreement has not yet been signed. At the end of September, a meeting took place between the unions and the Ministry of Education and Science, the Ministry of Social Security and Labour, and the Ministry of Finance. This led to another amendment of the draft agreement, which was submitted for the government’s consideration.

On 13 September, the Tripartite Council of the Republic of Lithuania (LRTT) met to discuss resolutions adopted by the LRTT’s Education Committee that supported union demands for a separate law to determine teachers’ pay.

Despite some results from this lengthy bargaining, the education unions remained dissatisfied and, on 5 October (Teachers’ Day), organised the satirical campaign ‘Thank you, Prime Minister ...’ to give ‘thanks’ to the Prime Minister from all of Lithuania’s teachers.

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