Latvia: Strengthening the role of trade unions in ensuring employment rights

The largest trade union and the largest employers’ organisation have clashed over two proposed amendments to Latvian labour law. One is a provision that prohibits an employer from dismissing an employee who is a member of a trade union without prior consent of the union and the other deals with setting pay rates for overtime.

Stable and protective labour legislation

The view that Latvian labour law (in Latvian) is comparatively rigid and highly protective of employees' rights dominates in expert evaluations of Latvian labour legislation. Trade unions insist that they have a vital role to play in the incorporation of protective regulation in the current labour law, which was adopted in 2001. It is not therefore surprising that they defend the protection offered to workers by the legislation whenever necessary and, as a result, labour legislation has changed little since 2002 when it came into force. The law has been amended 13 times, significantly less than other key laws. The majority of changes have been supplementary provisions connected with the development of labour relations in Latvia and globally, or improvements to employees' rights.

Social partners clash on amendments to the labour law

In 2012, the Ministry of Welfare proposed extensive amendments to the labour law that were intended to introduce new regulations, improve existing practices and make the law more effective.

The opening of discussions on labour relations encouraged the employers to propose relaxing some particularly protective rules, but the trade unions opposed them. After long discussions, amendments to 35 articles were adopted on 23 October 2014. A further two amendments proposed to two articles were not adopted because the Free Trade Union Confederation of Latvia (LBAS) and the Latvian Employers’ Confederation (LDDK) could not agree on them. The two contested amendments concern LDDK's demands to:

• reduce supplementary pay for an employee who performs overtime work or work on a public holiday from not less than 100% of the hourly or daily wage rate specified for them to 50% (Article 68 of the labour law);
• abolish a provision that prevents an employer from giving an employee notice of termination of employment if the worker is a member of a trade union, without the prior consent of that trade union (Article 110 of the labour law).

These issues were discussed in several fora before they were submitted to the Cabinet of Ministers, discussed by the Cabinet of Ministers, submitted to the Saeima Commission of Social and Employment Affairs, and discussed by the Saeima Commission. Finally, the amendments were sent back to the National Tripartite Cooperation Council on 7 October 2014.

Employers call for changes

The employers insisted that the two contested provisions are especially harmful for the flexibility of labour relations.

Supplementary pay at a rate of 100% is considered too expensive and pushes employers into a shadow economy. In addition, in other Baltic states overtime rates are lower and this harms the competitiveness of Latvia, not only globally but also within the Baltic region. LDDK proposes a consensus that the overtime rate should be usual pay plus 50% for the first 20 hours of overtime, and plus 100% starting from the 21st hour of overtime. The same principle would be applied to work on a public holiday.

The rule that the employer has to obtain consent of the relevant trade union in cases of dismissal makes labour relations extremely rigid. The rule is sometimes abused when the employee concerned only becomes a member of the trade union just before the threat of dismissal. LDDK proposes the introduction of four exemptions when trade union agreement would not be necessary.

Trade unions disagree with employers

Trade unions argue that compensation for overtime work cannot be reduced because this would reduce income from work that is already low-paid. They point out that workers often readily agree to work overtime hoping for better pay and employers take advantage of this. Overtime work is poorly reported and in many cases not paid at all.

Regarding termination of union members' employment, LBAS insists that the current regulation protects employees from unreasonable notice of termination and that its removal would complicate court processes in such cases. However, the trade union has said that it had agreed on several amendments that make the labour law more favourable for employers.

Government supports trade unions

The government maintained a neutral position during the discussion on amendments to the labour law. Amendments to Articles 68 and 110 have to be agreed between the social partners and LBAS continues to want both articles retained. For differing reasons, the Ministry of Finance and the Saeima Legal Bureau support LBAS's position on supplementary pay for overtime work and work on holidays.

The joint efforts to reach consensus have resulted in several trade-off proposals:

• replacement of supplementary pay by supplementary holidays;
• inclusion of the decision on supplementary pay for overtime work and working on public holidays in collective agreements;
• amendment of the civil law to ensure faster and more effective solution of employment conflicts instead of abolishing the rights of trade unions to protect its members' employment rights.

At the time of writing, neither the contested amendments nor the trade-off proposals had been adopted.