EurWORK European Observatory of Working Life

Lithuania: Trilateral agreement promoting social dialogue signed

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An agreement on reforms crucial to Lithuania’s economic growth was signed on 16 October after almost a year of discussions. The agreement, signed by Prime Minister Saulius Skvernelis and representatives of the social partners, identifies long-term objectives such as improving efficiency in the public sector, competitiveness and the quality of public services.

Key parties and objectives of the agreement

A national agreement on reforms (MS Word) necessary for the country’s economic progress was signed on 16 October 2017, after almost a year of discussions. It is the second such agreement – the first one was signed in 2009 – and was signed by Prime Minister Saulius Skvernelis and representatives of the following business and union organisations:

  • Lithuanian Trade Union Confederation (LPSK);
  • Lithuanian Confederation of Industrialists (LPK);
  • Association of Lithuanian Chambers of Commerce, Industry and Crafts (LPPARA);
  • Lithuanian Business Employers’ Confederation (LVDK);
  • Lithuanian Trade Union ‘Solidarumas’ (LPS ‘Solidarumas’);
  • Investors’ Forum;
  • Confederation of Lithuanian Employers (LDK).

The agreement identifies the following long-term objectives:

  • improving efficiency in the public sector and the quality of public services;
  • strengthening social dialogue and the powers of the social partners;
  • ensuring the quality and efficiency of education and training;
  • ensuring lifelong learning;
  • ensuring the compatibility and stability of tax systems;
  • developing the competitiveness of the country.

According to the parties that signed the agreement, it is a well-balanced and important step towards strengthening social dialogue. Although the agreement represents the interests of different groups – the government, businesses and employees – it is aimed at identifying solutions acceptable to all three. The parties to it believe the agreement will encourage businesses to join employer associations, and employees to join trade unions.

The agreement is expected to be implemented in a spirit of good faith, mutual trust and constructive dialogue.

Strengthening social dialogue

The agreement introduces several measures to strengthen social dialogue and improve the powers of the social partners. It promotes collective agreements, especially at sectoral and territorial levels, and it is expected that collective agreements in sectors and/or territories represented by employer and union organisations will be negotiated by the end of 2018, with negotiations for a national collective agreement starting in 2019.

Wage distribution across economic sectors will be analysed, ensuring a permanent debate between the signatories to the national agreement, and the production and implementation of guidelines for evaluating jobs and posts. Social dialogue and cooperation will be strengthened at Lithuania’s Tripartite Council (TCRL) and other fora.

In addition, remuneration for work will be increased in line with economic growth, and an agreement at the TCRL is expected on objective criteria for setting a minimum monthly wage. The bargaining powers of employees are also to be developed, and they will be encouraged to join trade unions with tax breaks for membership fees.

Finally, bills will be drafted and tabled to ensure that companies taking part in public procurement are checked for social responsibility, and that they pay, at least, average wages.

Other commitments by the parties

The national agreement also sets out a series of measures to improve public sector efficiency and the quality of public services. These measures include: optimising the number of employees in the public sector; reforming the health system; improving public finance management; improving the competitive business environment; ensuring efficient public investment in infrastructure; and ensuring the effective performance of the court system.

It also sets out commitments to three key areas: education; taxation; and economic competitiveness.

Education: The national agreement sets out to ensure the quality and efficiency of education and training, and lifelong learning. It provides for a number of initiatives including: the creation of an efficient network of comprehensive schools; vocational training and higher education institutions; strengthening links between education and business and society; developing a system for supervising qualifications; taking due account of business and science potential; developing lifelong learning; and developing the public’s financial literacy.

Taxation: A series measures have been set out to address taxation in order to: ensure a predictable, clear, fair and competitive tax environment which is as clear and straightforward as possible; reduce labour taxation by shifting tax burdens to taxes that are less detrimental to economic growth; ensure that the overall tax burden on business will not increase; agree proposed tax changes in advance with representatives of the signatories to the national agreement; promote productive tax measures in support of investment; and to promote investment in technological renewal and innovations.

Economic competitiveness: There are a number of measures in the national agreement that aim to develop the competitiveness of the country. These include: support for decisions leading to the improvement of the country’s business and investment environment (which is the most competitive within the region); increased funding for measures intended to attract foreign direct investments; investments in skills development; development of continuing and skills improvement measures; development of the national human resource monitoring system and ensuring human resource demand forecasting; strengthening activities intended to attract foreign direct investments; promoting exports from high and higher value-added industries and services; and strengthening economic diplomacy.

Further steps

To pursue the effective implementation of the agreements, the social partners also agreed to set up a working group comprising of one representative from each of the signatories to the national agreement. Discussions on the implementation of the agreement, chaired by the Prime Minister, will also be held at least once a year. It was also agreed that the Prime Minister should entrust the implementation of the national agreement to ministers who, where appropriate, should organise separate meetings necessary for its implementation.

At a sitting of the TCRL on 17 October 2017, the parties also resolved to draw up an action plan for the national agreement. It was agreed that representatives of the signatories to the agreement should prepare their proposals on specific issues of the plan to be discussed at TCRL meetings.

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