Latvia: Latest developments in working life Q1 2019
The state budget, protests from teachers over low salaries, salary increases for healthcare workers, governmental reforms and amendments to the Labour Law are the main topics of interest in this article. This country update reports on the latest developments in working life in Latvia in the first quarter of 2019.
State budget finally adopted
The government adopted the state budget on 3 April 2019. The budget itself was larger than ever (€9.2 billion compared to €8.75 billion in 2018) and funding was increased for several important sectors.
Despite the increased budget, it appeared that many pre-election promises remained unfulfilled, particularly in relation to financing in the healthcare sector and teachers’ salaries. The government said that the adopted budget was prepared by the previous government and should be considered a ‘technical budget’, one in which new ideas are presented.
Teachers protest over low salaries
It had been envisaged that, from 1 September 2018, lower teaching salaries would be increased from €680 to €710 and there would be further increases in the following years (€750 from 1 September 2019, €790 from 2020, €830 from 2021 and €900 from 2022). Consequently, the total funding for salaries in education in 2019 and the following years should be higher.
Since the budget was adopted late and considered a ‘technical budget’, sufficient financing was not provided for teachers’ salaries. However, the government promised to include this issue in the state budget for 2020.
The Latvian Trade Union of Education and Science Employees (LIZDA) did not accept that the government’s description of the budget as technical explained why teachers’ salaries were not being increased in line with the schedule that was agreed with the previous government at the end of 2018.
LIZDA said that the lack of financing for teachers’ salaries needed to be covered in the 2019 state budget or teachers would take industrial action. On 20 March, an estimated 2,500 teachers formed a picket line and demanded that the schedule agreed with the previous government be respected. After the industrial action, LIZDA Chair Inga Vanaga entered into negotiations with the government, but the negotiations did not convince her that the agreements would be fulfilled. The trade union therefore began a strike procedure, with the strike due to take place in September 2019.
Healthcare workers receive incremental salary increase
Healthcare workers appeared largely content with the increased funding for their sector (€87.5 million more than in 2018). While there was some negative coverage in the media regarding a failure to fulfil promises relating to wages, there were no reactions from social partners.
From 1 January 2019, the salaries of healthcare workers were expected to increase by an average of 20% compared to 2018 (wages were previously increased by 30% in 2018). However, there was a common misconception that all healthcare workers would receive the full 20% increase, according to Minister of Health Ilze Viņķele. In reality, because of the complicated system used to calculate salaries for medical workers, the level of the pay rise actually corresponded to a worker’s current level of pay (hence, the higher the current level, the lower the pay rise).
An additional complication was the fact that no workers had received the higher salary by February 2019, although the delay is being gradually compensated for from March onwards.
Government pursues reforms
The new government declared that reforms were its main focus. In the healthcare sector, the government decided that the two-basket healthcare system (where access to healthcare is divided into two ‘baskets’ of services) was ineffective and called for it to be replaced.  New proposals are expected to take into account how insurance should be implemented in the healthcare sector.
Reforms in the education sector were put on hold until the implementation of the administrative territorial reform. While this reform has been part of the plans of several governments – and some steps have been taken – it has never been fully implemented. The reform aims to amalgamate local governments in larger units so that there are 35 local governments instead of the current 119. It is also envisaged that the network of schools will be tied to the administrative divisions, which will result in the closure of small schools in rural locations.
Amendments to the Labour Law
On 7 March, the Saeima adopted amendments to the Labour Law that set out a work remuneration regime for civil guards when they are at training camps and reserve soldiers when they are on military training. The expenses of employers should be covered in the budget of National Armed Forces.
In the next quarter, attention will be focused on the results of European Parliament elections and the administrative territorial reform. While there may be little expectation that the elections will impact directly upon working life in Latvia, the administrative territorial reform has implications in terms of the loss of workplaces in former local government institutions and social services. It is not yet clear how the reform will impact rural development and what will happen with rural suburbs.