Social partners support draft bill to liberalise industrial relations

After lengthy discussions, social partners at the Tripartite Council of the Republic of Lithuania, the national level social dialogue institution, supported a draft law amending and supplementing 19 articles of the Labour Code. The changes seek to liberalise industrial relations and allow for consensus on a number of more flexible provisions in collective agreements, including in relation to employment contracts and severance pay.

In March 2009, social partners at the Tripartite Council of the Republic of Lithuania (Lietuvos Respublikos trišalė taryba, LRTT) met on two occasions to consider a draft law amending and supplementing 19 articles of the country’s Labour Code. The changes aim to allow for more flexible regulation of industrial relations and to promote social dialogue at company level. The draft was developed taking into consideration proposals of the Lithuanian Confederation of Industrialists (Lietuvos pramonininkų konfederacija, LPK), the Association of Lithuanian Chambers of Commerce, Industry and Crafts (Lietuvos prekybos, pramonės ir amatų rūmų asociacija, LPPARA), the Investors’ Forum (Investuotojų forumas, IF) and scientists.

Draft to mirror labour market needs

The draft is considered timely given the current situation in the labour market, which requires more flexible regulation of industrial relations in order to retain jobs and a legal context that places less of a burden on employers that are forced to dismiss employees for economic reasons. Compared with the existing Labour Code, the draft suggests that a number of more flexible employment conditions and guarantees should be introduced in collective agreements. This would not only create legal preconditions for more flexible and modern regulation of industrial relations, but would also promote social dialogue and the implementation of flexicurity principles in practice in Lithuania. Many provisions of the draft law at issue were proposed for a limited period of time – that is, until 31 December 2010, to cover the expected duration of the crisis.

Main amendments

Flexibility provisions

Among its provisions, the draft law proposes more flexible regulation concerning the creation and termination of fixed-term employment contracts: for example, fixed-term employment contracts would be offered, among other things, in cases where employment is of a permanent nature.

The draft also reviews provisions of the Labour Code concerning the termination of employment contracts at the employer’s initiative. For example, it is proposed that collective agreements should provide for lower severance pay and shorter terms of notice, compared with the current Labour Code. Moreover, the list of employees with whom employment contracts can be terminated only in exceptional cases should be reviewed. In addition, more convenient provisions could be set with regard to payments to employees due to be dismissed: for example, it is proposed to arrange with the employee to be dismissed payment of their severance pay in instalments if this is agreed in the collective agreement and necessary for economic reasons.

Working time

The draft law also proposes more favourable conditions for the more effective organisation of working time in enterprises. For instance, overtime work could be agreed not only in cases stipulated in the Labour Code and/or collective agreement, but also through individual agreements between the employer and employee. The draft also allows for part-time working arrangements to be introduced during periods of economic difficulties. Other provisions such as the electronic registration of working time in working time logs are also proposed.

Social partners support draft

According to the social partners, represented at the LRTT, the abovementioned amendments to the Labour Code would not only promote better flexibility in the labour market, but also allow for the signing of collective agreements at company level.

Inga Blaziene, Institute of Labour and Social Research

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