Lithuania: Latest developments in working life Q1 2019

A draft law on the promotion of social dialogue, talks on how to finance the public sector in the long term and the start of bargaining for the 2020 national collective agreement are the main topics of interest in this article. This country update reports on the latest developments in working life in Lithuania in the first quarter of 2019.

Draft law on social dialogue under discussion

During the first quarter of 2019, a draft law on the promotion of social dialogue was discussed[1] by the social partners at the Tripartite Council of the Republic of Lithuania and by members of parliament. [2]

Developed by a working group set up at the Ministry of Social Security and Labour, the draft law is designed to promote higher-level collective bargaining. It provides for a number of state aid mechanisms to assist in dealing with difficulties or uncertainties in higher-level collective bargaining. The draft law also provides for a mediation mechanism that can be activated when problem-solving assistance or expert assistance is required. The draft further sets out the following forms of state aid that could be applied to social partners:

  • relief from taxes and charges
  • promotional scores in public tendering and support projects
  • measures of financial support
  • provision of administrative services and consultations
  • organisation of training
  • additional guarantees for employee and employer representatives

The parliamentary members plan to discuss the draft at their spring meeting and the social partners at the Tripartite Council are to screen the draft at their upcoming sitting on 23 April.

Collective bargaining in the public sector ends with withdrawal

In December 2018, a commission formed by the government started its work on developing a draft strategy for financing the long-term sustainable pay of public sector employees up until 2025. The commission held a number of meetings with trade unions in the first quarter of 2019 to introduce the principles of the strategy and the draft strategy itself. After views were exchanged, the commission attempted to align the positions of the government representatives and trade unions in relation to increases in the remuneration for public sector employees and financing for the sector.

This process ultimately proved unsuccessful, as both parties maintained incompatible positions. The government representatives believe that expenditure for wages in the public sector are sufficient, but the sector itself is too large and ineffective. They maintain that wage increases should be supported by optimising the sector’s activities and structure.

The trade unions believe that priority must be given to wage increases rather than the optimisation of the sector, due to the fact that public sector employees in Lithuania receive an extremely low wage. The proposals that they submitted to the commission contained the following essential requirements:

  • a return of the basic official salary rate to pre-crisis level (€183) by 2020
  • to ensure that the minimum wage in the public sector accounts for at least 68% of the country’s average wage
  • to define sector-based strategic guidelines for average wage growth
  • to reduce the pay gap between senior managers and lower-level employees within two years

The government representatives rejected the requirements of the trade unions and no consensus was reached. In mid-March, the trade unions stated that they accepted no responsibility for the draft strategy and withdrew from the collective bargaining process.[3]

Bargaining for 2020 national collective agreement begins

On 15 January, the Lithuanian Trade Union Confederation (LPSK) presented the following proposals for national collective bargaining in the public sector:

  • to return the basic official salary rate for public sector employees to the pre-crisis level (€183) from 1 January 2020
  • to reduce the pay gap between the highest and lowest paid employees by raising wage coefficients for employees on the lowest wages
  • to grant three extra days of paid annual leave to trade union members affiliated with the LPSK and provide more favourable conditions for those looking to take training-related leave [4]

To date, the parties have agreed that a significant increase in the basic official salary rate for public sector employees is not reasonable, as this would only increase disparities between the lowest and the highest paid employees in the public sector. The issues regarding additional days of leave for trade union members and a wage increase for the lowest paid employees are also under discussion.

Commentary

Bargaining for the 2020 national collective agreement was initiated in early January so that an agreement can be reached before the national budget is approved in June 2019. Discussions are ongoing on a long-term perspective for the public sector, as the present situation does not satisfy either government representatives or the sector’s employees themselves.

 


Footnotes

  1. ^ LPSK (2019), Trišalėje taryboje – apie socialinio dialogo aktualijas bei perspektyvas , 23 January.
  2. ^ LPSK (2019), Seimui pristatytas Socialinio dialogo skatinimo įstatymo projektas , 13 February. 
  3. ^ LPSK (2019), LPSK nepritaria viešojo sektoriaus finansavimo strategijai , 15 March.
  4. ^ LPSK (2019), Vyksta derybos dėl nacionalinės kolektyvinės sutarties , 18 February.

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