Lithuania: Industrial relations in central public administration – Recent trends and features

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Despite several trade union organisations functioning in the CPA sector, there is no sectoral collective bargaining taking place. On the initiative of trade unions, a bilateral commission of civil servants was set up in 2010 under the LRTT. The crisis and the ensuing need for austerity measures were followed by a number of legislative amendments that resulted in a deterioration of civil servants’ pay conditions. Trade unions organised a series of protest campaigns in defence of civil servants’ interests. However, the remuneration for work was nonetheless reduced to most civil servants and it is still on the same level. The number of civil servants, which kept growing before the crisis, faced a stabilisation or even a slight decrease during the crisis.

1. CPA definition and restructuring

A definition of Central Public Administration (CPA) is: “Central government departments or ministries, which carry out planning, management and coordination functions, rather than public-service delivery functions.”

1.1 What, in the definition set out above, does not fit in your country experience?

In general, the above definition covers two of the four organisational-legal forms of institutions functioning at the central governmental level in Lithuania: the ministries and government agencies (the other two are government committees and commissions and agencies subordinate to ministries). Ministries are considered to be the main link at this level of executive power immediately inferior to the Government. The purpose of the ministries is to organise public administration in the entrusted spheres of administration. Government agencies are institutions of functional competence set up following the ministerial model. They are delegated inter-sectoral executive powers to implement public regulation and inter-sectoral coordination, control and other inter-sectoral functions. Government committees and commissions are collegiate institutions of executive power designated to perform advisory, inter-sectoral coordination, control supervision or jurisdictional functions. Agencies subordinate to the ministries are institutions set up by the Government to perform the functions delegated to the ministries. These institutions are usually entrusted with certain functions originally delegated to their founders.

1.2 What were the main structural reforms to CPA in the last 10 years (for example downsizing, devolution to state or local government, privatization, deconcentration)? Briefly describe each one of them.

A new version of the Law on Civil Service (LCS) adopted in 2002 and ongoing improvements of the existing legal base (the LCS has been amended for more than 20 times after its adoption in 2002) are aimed at enhancing the efficiency and effectiveness of civil service in Lithuania. Despite these efforts, the reform has not been completed: the principles for selecting civil servants are further improved; the system of motivation is being developed, etc. Fundamental changes in the public sector were entrenched in the Civil Service Improvement Conception (“the Conception”) approved by Resolution No. 715 of the LRV of 2 June 2010 and, later, in the Programme for the Improvement of Public Administration 2012–2020 approved by Resolution No. 171 of the LRV of 7 February 2012. The aforementioned Conception provides for a total of 10 areas of general governance and regulatory improvements of civil service, including linkage of a transparent wage system and financial motivation with performance results; development and implementation of motivation and career management measures promoting efficient and result-oriented activities; improvement of the system of social and other guarantees; improvement of civil servants’ training system; etc. (LT1308039Q)

Unfortunately, both the Eurostat and the Lithuanian Statistics (STD) provide figures on employment in the NACE 84 (public administration and defence, compulsory social insurance) sector from 2007-2008 only. Basing on the scarce information available, we may conclude that the number of CPA employees was increasing from 2002 until 2008-2009 (the increase was mainly related to the EU accession). After the outbreak of the crisis, the number CPA employees stabilised or even slightly decreased (LT1303019Q).

2. Austerity measures since 2008

2.1 Since 2008, were new pay and working hours policies negotiated by the social partners or unilaterally imposed (through, for example, a new law and/or a financial bailout package)?

On 19 December 2008, the Parliament of the Republic of Lithuania (LRS) adopted amendments to legislation introducing a 3% reduction of the basic amount used for the calculation of official salaries of state politicians, judges, state officials and public servants. The basic amount of official salary was repeatedly reduced on 1 August 2009; a total reduction in official salaries accounted for 8%.

In addition, a number of legislative amendments were adopted in 2009 and determined further reduction of remuneration for work to civil servants:

• bonuses for the qualification class were temporary reduced to civil servants;
• an earlier planned increase in official salaries was refused to some civil servants;
• rates of official salaries for civil servants of the highest categories were temporary reduced (LT1303019Q).

Although these reductions were planned to stay in effect until the end of 2010, they were renewed thereafter and still in effect in 2013. It is important to note that as soon as the discussions on salary reduction have started in July (2009) some trade unions initiated protests (a hunger strike) against the salary cut, however eventually because of difficult economic situation in the country they had to accept the mentioned amendments to legislation.

2.2 What were the key agreements or laws through which the changes were negotiated or imposed?

Main changes were imposed through the LCS.

2.3 Were these changes in line with analogous reform processes in the public sector in general and in the private sector? Please discuss the similarities and differences.

Although there have been no studies/surveys conducted in Lithuania to give grounds for an objective and substantiated answer to this question, the available information suggests that processes in CPA were more or less similar to those in the private sector. During the crisis, the measures undertaken by private sector undertakings in order to prevent bankruptcy included dismissals of employees or reduction of workforce costs through shortened working hours, unpaid leaves, reduction of wages/salaries, etc.

With regard to CPA in comparison with the whole public sector, we can say that, in general, CPA enjoyed better conditions comparing to the rest of the public sector. Accordingly, after the outbreak of the crisis deterioration in CPA’s conditions was more palpable than in the public sector in general.

2.4 In case there were processes of restructuring in CPA, were these negotiated or imposed?

All changes were basically implemented on the basis of legislation. As the public sector reform was initiated by the Government of Lithuania rather than being the outcome of any common agreement of the social partners, many measures (including salary reduction) were developed without prior agreement with representatives of trade unions (LT1308039Q). However, eventually most of the amendments to the Law of the Republic of Lithuania on Civil Service have been discussed and in principle agreed on with the social partners.

2.5 What types of reforms/changes have taken place since 2008 concerning: pension cuts and changes in retirement age entitlement

In 2009-2011, a decision to extend statutory retirement age was adopted in the country. It was decided to increase the statutory retirement age from 1 January 2012 by annually adding four months for women and two months for men to reach the retirement age of 65 for both sexes in 2026.

3. Industrial relations reforms

3.1 Are there formal industrial relations processes in the CPA, such as collective bargaining between trade union and management representatives or information and consultation via works councils? Do these apply equally to employees with diverging employment status (such as civil servants and others)?

Though several trade unions are operating in the CPA sector in Lithuania, real social dialogue does not take place in this sector. The main trade union representing interests of civil servants in Lithuania is the Lithuanian Trade Union of State Employees (LVTPS); another, rather small trade union, member of the Lithuanian Labour Federation (LDF) – Trade Union of State Employees (VTPS). The National Association of Officers’ Trade Unions of the Republic of Lithuania (NPPSS) is also rather active in the field. However on the employer’s side, there is no sectoral employer in Lithuania. The LCS defines only company-level employer – ‘head of a state or municipal institution/agency or his/her authorised person’.

3.2 Has there been a change since 2008 in the structure of collective bargaining, such as a breakup of centralized bargaining arrangements (decentralization), the creation of sector-specific arrangements within CPA (sectoralization), or the convergence of CPA industrial relations arrangements on the private sector or broader public sector? If not, did this change occur earlier?

In order to improve the situation of civil servants and negotiate working and employment conditions, CPA sector trade unions have been attempting to initiate the establishment of an independent bilateral council of civil servants in Lithuania for a number of years. Although the establishment of such a council has not been approved, a Bilateral Commission of Civil Servants was set up in 2010 within the framework of bilateral commissions under the Tripartite Council of the Republic of Lithuania (LRTT) (LT1004019I). This commission compromises the interests of civil servants and of the state, deals with current and ad hoc issues in connection with the civil service, including those directly or indirectly related to the working conditions of civil servants.

Moreover, the Ministry of Interior of the Republic of Lithuania (VRM) has recently joined the activities of the sectoral social dialogue committee for central government administrations. Trade unions expect these joint efforts within the committee to promote, inter alia, closer co-operation among social partners.

3.3 Is there a collective agreement in place for CPA? If yes, which were the main topics discussed or negotiated since 2008?

There is no sectoral collective agreement in place for CPA in Lithuania. Only company level collective agreements are signed in several municipalities of the country.

3.4 For those topics not covered by collective bargaining agreements, how are they determined?

Actually, all topics in CPA in Lithuania are determined by laws.

4. Social Partners

4.1 From the list of social partners set out in Annex 1 for your country, have there been any changes since 2010?

Please tick which ones are no longer involved and please list any new ones.

4.2 Is there competition among trade unions or employer representatives?

No.

4.3 Since 2008, have there been any mergers or de-mergers of trade unions or employers’ organisations?

No.

4.4 Have trade unions taken any specific responses to austerity policies, such as industrial action, coalitions with trade unions form other sectors, civil society, cross-border trade union alliances, intensified cooperation with management? If yes, please give details.

In response to LRV’s intentions to reduce the wage fund for the whole public sector, trade unions representing employees who are paid out of the public sector budget, such as teachers, lecturers, police officers, fire-fighters, cultural and health professionals, as well as civil servants, held a meeting on 25 November 2008. The trade unions also approached the LRV with an offer to discuss possible measures to overcome the economic crisis (LT0812019I).

On 4 December 2008, representatives of the public sector trade unions held another meeting to discuss the programme of the new LRV. The trade unionists expressed their flat disagreement with the government programme which contained the plan to reduce basic rates that served as a basis for calculating remuneration of the public sector employees (LT0812019I).

Dissatisfied with the government’s decision to cut the basic monthly salary in the public sector the Lithuanian Trade Union Confederation (LPSK) on 19 June 2009 adopted a ‘Declaration regarding inconsiderate and unreasoned policy implemented by Government of the Republic of Lithuania (LRV)’. Among other things, the statement declared that if the LRV will be further adopting one-sided approach in decision making, LPSK will use its right to organise protest actions as stipulated in the law. As the government ignored LPSK’s warning, the trade union confederation decided to launch a hunger strike (for more details see LT0907029I).

On 1 October 2009, four sectoral trade unions and the Pensioners’ Party simultaneously launched five protest actions near the parliament and four government ministries. The protests arose due to dissatisfaction with current government policy seeking to match budget revenue with expenditure, which will result in significant salary cuts for public sector employees and a possible reduction in social welfare benefits (LT0910019I).

In protest against savings in public agencies and organisations, in 2010 the LVTPS issued a referral to municipal councils, ministries and highest authorities regarding the ensuring of social guarantees to public employees and the application of the principle of solidarity in generating budget savings. In addition, the LVTPS has strongly objected to the signing of the National Agreement (for more information on the National Agreement see LT0908019I, LT0911019I, LT1011019I).

4.5 Have employers’ organisations taken any specific responses to austerity policies, such as, coalitions with trade unions, coordination with employers in other sectors or countries, EU social dialogue committee? If yes, please give details.

Not applicable.

4.6 What are the views of the social partners vis-à-vis the impact of austerity measures on the industrial relations in CPA? What, in their opinion, will be the most important issues for the sectors’ industrial relations in the near future?

As already written above, the trade unions at the central public administration have failed so far to initiate a real social dialogue at the sectoral level (despite the consultations are present). Whereas the working conditions and salaries of CPA servants are regulated by laws rather than by collective agreements, these conditions and remuneration for work were actually unilaterally changed by virtue of the relevant legislative amendments in order to save budget funds during the crisis. Though state institutions consulted trade unions before decisions were taken, the opinion and position of trade unions were not fully considered – wages were reduced despite opposition of trade unions, however reduction was modified with the respect of the trade unions’ views (e.g. salaries for civil servants were reduced unevenly – less for those who earn less and more for those who earn more). Therefore it is difficult to evaluate the impact of austerity measures on the industrial relations in CPA.

The main focus of the sectors’ trade unions in the near future will be related to the further negotiations on the restoration of the before-crisis working and employment conditions of the CPA employees as well as overall improvement of these conditions.

5. Commentary

We can say that functioning of trade unions is rather complicated in the CPA sector due to the valid national legal acts which regulate all employment and remuneration conditions of civil servants and other public employees in a very detail. And though consultations do take place and trade unions in CPA sector are rather active, legal power to fight for essential changes in the sector is very small.

Inga Blaziene, Institute of Labour and Social Research of the Lithuanian Social Research Centre