Lithuania: Unions wary of proposed new model of labour relations

The Lithuanian government has outlined improvements to labour law, employment and social security regulation in an effort to increase employment, improve labour relations, and promote investment. However unions are wary of liberalising labour laws and despite a year of public discussion, no consensus has yet been reached on the new legal-administrative model.

Background

The Ministry of Social Security and Labour (SADM) commissioned, in 2014, a working group made up of researchers from Vilnius University (VU), Mykolas Romeris University (MRU) and the Lithuanian Social Research Centre (LSRC) to develop a legal–administrative model for labour relations and state social insurance.

The group was tasked with developing a common, economically sound and balanced system for labour law, employment and social security regulation, aimed at increasing employment, improving labour relations, and promoting investments.

The working groups's main objectives were to:

• analyse and compare the best European practices on harmonising state social insurance, labour relationships and employment promotion measures;
• analyse and assess the Lithuanian situation;
• develop a legal–administrative model for Lithuania;
• prepare legislative drafts that to improve labour relations, employment and state social insurance regulations.

The new model is expected to create the suitable conditions for attracting more investment and establishing more jobs, as well as creating a more sustainable and transparent state social insurance system capable of guaranteeing adequate coverage.

Following their research, the group delivered:

• a legal–administrative model of labour relations and state social insurance;
• a draft Labour Code;
• draft laws regulating state social insurance (Law on Sickness and Maternity Social Insurance, Law on Social Insurance of Occupational Accidents and Occupational Diseases, Law on Unemployment Social Insurance, Law on State Social Pension Insurance);
• a draft law promoting the creation of jobs (Law on Employment).

Draft Labour Code

The Draft Labour Code is intended to combine employment security with better flexibility. It defines the following: types of employment contracts; new characteristics of labour relations; simpler ways of amending and terminating employment contracts; and more flexible regulation of working time.

Its key provisions are:

• simpler recruitment procedures, modification of working conditions in response to employer and employee needs, more and simpler types of employment contracts;
• less bureaucracy and greater use of IT; 
• more opportunities for combining employment with studying (including the right to request paid leave for training purposes);
• more flexible working time (including individual work schedules, flexible working hours within agreed or statutory limits, part-time work);
• more opportunities for reconciling work and family responsibilities (easier access to part-time work and arrangements for reverting to full-time work, more opportunities for home work and teleworking, allowing time off for family commitments);
• more diversified forms of employment (including project work, job-sharing, on-the-job training, employee-sharing, additional work).

Proposed social dialogue model

The group’s suggestions for regulations on collective bargaining include:

• segregating social dialogue from industrial relations;
• liberalising the laws governing industrial disputes;
• applying collective agreements made by a trade union to its members only, thus promoting trade union membership and better working conditions based on collective agreements;
• transposing statutory guarantees and privileges (such as who has priority in job retention, or rules for additional and extended leave) to collective agreements;
• extension of collective agreements.

One of the goals of the draft labour code is to ensure that employees get opportunities to participate, as observers or advisors, in their employers’ managerial or supervisory meetings about issues that affect working conditions. The code also stipulates that a works council can appoint some of its members to a company’s managing or supervisory body.

Under the code, it would also be easier to go on strike. The two main clauses governing strike action propose that:

• a strike cannot be called during the term of a collective agreement, to protest about conditions it covers, if the company is complying with the agreement;
• calling a strike has to be done in accordance with a union’s own rules, and requires the approval of at least one-quarter of its members in the workplace in question.

Commentary

Although the code contains a number of provisions favouring employees and fostering social partnership, trade unions argue that its liberalisation of the labour law will reduce overall the social guarantees for workers in Lithuania. In spite of almost a year of public and government-level discussions about the proposals, no consensus has yet been reached and it is difficult to say when, if ever, this will happen.