European Trade Union Institute, ETUI.

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Industrial relations in Latvia: background summary

Industrial relations in Latvia

  • The right to collective agreement and the right to strike are protected by the Latvian Constitution. The Constitution also obliges the state to protect trade union freedom (Article 108).
  • There is one recognised trade union confederation, the Free Trade Union Confederation of Latvia (Latvijas Brīvo arodbiedrību savienība, LBAS). It was established in 1990 and replaced the former union structure which had existed when the country was part of the Soviet Union. A union can be established by as few as 50 people and although almost all significant unions belong to the LBAS, some smaller ones remain unaffiliated. The LBAS has 20 industry-level affiliated unions and around 100,000 members, down from 275,000 in 1995.
  • The drop in both the membership and the popularity of trade unions in the post-Soviet period following 1990 could be partially explained by their perceived association with the old Soviet regime, where membership was quasi-mandatory and trade union freedom illusory. Union ranks also suffered depletion in more recent years due to the sharp rise in unemployment caused by the European sovereign debt crisis. Nevertheless, in January 2017 a total of 295 trade unions were registered in Latvia (although only 274 were registered as active), which actually shows an increase from, for example, 2014, when only 216 trade unions were registered (with 197 being active).
  • Such an increase has not been reflected in trade union density, however. According to an OECD report, in 2015 around only 14% of Latvian workers belonged to a trade union, positioning Latvia among the European countries with the lowest rate of official employee representation across establishments of all sizes. This number is smaller than that reported by LBAS in 2008 (15%). The OECD has identified the low union coverage in the private sector, along with the lack of a tradition of strong collective bargaining, as being among the key challenges facing the country.
  • The trade unions in Latvia have traditionally been organised along industry lines; however, in recent years these lines have become more blurred. The old sectoral divisions between LBAS members no longer exist, while more employers’ organisations have appeared in each sector. Sectoral representativeness has become unclear and complicated, and it is hard for trade unions to find partners for sectoral-level collective bargaining.
  • The largest unions are those in the public or quasi-public sectors (i.e. state-owned companies). The largest union is LIZDA (Latvijas Izglītības un zinātnes darbinieku aordbiedrība), which represents 30,220 members in the education and science sector, and is itself a confederation of 1,248 member trade unions. It claims to represent 54% of education and science employees. LIZDA is followed by the railway and transport workers union, LDzSA (Latvijas Dzelzceļnieku un satiksmes nozares arodbiedrība), with more than 11,000 members; then LVSADA (Latvijas Veselības un sociālās aprūpes darbinieku aordbiedrība), for the health and social work sector, with more than 10,000 members; and finally LAKRS (Latvijas Sabiedrisko darbinieku un transporta pakalpojumu arodbiedrība), for public services and transport employees, with more than 7,000 members. For the most part, the unions are made up internally of local organisations at individual workplaces.
  • Collective bargaining can take place at the industry, regional and company/organisational level. However, collective agreements at industry level are rare and the thresholds for extending these agreements are relatively high (either 50% of employees in a given sector or of employers representing at least 60% of the turnover of the entire sector). In practice this option to conclude a universally applicable collective agreement has so far only been used in the railway sector, but negotiations are currently underway to conclude another one for the building sector. This process, however, has been hampered by problems concerning the application of the representativeness criteria, which require the employers to be affiliated to a single organisation and do not offer the possibility of calculating representativeness based on the inclusion of both the employers’ organisation and individual employers who wish to join the agreement. Plans are underway to remedy this gap via legislation.
  • Overall, other than regional agreements with regional authorities, in practice there are only industry-level and company/organisation-level agreements, and the company level is clearly predominant. The reported figures on collective bargaining coverage differ hugely: according to official figures it is relatively high, at 34% of all employees; however, the union estimate is much lower, standing at 16%. Some reports have put the coverage figure at around 20%. There are, however, no negotiations for large parts of the private sector and there is no reliable information on the use of collective agreements in SMEs, which account for more than 99% of all enterprises.
  • The National Tripartite Co-operation Council(NTSP) provides a framework for discussions between the employers, the trade unions and the government. The council discusses labour legislation and can play an important consultative role in developing the Latvian system of industrial relations; it is also consulted about the minimum wage. At the same time, the NTSP’s role was weakened during the financial crisis when, in the name of efficiency and economic recovery, the usual steps in the process were often side-stepped or only formally carried out. Overall, the social dialogue was drastically weakened during the crisis and has yet to regain influence.
  • Latvian legislation defines the issues that collective agreements can cover, including the organisation of work, pay, health and safety, and internal work procedures. In practice, agreements usually cover pay and bonuses, holidays, and working time, as well as issues related to dismissals, particularly collective redundancies. According to data from 2009, the main issues regulated in collective agreements are working time (89% of collective agreements), additional pay (20.3%), and work-life balance or gender policies (18.7%), while 32% of the agreements deal with the compensation of trade union activities.
  • The Labour Law provides a comparatively high degree of protection for trade union members. Both union representatives and ordinary members can only be dismissed with prior written consent of the relevant trade union. If the union does not give its consent, the employer can take the issue to court, which in practice means a two-year long process. The law also states that the performance of the duties of an employee representative – either in the capacity of a trade union representative or an authorised workplace representative – should not be the basis for dismissal or some other form of discrimination.
  • There are several significant particularities of the Latvian trade union system. First, there are no separate trade unions for employees in management positions; both a head teacher and a teacher, for example, will usually belong to the same union. Second, there are sectoral exclusions from the right to collective bargaining for the armed forces and civil servants. Furthermore, certain matters are excluded from the scope of the negotiations in the public sector, such as wages and working hours. In the public administration sector, which is characterised by a high degree of regulation and is the only sector where the trade unions are relatively strong, there is generally little substance to the collective bargaining process. Finally, the parity between the social partners, in terms of representation, has deteriorated over the years as a result of the amalgamation of trade unions and the springing up of new employers’ organisations.
  • On the employers’ side there is only one confederation, the Employer’s Confederation of Latvia (LDDK). Membership of the LDDK has increased over the years. In 2005 the LDDK reported that it united 22 employers’ associations and enterprises with 50 employees, while by 2012 the figure had already risen to 68. The LDDK, which in 2005 represented employers of about 26% of the country’s workforce, and 37% in 2012, is a member of the NTSP, representing the employers’ side. Nevertheless, a large number of enterprises across sectors remain outside the LDDK system and are not involved in collective bargaining. This poses a very significant challenge to the trade unions for finding a partner for collective bargaining.
  • Employee representation at the workplace functions either through unions or through elected workplace representatives. Trade union representatives and authorised workplace representatives are both legally considered to be ‘employee representatives’, and both have essentially the same tasks and duties. Both are involved in information and consultation procedures and both may be involved in collective bargaining, although in the latter case preference is given to trade unions and negotiations with authorised employee representatives take place only where employees are not union members. However, with low levels of union membership and reluctance among employees to elect representatives, most private sector workplaces have no employee representation at all.
  • There is no possibility of establishing works councils. Only the European Works Councils’ (EWC) regulatory mechanism applies; however, so far not one EWC has been established in Latvia. Nevertheless, the EWC database shows that in January 2017 there were 322 companies with an EWC that have operations in Latvia, and there are 21 seats for the Latvian representatives in 20 foreign EWCs (in one EWC Latvians have two seats).
  • There is no system of board-level representation for employees. Recently, however, in the framework of more extensive consultations about options for greater employee involvement in the financial management of the company, one of the obstacles identified by the trade unions has been the lack of workers’ representation on the boards of Latvian companies. The position of the Latvian trade unions is that such involvement would only work to the benefit of the employees if it is accompanied by employee representation in the decision-making processes of the company (e.g. via board-level representation).