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Labour reforms in Lithuania: background summary

  • From 2003 to 2017 labour and employment relations in Lithuania were regulated by the Labour Code of the Republic of Lithuania No IX-926, adopted on 4 June 2002. The provisions of the Code apply to both public and private sectors (some specific provisions, applicable solely to the civil service are regulated by the Law on Civil Service of the Republic of Lithuania). The new Labour Code built on the experience of the EEC countries, the provisions of the conventions and recommendations of the ILO, and the European Social Charter (revised), and the majority of the provisions of the EU directives were transposed. The Code consists of three parts: general provisions, collective labour relations and rules governing individual labour relations.
  • There were numerous discussions in the last decade among the social partners aimed at liberalising the existing Labour Code, but most of the employers’ initiatives were successfully opposed by the trade unions. Finally, at the beginning of 2014, the government launched the ‘new social model’ in Lithuania. This included the drafting of regulatory legislation in the area of labour law, employment and social insurance.
  • The purpose of the new Labour Code, drafted within the framework of the social model, was to make labour relations more flexible and provide greater guarantees for employees. However, the model and the new draft Labour Code, prepared by experts, did not satisfy the trade unions. According to them, the model sought to fundamentally amend the legal provisions regulating labour relations and social issues, which would reduce considerably the existing social guarantees for employees and have negative effects on working conditions. For their part, employers feared that the initially innovative ideas of the model would be watered down after the many proposals and amendments from unions and members of parliament.
  • After almost three years of discussions and reflection by scientists, politicians and the social partners, the new legislation was adopted in the middle of 2016. The legal package including the new Labour Code is due to enter into force in July 2017. One of the key new aspects of the labour legislation is more flexible employment relations: more liberal dismissal conditions, a wider variety of employment contracts allowing for greater flexibility, more liberal usage of overtime, etc.
  • Issues on which a common position was not reached, including during the final negotiations by the social partners preceding the entry into force of the new legislation in the middle of 2017, included the organisation of strikes or lockouts, additional guarantees for employee representatives, fixed-term employment contracts, work schedules, collective agreements, conflicts of interest, etc.
  • Other important changes in the labour regulations during the last decade include amendments to the Law on Trade Unions, the liberalisation of the legislation regulating strikes (see chapter on ‘Strikes’), changes in the regulation of collective labour disputes and the introduction of a new system of individual labour dispute resolution.
  • Amendments to the Law on Trade Unions were adopted in 2013. For the first time in the history of independent trade unions in Lithuania, they stipulated that membership of trade unions was open not just to workers with employment contracts but to others, too. Prior to the changes, the trade unions had not been able to represent the unemployed, pensioners and others without employment contracts.
  • During the last decade some changes in the regulation of collective labour disputes were introduced. In 2008 the mediation institution was introduced as a body for labour dispute resolution, and in 2014 the third-party court previously used for labour dispute resolution was abolished (because in practice it was never used by parties to collective disputes). According to the existing legislation, collective labour disputes are heard by a conciliation commission, the labour arbitration body or, at the request of one of the parties to the dispute, a mediator.
  • The system of individual labour disputes in Lithuania was reorganised in 2012: resolution of these disputes was shifted from the courts to Tripartite Labour Dispute Commissions (TLDCs) attached to the State Labour Inspectorate. Before the establishment of TLDCs, conflicts between employers and employees had usually been settled in general courts. These procedures were protracted and expensive; in individual cases, it was often six months or more before the court issued a verdict. Evidence suggests that TLDCs have significantly accelerated the dispute resolution process.
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