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Lithuanian employers hail new labour bill, trade unionists frown

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Linas Jegelevičius

The enactment of Lithuania’s new Labour Code has been put off for six months, but, now, seemingly all roadblocks have been removed to enacting it from July 1 after the country’s Trilateral Council, consisting of Labour Unions, Government and employer organizations, agreed on the final redaction of the bill.

Proposals to amend bill will be rejected

Following the Council’s meeting early this week, Prime Minister Saulius Skvernelis insisted confidently that, with a green light from the body, the Lithuanian Parliament is set to approve the legislation, as any proposals on the parliamentary floor to amend to it will be rejected under an agreement made by the ruling coalition of the Lithuanian Farmers and Greens Union and the Social Democratic Party.

«The key thing is that the code will be in place by July 1 after being postponed and amended. If there are attempts to register various amendments at the parliament, the coalition has decided that they should be rejected,» the prime minister told journalists after the ruling coalition’s meeting at the parliament on Tuesday, April 11.

But Audrius Jurgelevičius, the chairman of the Lithuanian Education Institutions’ Trade Union, is not convinced it will be the way the PM wants.

«I am pretty sure the ruling coalition will want to tweak the bill. In favour of employers, not (in favour) the employee,» he told to BNN. «This was obvious to me at the Trilateral Council.»

New types of labour agreements

How to tersely sum up the changes to the main labour law?

In brief, they will liberalise substantially the existing labour relations- ease hiring as well as dismissing the worker.

«A set of new types of labour agreements is about to go into the practical application soon. Although generally seen as alleviation for the employers, the law, however, constitutes a range of safeguards for the employee, too,» says Eglė Butienė, consultant at Lithuania’s Agricultural Consultation Service.

«Evidently, the new law introduces many new forms of labour contracts. For example, one of them relates to work of indefinite volume, while others have to do with project-like work or sharing the workplace. It also profusely stipulates appearance of fixed-term labour agreements for permanent work among other things,» the expert said.

Fixed-labour contracts up to 5 years

Fixed-term labour contracts can be signed for as long as five years. Before, the employer needed to give the worker a two-month notification prior the decision on layoff.

But with the new Labour Code in place, it will suffice to bring it to the worker’s attention within five days under a fixed-term labour agreement, provided that the worker has been with the employer from one to three years. The period of handing the pink slip increases up to 10 days if the worker’s work experience is over three years.

The about to go into effect law also envisions some significant changes as far as durance of the standard workweek is concerned. Although 40 hours’ workweek remains embedded as the standard, but the new Labour Code also allows increasing a workweek up to 60 hours.

Some workers may like the possibility of flexible work hours that the document now guarantees.

«The provision will let better cater to the workers’ individual, social and family-related interests,» some expert say.

Shorter notification on dismissal

Another novelty is that the minimum wage can be applied only for unqualified work with the law in effect.

From July 1 on, the employer, in most cases, will be obliged to settle with the worker no later than within 10 days after the calendar month is over.

One of the most contentious provisions of the new Labour law is the shortened term of notification when it comes to sacking. Under a work contract of unlimited duration, the employer will have to warn the worker, with the work experience of more than one year, just one month before the cut instead of two months as until now. The notification period comes just at a mere two weeks if the work experience is less than one year. Twicelonger layoff-warning terms will be applied for the workers raising a child under 14 years and for the seniors who have less than five years till retirement left. The employer will be responsible to give a three-month notice to venerable age workers who have less than two years until retirement.

The current Labour Codex foresees the term of notification from one to six months to hand the pink slip. The severance package has also slimmed in the new redaction.

Interestingly, the new Code also allows the employer terminate agreement with a worker without giving him or her an explanation.When it comes to holidays, the usual until now holidays of 28 calendar days will be replaced with the ones of 20 workdays.

Labour Councils at larger firms

The new Labour Code introduces some new formations – Labour Councils. To set up them, it will be mandatory,under the law,in firms with 20 or more workers. Experts say its functions will be akin to those by the trade unions. Importantly, if there is a trade union at the workplace, then there will be obligation to set up such council.

Some of the new Code’s provisions are believed to affect thousands of Lithuanians. For example, those whose wage is bigger than the country’s two average wages combined, i.e. 1645 euro before taxes, may be legislatively bound to haggle with the employer for certain social guarantees.

Although some trade unionists lambasted the provision as discriminatory and demanded that only earners of three average wages were subject to mployer-employee negotiations, but the Trilateral Union has stood up for the former variant.

Praising the decision, Andrius Romanovkis, a member of Lithuania’s Business Confederation Presidium, argued that people with the income of 1645 euros are in a way better situation than theothers and that they can defend their interests with the employer.

However, Jurgelevičius, of the Union, reiterated that the bill «mostly» serves interests of the employer, not the employee.

«The imbalance is evident to me. Unfortunately. Some of the employees I know see the bill as an opportunity to «corner up» their employees and drive out from the workplace eventually,»he claimed.

Some hurdles still lie

Although parties managed to reach accord on the bulk of hot issues, disagreements, however, remain as to how, for example, accommodate the employee organisations’ striving to embed legislative right to organise strikes or, say, announce lockouts amid a work dispute.

Some of the issues regarding fixed-term labour agreements and, especially the bill’s provisions on collective labour agreement, still need to be ironed out, emphasised A. Jurgelevičius.

Meanwhile, the country’s organisations  representing employers hope that, with the bill about to hit the parliamentarian floor for the crucial voting, the ruling parties will stand by their position given at the Trilateral Council and  will reject any MP’s any proposition to usher in last-minute corrections to it.

Employers want to sigh off

«We indeed hope that the Lithuanian parliamentarians and the heads of state will keep their promise (to vote for the bill in its entirety), so we will be able to calmly await the start of its enactment, July 1. I’ve heard the pledges (that the Trilateral Council decisions) from prime minister Saulius Skvernelis that the Parliament will stand by what has been agreed, yet no one can be sure, I guess, that the process will be smooth,» Danas Arlauskas, general director of the  Lithuanian Business Employers’ Confederation, told Lithuanian media.

Labour Code turned to be costly for SD

Lithuanian parliament (Seimas) endorsed a new Labour Code back in September 2017, rejecting President Dalia Grybauskaitė’s veto and giving the green light for new regulations on labor relations to come into effect as of the inception of 2017.

The-then Lithuanian PM Algirdas Butkevičius hailed the decision, claiming it was leading toward «one of the most important reforms after gaining independence.»

However, with the bill subject to immense criticism, the successor Government decided to postpone the enactment of the Code for six months. Many analysts believe that the Butkevičius-led Social Democrats’fiasco in general election last October was partly due to the exuberance to pull through the labor relations reform.

Ref: 020/111.111.111.4910


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