Dear clients and cooperation partners,
On 26 June 2012, the Lithuanian Parliament adopted amendments to Section XIX of the Lithuanian Labour Code (the Labour Code), to take effect on 1 January 2013. The procedure for labour disputes will change, with the mandatory pre-court resolution stage moved from internal company Labour Dispute Commissions to external Labour Dispute Commissions near local offices of the State Labour Inspectorate (SLI).
Pre-court resolution of labour disputes by SLI Commissions is expected to be more effective, thus reducing the workload of the courts as well as the administrative burden on business.
Resolution of labour disputes to move to External Labour Disputes Commissions
Currently the Labour Code requires an employer to form a Company Labour Disputes Commission for mandatory pre-court hearing of employee claims raised in the course of employment.
From 1 January 2013 this duty will be removed from employers. Instead, Labour Disputes Commissions will operate in local SLI offices. Commissions will consist of three members – an SLI officer (the chair of the Labour Disputes Commission), an employee representative and an employer representative – both to be appointed from a list provided by local trade unions and employer organisations, though their appointment will not depend on the choice of the parties or their membership of an organisation. In this way individual labour disputes will be governed by principles of social partnership. Parties to a dispute will be able to claim replacement of Commission members on grounds set out in the Civil Procedure Code.
Another novelty is the employer’s right to initiate a dispute in the Labour Disputes Commission and to appeal its decision to the court.
The parties will have a right to appeal a decision of the Labour Disputes Commission to a court of first instance within one month from the date of the decision. A decision of the Labour Disputes Commission will come into force after the deadline for appeal is over except for cases requiring urgent execution. Decisions of the Commission will qualify for urgent execution if they award an employee unpaid salary of up to one month.
Disputes involving change of contractual employment conditions to be subject to the mandatory pre-court procedure
Under the current provisions of the Labour Code, employee claims relating to change of contractual conditions, such as salary or working duties, lie directly to the court without referring to a Labour Disputes Commission. However, from 1 January 2013 these claims will also be examined by the SLI Labour Disputes Commission at the mandatory pre-court stage.
Conditions of compensating illegal dismissal to change
The Labour Code currently entitles the court to award an employee average salary for the period between the day of dismissal and the effective court decision date if termination is found to be illegal, irrespective of whether the employee managed to conclude a new employment contract before the dispute is over.
From 1 January 2013 conditions of compensation will be more favourable to an employer in disputes over employment termination. If an illegally dismissed employee is hired by a new employer, the court will award only the balance of their former salary and current salary.