Dear client and cooperation partner,
On 22 June 2010 the Lithuanian Parliament adopted amendments to the Labour Code. The main aim of the amendments is to make employment regulation more flexible and to help businesses adapt to changing market conditions.
New opportunities for fixed term employment contracts
The Labour Code amendments allow fixed term employment contracts for newly established positions. Previously, fixed term employment contracts for any permanent positions were banned. However, companies that wish to use this possibility must also comply with the following requirements:
- Fixed term employment contracts are allowed only for new jobs, i.e. those established after 1 August 2010.
- The number of fixed term employment contracts cannot exceed 50% of all positions in the company.
- Fixed term employment contracts cannot be made with former employees dismissed by mutual termination agreement or on the employer’s initiative without employee fault.
- Fixed-term employment contracts for newly established positions may be up to a maximum of two years ending no later than 31 July 2012.
More flexible working time regulation
The Labour Code amendments set more flexible overtime conditions. From now on employers can assign overtime work by written consent or request of an employee, irrespective of the reasons for the overtime work. The employer must enter the information on the employee’s working time in the pay statement and separately indicate the amount of overtime work.
The amended Labour Code should also improve the possibility to introduce a summary working time regime. Employers will be able to opt for summary recording of working time “in case of necessity”, rather than only in cases of uninterrupted work. Furthermore, under a summary working time regime, work schedules may be announced one week (rather than two weeks) in advance. On the other hand, the amended Labour Code provides additional guarantees for employees working under a summary working time regime. If these employees work overtime during accounting period and are given extra time off in lieu, these rest periods will have to be paid by average working remuneration. If an employee has fewer working hours during an accounting period compared to what is laid down for their job category, the difference between actual working time and prescribed working time will be payable as idle time.
The amendments allow a clause in the collective agreement that work schedules are announced at least one week in advance (instead of the statutory notice period of two weeks). Besides, employers no longer need coordinate with employee representatives in recording the working time of employees who handle their working time at their own discretion.
The Labour Code amendments revise the term for giving notice to terminate employment. Where the employee gives notice, 14 business days notice replaces the former 14 calendar days. The same period will also apply to those employees, who became entitled to retirement while working at the current employer. During the probation period an employment contract may be terminated by notifying the other party three working days (rather than calendar days) in advance.
Other amendments protect the interests of employees, for example if an employer fails to fulfil its obligations, the employee may suspend the employment contract up to three months. In that case the employer must pay the employee monthly compensation amounting to at least one minimum salary. Further, the period, during which an employee may apply to the court in case the pre-court dispute procedure was not satisfactory,, has been extended up to one month.
Changes also appear in strike-related regulation – a possibility for sectoral strikes is established. Finally, the amended Labour Code introduces a new type of employment contract – distance employment. Under a distance employment contract an employee may perform working duties in places other than the employer’s office.
The amendments take effect as from 1 August 2010.
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