New Posting of Workers Directive: Implementation in Lithuania

An overview of the amendments to the Labour Code coming into force on 30 July 2020 to implement Directive 2018/957/EU.

While the amendment to the Law on the Posting of Workers triggered heated debates in Germany and was adopted by the Bundesrat (upper house of Parliament) on 3 July 2020 virtually only at the last minute before the implementation deadline (30 July 2020), amendments to Articles 108 and 109 of the Labour Code to implement the Posting of Workers Directive will also come into force in Lithuania punctually on 30 July 2020.

Accordingly, an employee posted to Lithuania from abroad will in future also be subject to provisions of national (cross-industry), territorial and sectoral collective agreements.

Previously, only the minimum legal provisions of mandatory law were applicable to the employment relationship, which covered working and rest periods, minimum leave, occupational health and safety and prohibition of discrimination in the workplace.

Moreover, workers posted to Lithuania had to be paid the Lithuanian minimum wage, including compensation for overtime, night work and work on public holidays.

This catalogue of working conditions is now being significantly extended. In the future, workers must no longer be paid only the minimum wage, but the remuneration provided for in national, territorial and sectoral collective agreements.

In addition, the conditions of accommodation for workers and allowances (transport, travel and other costs) provided for in national, territorial and sectoral collective agreements are also applicable to posted workers.

Daily allowances and other secondment allowances ‒ except for allowances to cover actual travel, accommodation and subsistence costs ‒ will be treated as part of remuneration. Where the daily allowance or other secondment allowances are not separated from the actual travel, accommodation and subsistence costs, allowances paid to posted workers will be deemed to cover the actual travel, accommodation and subsistence costs of the secondment.

If the actual duration of a posting exceeds 12 months, then posted employees will in the future be subject to all Lithuanian regulations applicable to an employment relationship (including collective agreements as noted above), irrespective of the actual law applicable to the employment contract or employment relationship, with the exception of provisions on concluding and terminating employment contracts, and non-competition clauses. The period of 12 months may be extended to a maximum of 18 months by notification to the supervisory body. If a posted employee is replaced by another posted employee performing the same work at the same workplace, the posting periods of both employees will be added up for the purpose of calculating this period.

Compared to the impact that implementing Directive 2018/957/EU will have on Lithuanian companies posting workers to Germany, the reverse case should at least be less problematic. Compared to Germany, collective agreements are much less common and their structure is less complex. Nevertheless, there should always be an intensive examination of the applicable working and economic conditions in advance, which will probably make postings more complicated administratively.

Law No XIII-2888 of 7 May 2020 on Amendments to Articles 108, 109 and the Annex to the Labour Code of the Republic of Lithuania (TAR, 2020, No 2020-10789)

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