Lithuania: Non-payment of wages the most common reason for labour disputes

The State Labour Inspectorate (SLI) has published the semi-annual report on the activities of the Labour Dispute Commissions (LDC) for the first half of 2022. Most of the requests to the LDC concerned workers’ remuneration.

The LDC is a governmental, pre-judicial body to which the parties to a labour dispute can turn. According to the published information, the LDC issued a total of 6 157 (in the second half of 2021, the number was still more than 6 800) decisions on requests submitted by claimants, of which 4 647 (about 75%) decisions concerned remuneration disputes.

These figures are enormous, especially considering that remuneration is one of the essential terms of the employment contract and the salary to be paid per month (monthly salary) or per hour (hourly rate) must be compulsorily stipulated in the contract (Art. 140(1) Labour Code). To this end, the employer must provide the employee, before the start of work, not only with information on their salary, but also on the components of the salary (which must be stated separately), the deadlines and the procedure for payment of the salary (Art. 44(1)(9) Labour Code).

If the salary and other work-related benefits (holiday pay, compensation for holidays not taken, etc.) are not paid on time, the employer is obliged to pay damages. The amount of the statutory penalty depends on whether the arrears arose during or after the employment relationship.

If the employer is at fault for delay in payment to the employee before termination of the employment relationship, interest on arrears is charged. The current interest rate is 0.08%.

If the employment relationship ends and the employer is late in paying the salary through no fault of the employee, the employer must pay liquidated damages equal to the employee’s average monthly salary multiplied by the number of months of delay, up to a maximum of six.

The employee can turn to the LDC to resolve a labour dispute within three months from the time they became aware or should have become aware of a violation of their rights. In this case, it is important for the employer to know that this time limit can be extended by a decision of the LDC if it considers the reasons for the delay to be serious.

If the time limit is not extended by the LDC’s decision, the employee may file a claim with a court within one month of the LDC’s decision in order to enforce their claims before an ordinary court.

Labour Code of the Republic of Lithuania

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