Lithuania: new Labour Code

Lithuania: New Labour Code brings employer-favourable novelties to individual employment relations.

As of 1 January 2017 a new Lithuanian Labour Code (the “new LC”) comes into force. The new LC together with supporting legal acts forms one part of the new social model. The new LC aims to improve regulation of labour relations. It contains many new provisions providing favourable conditions for employers in their individual relations with employees:
New types of employment contract. The new LC broadens the scope of employment contracts by providing nine different types of possible contract: open term, fixed-term employment contracts, contracts for temporary work, apprenticeship contracts, employment contracts for an undetermined volume of work, project work, job sharing, work for several employees and for seasonal work. Employment contracts for an undetermined volume of work caused much discussion. Under these contracts an employee will have to work at least eight hours a month but the working time will not be determined in the contract – the employee will have to come to work on the employer’s call.
Simplified dismissals. Under the new LC an employer will have to notify employees one month prior to the day of dismissal where an employee is dismissed on the initiative of the employer but without fault on the employee’s part. The notice period is only two weeks if the employee has worked for the firm for less than one year. In contrast, employees who have a child under 14 years of age and those who have less than five years left before retirement will have to be notified two months before dismissal while employees who have less than two years until retirement or employees that are disabled will have to be notified at least three months before dismissal.
Smaller severance pay. As of 1 January 2017 the maximum amount of severance pay will amount to two average salaries of an employee who has worked for the firm for at least one year. For employment agreements lasting less than one year, the employee will receive 50 per cent of one average salary.
Shorter annual leave. Employees working a five day working week will be entitled to 20 working days of annual leave. For those working a six day working week, annual leave of 24 working days will be granted.
More overtime allowed. As of next year the maximum amount of overtime work increases to 180 hours. Employees and employers will be free to agree on even more hours of overtime work in collective agreements.

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