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Amendments to Labour Code Adopted in Lithuania
23.09.2009
Just as the new Employment Contracts Act was adopted in Estonia, several amendments to the Lithuanian Labour Code were adopted on 22 July 2009, entering into force on 1 August 2009.
The amended Code provides better protection for employees working on a fixed-term contract. It is forbidden to apply less favourable working conditions to such employees than to those working on a permanent contract basis or to limit their access to training opportunities or benefits. Yet, employees working on a fixed-term contract can, to a certain extent, be subjected to terms different from those stipulated in law if such terms have been agreed on in a collective agreement. For instance, according to the Labour Code an employer must pay an employee compensation equal to the sum the employee would have been entitled to until the end of the contract term if a fixed-term employment contract is terminated prematurely on the initiative of the employer; however, the parties can stipulate in a collective agreement that in such a case the employee will only receive compensation of one month's average salary. The Estonian Employment Contracts Act contains a similar provision, stating that in the case of a lay-off of an employee working on a fixed-term contract the employer must pay compensation to the employee to an extent corresponding to the wages that the employee would have been entitled to until the expiry of the contract term; however, agreeing differently in a collective agreement is not permitted in Estonia.
It is also interesting to note that the Lithuanian Labour Code allows an employer to terminate an employment contract with an employee having five or less years until entitlement to old age pension if continuation of employment would materially damage the interests of the employer. The parties can also agree in a collective agreement that the respective term is three years or less until entitlement to old age pension. The Estonian Employment Contracts Act, by contrast, does not permit the cancellation of an employment contract with an employee due to the employee's age or attainment of retirement age.
The Lithuanian Labour Code also clarifies the concept of illegal work. In addition to working without an employment contract, illegal work is taken to mean cases where an employer fails to notify the State Social Insurance Fund Board of employment of an individual.
