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Lithuanian lawmakers override the presidential veto of the Labour Code

2016-09-16

On 14 September the Seimas voted to override President Dalia Grybauskaitė’s veto of the new Labour Code. Our lawyers at COBALT Labour Law practice group provide below the highlights of the major changes introduced by the new Labour Code:

  • Fixed-term employment contracts may also be concluded for works of permanent nature, without there being an obligation to establish this under a collective agreement. The number of fixed-term contracts may not exceed 20% of the total number of employment contracts in the company.
  • Zero-hour type contract is a new type of contract with no hours of work scheduled in advance; however, the employee undertakes to be available for work when the employer so requires. Under this work arrangement employees are paid for actual hours worked. If no hours are offered during the month, the employer must pay at least for 8 hours.
  • Project-based contract is a fixed-term contract under which an employee undertakes to perform his job functions in order to achieve particular results set for the specific project, working under a self-determined schedule at or outside the workplace. The duration of such contract may not exceed two years (for a new contract) and five years (for an amended contract).
  • Job share contract is a work arrangement under which two employees work part-time to share one full-time position. Job share contracts will have to contain such required details as the type of employment contract, the identity and contact details of the second employee, the duration of working time of the employee (number of working hours per week).
  • Co-employment contract is a contract under which a person is employed by two or more employers to perform the same job function. The contract may provide that the working time of the employee who simultaneously performs tasks for several employers is not divided among the employers; however, the contract has to establish the working time paid by each employer.
  • Lower severance pay upon dismissal.A maximum severance pay will not exceed two average wages, irrespective of length of service, instead of previous 6 average wages.
  • Shorter notice period. When the employee’s length of service does not exceed one year, notice period of two weeks applies, when the length of service is one year or more, notice period will be one month. A notice period will be doubled for employees raising a child under 14 years of age and those who will be entitled to the old-age pension in not more than five years, and a notice period will be tripled for employees who will become entitled to the old-age pension in not more than two years and for disabled persons. At present, a notice period may reach up to four months.
  • Simplified termination of employment contract. An employer will have the right to terminate an employment contract when the role becomes redundant due to changes in work organization or any other reasons related to the employer’s activity. Furthermore, the contract may be terminated when the employee fails to achieve individual performance results.
  • Maximum overtime has increased up to180 hours per year for one employee, at present overtime may not exceed 120 hours per year. Overtime may be compensated by providing a longer period of leave.
  • Annual leave entitlement has changed. From now on, employees will be entitled to annual leave of 20 working days 20 (instead of 28 calendar days), one continuous period of leave being not shorter than 10 working days. An employee working 6 days per week will be entitled to annual leave of 24 working days.

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