Discussion over new Labour Code continues

The extensive changes to the Labour Code are aimed at liberalizing the labour market and attracting investment, the government says, while unions accuse its authors of reducing employment security and disproportionally privileging employers.

President Dalia Grybauskaitė has backed the latter position when she vetoed the amendments in early July and proposed an extensive list of changes to the law. She said the new Labour Code failed to properly protect workers’ rights and take into account their interests.

After emerging from more than an hour-long meeting at the headquarters of the Lithuanian Confederation of Labour Unions, PM Butkevičius told reporters that all sides agreed that the new Labour Code should come into force in the beginning of 2017, as previously planned. This means that the differences will have to be sorted out in autumn, despite the planned general elections in October.

“The government will present new proposals. And so will labour unions and other social partners. We are hoping to harmonize our positions by early September and sign an agreement about planned corrections, so that during plenary discussions at the Seimas in autumn there are no new proposals that haven’t been agreed upon which would delay [the Code’s] final adoption and implementation,” Butkevičius says.

He would not say, however, whether the Seimas, parliament, would reject the president’s veto.

Some of the proposed changes were listed in a statement circulated by the the prime minister’s office, which sounded similar to the president’s own suggestions.

Among other things, the proposal would retain the principle that employees are the weaker party in disputes with employers. The government has also proposed raising severance pay for certain groups of employees and concessions to workers with children.

The controversial “zero-hour contracts” – employment that does not guarantee working hours and, consequently, pay – would also be scrapped, according to the proposal.

Artūras Černiauskas, the president of the Confederation of Labour Unions, said he and the prime minister “exchanged opinions about what could be adjusted in the new Labour Code”.

He said the amendments passed in June “put hired employees and their unions on a weaker ground”. “There needs to be a better balance between employers’ and employees’ interests in the Code,” according to Černiauskas.

Meanwhile about 200 business companies released a petition on Thursday, urging MPs to reject the president’s veto and pass the Labour Code amendments without any changes.

“Due to international migration and negative natural population growth, the situation in the country’s labour market is perceptibly deteriorating. The new Labour Code, passed by the Seimas, is not perfect, but it is an acceptable compromise that could put Lithuania on the track of progress,” says the petition which was initiated by the Investors Forum.

After vetoing the amendments, President Grybauskaitė presented over 20 corrections, including scrapping zero-hour contracts, increasing severance packages and limiting employers’ ability to offer fixed-term contracts for continuous work.

The parliament can either reject Grybauskaitė’s veto or accept it in full, but not choose and pick. To do so, however, requires at least 71 votes in the 141-seat Seimas.