President signs Labour Code into Law: here are the main changes

Dalia Grybauskaitė
DELFI / Kiril Čachovskij

The specialists of COBALT Labour law practice group point out the major changes provided by the new Labour Code:

• Fixed-term employment contracts may also be concluded for works of permanent nature, and it is not obligatory to establish it under a collective agreement. The number of fixed-term contracts may not exceed 20% in the company.

• Employment contract without determined extent – a new form of a contract when the term for the performance of the work is not established in advance, however an employee shall undertake to perform the work under the employer‘s invitation. Payment shall be made according to factual work duration. For the month when the employee has not been invited to work the payment for 8 hours of work shall be paid.

• Contract for project work – a fixed-term contract, where under an employee shall undertake to perform his work function in order to achieve particular results of a project working under a work schedule established at his own discretion within or outside the working place. The duration of such contract may not exceed 2 years (for a new employee) and 5 years (upon amendment of a contract).

• Contract for shared position – 2 employees may agree with the employer regarding the sharing of one position not exceeding maximum working time established for one employee. In the employment contracts concluded with such employees it shall be obligatory to indicate the type of the employment contract, the identity and the contact details of the other employee, the established working time of the employee (the number of working hours per week).

• Employment contract with several employers – contract may indicate two or more employers instead of one for the performance of the same working function. The contract may provide that the working time of the employee is not divided for each employer separately when the employee performs the tasks of several employers at the same time, however the contract should establish the working time paid by each employer.

• Reduced severance pay for dismissed employees – maximum severance pay shall not exceed 2 average wages, irrespective of length of service, instead of previous 6 average wages.

• Reduced period of notice – when the employee’s length of service does not exceed 1 year, the period of notice shall be 2 weeks, when the length of service is 1 year or more – 1 month. The period shall be doubled for the employees who are raising a child under 14 years of age and who will be entitled to the old-age pension in not more than five years, the period of notice shall be tripled when the employee will be entitled to the old-age pension in not more than two years and for a disabled persons. At present the period of notice may reach up to four months.

• Simplified termination of employment contract is established. An employer shall have the right to terminate an employment contract when the working functions performed by an employee become excess due to the changes made to work organization or due to any other reasons related to the employer’s activity. Furthermore, the contract may be terminated when the employee fails to achieve the results set out for him.

• Maximum overtime increased up to 180 hours per year for one employee, at present the overtime may not exceed 120 hours per year. Overtime may be compensated by granting longer leave.

• Changed duration of annual leave – from now on employees shall be granted 20 working-day leave (instead of 28 calendar days), one installment thereof may not be shorter than 10 working days. An employee working 6 days per week shall be granted 24 working-day annual leave.

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