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Board-level Representation

There is no employee representation at board level in the private sector in Lithuania, but they are present in some state-owned enterprises.

In the private sector, a quoted public limited company (AB) can have both a supervisory and management board, while a limited company (UAB) has a single-tier board. In neither case is there a requirement for employees to be represented at board level.

However, as a result of the changes introduced in the 2017 Labour Code and new legislation on state and municipal enterprises[1], employees have the right to choose some members of boards of state and municipal companies, where boards are established.  (State and municipal enterprises only have single-tier boards.)The founding documents (the articles) of these companies determine precisely how many board members and employee representatives there should be, but there must be at least five board members and at least one of these must be an employee representative. Employee representatives must also make up at least one fifth of the board members.

The 2017 Labour Code states that it is “persons carrying out employee representation at the employer level” who choose the board members representing the employees.[2] This will normally be the works council, unless the employee-level union represents more than a third of the workforce, in which case the employer-level union takes on all the functions assigned to the works council.[3]

Employee representatives appointed to management or supervisory boards have the same rights and duties as other members. Board-level employee representatives serve for period specified in the articles of the company. The legislation provides for a four-year term of office. However, they may be removed from office by a decision of the employee representative body that appointed them, although that body must immediately appoint replacements.

In practice, by June 2020 there were six state enterprises with employee representation at board level and a seventh, covering Lithuanian airports where the board was being chosen. The six companies cover air traffic control, a state register centre, the body registering vehicles and driving licences, a centralised state property management company, a state timber and logging company and a company decommissioning a nuclear plant. In most cases there is a single employee representative on a five-person board, but in the vehicle and driver registration organisation, Regitra, which has just over 500 employees,[4] there are two employee members on the ten-person board, and in the timber and logging company, Valstybinių miškų urėdija (VMU), there are two out of seven.

In employment terms, VMU seems the largest of the state enterprises with board-level employee representation, with 2,753 employees in 2020.[5] (The decommissioning company had 1,901 in 2019.[6]) The two employee representatives on the VMU board are the chair of the Forest Management Division's employees' trade union  and a member of the council and board of the Lithuanian Forest and Forest Industry Trade Union Federation. Both are women.[7]

As well as the right, in state and municipal enterprises, to appoint board-level representatives, employee representatives may participate in the meetings of the management or supervisory board in the private sector, in certain circumstances. However, this is only when issues relating to employees’ terms of employment are being discussed, and this depends on a collective agreement or some other form of agreement being reached between the employer and employee representatives. It is not automatic.[8]

 

[1] Lietuvos Respublikos valstybės ir savivaldybės įmonių įstatymas article 10 (2) (3) https://www.e-tar.lt/portal/lt/legalAct/TAR.29FB2C8807FE/asr (Accessed 23.06.2020)

[2] Labour Code article 211 https://e-seimas.lrs.lt/rs/legalact/TAD/da9eea30a61211e8aa33fe8f0fea665f/format/ISO_PDF/ (Accessed 23.06.2020)

[3] Labour Code article 169 (2)

[4] It had 535 in December 2019, see annual report page 33 https://www.regitra.lt/lt/imone/veikla-2/veiklos-ataskaitos (Accessed 23.06.2020)

[5] See wage reports first quarter of 2020 https://www.vivmu.lt/lt/ataskaitos/ (Accessed 23.06.2020)

[6] See statistics https://www.iae.lt/apie-imone/statistika/62 (Accessed 23.06.2020)

[7] See board members https://www.vivmu.lt/lt/valdyba/ (Accessed 23.06.2020)

[8] Labour Code article 212

L. Fulton (2021) National Industrial Relations, an update (2019-2021). Labour Research Department and ETUI (online publication). Online publication available at http://www.worker-participation.eu/National-Industrial-Relations.