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Collective Bargaining

The Labour Code, which came into effect in 2017, has had a significant impact on collective bargaining, which is now exclusively reserved to unions, and may, in some cases, only benefit union members. Bargaining is much more prevalent in the public than the private sector and covers some 15% of the total workforce.

The framework

 

The new Labour Code, which came into effect on 1 July 2017, introduced important changes to the structure of collective bargaining in Lithuania.[1] From that date, it has been possible to reach collective agreements at five separate levels: national (cross industry); territorial; industry (production, service or professional); employer (company or organisation); and workplace level (where this is specified in a collective agreement at national, industry or employer level). Before the 2017 Labour Code came into effect, collective bargaining was only possible at four levels – workplace level bargaining has now been added.

 

Where there is a potential clash between agreements at industry level or territorial level and agreements at employer level, the higher-level agreement (industry or territorial) applies, unless it specifically permits agreements at employer level to deviate from its terms. This is a variation from the previous Labour Code which stated that, in the case of a clash, the terms most favourable to the employee would always apply.

 

It is also possible for the government to extend all or part of the terms of a higher-level agreement (whether signed at national, industry or territorial level) to all employees concerned rather than those employed by the employers who have signed the agreement. However, although this possibility exists in the new Labour Code, as it did in the previous version, it has never been used.

 

Of greater practical importance is the fact that the 2017 Labour Code changes which employees are covered by the agreements. Previously, collective agreements applied automatically to all the employees of the organisation which had signed the agreement. Under the new arrangements they initially only apply to members of the signatory union or unions. Agreements signed at employer or workplace level can be extended to all the employees of that employer or in that workplace, but only if the unions and employer signing the agreement agree that it should be extended in this way, and this is agreed at meeting of all the employee representatives. If a union has signed an agreement with an employer but there are no union members (This is possible – see section Who negotiates?) the agreement applies to all employees provided that the employee representatives have agreed to this at a meeting.

 

The new Labour Code also requires that all collective agreements should be registered with the Ministry of Social Security and Labour.[2] (There was previously no obligation to register company level agreements.) This register shows that on 8 April 2020 there were 297 valid collective agreements.[3]

 

The analysis by the ministry shows that the vast majority of these agreements (95%) were at employer level – 282 out of 297, but there were also 12 industry-level agreements, two territorial agreements and one at national level. There were no workplace-level agreements.

 

The national level agreement was signed by four national confederations (LPSK, Solidarumas, Sandrauga and RJPS) plus the public sector federation NPPSS, on one side, and the Lithuanian government, on the other, in July 2019. It covered almost 200,000 public sector workers. As well as improving pay levels for all workers, the agreement provides additional benefits which only trade unionists receive: two extra days’ leave and up to 10 days’ paid study leave.[4]   

 

The 12 industry-level agreements signed cover workers in education and science, health, social services, culture, environmental protection, social insurance, border protection and the prison service and justice, as well as the railways, furniture and wood processing and road haulage.  

 

In total the Ministry of Social Security and Labour estimates that 70% of the agreements on the registry are concluded in the public sector and that total collective bargaining coverage is 15%. Although no comparable estimates were made in the past, it seems likely that the coverage of collective agreements has increased. This is certainly the view of the labour inspectorate (VDI), which commented in its annual report on 2018 that the number of collective agreements had more than doubled between 2017 and 2018.[5]

 

It is unclear how many agreements have used the possibility of limiting negotiated improvements to union members. However, some, like the national agreement in the public sector, have included preferential treatment for union members. An example is the agreement in the social services sector in September 2019, where unionised employees received higher pay.[6]

 

As well as a framework for collective bargaining, there is also a highly structured system of consultation between unions, employers and government, with the Tripartite Commission of the Republic of Lithuania (LRTT) at the top and several specialist commissions, covering issues like health and safety and training underneath. The three main union confederations are represented on these councils, and, in the LRTT, they, like the employers and the government, have seven seats – three for LPSK, and two each for Sandrauga and Solidarumas. The Tripartite Council has played a key role in developing the country’s system of industrial relations and makes proposals to the government on the minimum wage.

 

Who negotiates and when?

 

At national, industry and territorial level, negotiations take place between one or more union organisations and one or more employers’ associations.

 

At employer or workplace level, negotiations are between the employer and the union operating in that employer or workplace, or with a joint union representation if there are several unions. Where there is no union presence at an employer, the employees may, at a general meeting, authorise a union to negotiate on their behalf.  

 

The union monopoly on negotiations at employer and workplace level is a change introduced by the new Labour Code. Previously works councils were able to negotiate if there was no union.

 

The new Labour Code provides that agreements will be valid for a maximum period of four years, unless something else is agreed. The details of the agreements included in the register of the Ministry of Social Security and Labour indicate that significant number are of unlimited duration, with many also signed for four years. Where they are for a fixed term, negotiations should start two months before the termination of the old agreement.

 

The subject of the negotiations

 

The Labour Code allows collective agreements to cover a wide range of issues, with employer or workplace level agreements covering more topics than higher-level agreements.

 

Agreements at national, industry or territorial level cover pay and pay-related issues,  health and safety, employment training and retraining and procedural issues, as well as what is described as “other working, social and economic issues important to the parties.

 

At employer and workplace level, agreements can cover the details of employment contracts, pay, working and rest time, health and safety, the mutual provision of information, information and consultation procedures, although without reducing the rights of the works council (see separate section), important working, social and economic issues and procedural issues linked to the signing, validity and length of the agreement.

 

Collective agreements can always improve on the legal minimum standards, but, with some exceptions, agreements at national, industry or territorial level can also set inferior conditions, provided the agreement, in the words of the Labour Code, “strikes a balance between the interests of the employer and the employees”. The exceptions, where collective agreements cannot worsen the legal standards, cover maximum working time and minimum rest periods, minimum wages, the conclusion or termination of an employment contract, health and safety, gender equality and non-discrimination.

 

Lithuania has a national minimum wage which is set by the government following recommendations from the Tripartite Commission (LRTT), and after taking the development of the national economy into account. The recommendations from the Tripartite Commission are presented annually, normally by 15 June.

[1] Lithuania: will new legislation increase the role of social dialogue and collective bargaining? by

Inga Blažienė, Nerijus Kasiliauskas and Ramunė Guobaitė-Kirslienė, in Collective bargaining in Europe: towards an endgame, edited by Torsten Müller, Kurt Vandaele and Jeremy Waddington, ETUI, 2019

[2] Register of collective agreements https://socmin.lrv.lt/lt/paslaugos/administracines-paslaugos/kolektyviniu-sutarciu-registras-ir-kolektyviniu-sutarciu-registravimo-tvarka  (Accessed 08.04.2020)

[3] Email to Labour Research Department from the Ministry of Social Security and Labour of the Republic of Lithuania (2020-04-08 Nr. (33.5 E-52) SD-1937)) 8 April 2020

[4] https://www.lpsk.lt/naujienos/2020-metu-nacionaline-kolektyvine-sutartis/ (Accessed 08.04.2020)

[5] VDI Annual Report 2018, May 2019 https://www.vdi.lt/PdfUploads/DSS_tendencijos_2013_2018.pdf (Accessed 08.04.2020)

[6] Lithuania: Latest developments in working life Q3 2019 by Inga Blaziene, Eurofound, November 2019 https://www.eurofound.europa.eu/publications/article/2019/lithuania-latest-developments-in-working-life-q3-2019  (Accessed 08.04.2020)

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.