TEN Q&A on labour law in Europe: Lithuania

1. What types of employment contracts are recognised in Lithuania?

Types of employment contracts are recognized in Lithuania:

• 1) employment contract of indefinite duration;
• 2) a fixed-term employment contract;
• 3) temporary employment contract;
• 4) apprenticeship employment contract;
• 5) project work contract;
• 6) workplace sharing employment contract;
• 7) employment contracts for several employers;
• 8) seasonal employment contract.

If the parties to the employment contract do not agree on the type of employment contract, the employment contract shall be deemed to be concluded for an indefinite period.

2. What are the minimum and maximum terms for which a fixed-term employment contract can be concluded in Lithuania?

A fixed-term employment contract is an employment contract concluded for a certain period of time or for the performance of certain works. Terminating the term of an employment contract may be set before a certain calendar date, for a certain period of days, weeks, months or years, until the performance of a certain task or the occurrence, change or termination of certain circumstances. A fixed-term employment contract becomes indefinite when the circumstances that led to the definition of the term of the contract cease to exist during the period of the employment relationship. Fixed-term employment contracts for permanent jobs may not exceed twenty percent of the total number of employment contracts concluded by the employer.

The maximum duration of a fixed-term employment contract, as well as of successive fixed-term employment contracts concluded with the same employee for the same job function, shall be two years, unless the employee is recruited to a temporary absence. Successive fixed-term employment contracts are employment contracts granted for a maximum period of two months. If the fixed-term contract is fixed or extended for more than two years, as well as successive fixed-term contracts concluded with the same employee for the same job, unless the employee is recruited to a temporary absence, the total duration of which is more than two years, such a contract shall be deemed to be for an indefinite period. In this case, the periods between fixed-term employment contracts are included in the duration of the employee’s employment relationship with the employer, but do not have to be paid. The total duration of successive fixed-term employment contracts with the same employee for different work functions may not exceed five years. Violation of this requirement renders such an employment contract indefinite, and periods between fixed-term employment contracts are included in the duration of the employee’s employment relationship with the employer, but are not remunerated. The possibility of concluding fixed-term employment contracts, the maximum term of which may not exceed five years, with elected or appointed employees, employees of creative professions and researchers, employees appointed by collegial electoral bodies or other employees for the protection of the public interest shall be established by other laws. Such agreements may be concluded or extended on the basis established by law.

The minimum term of a fixed-term employment contract is not provided for in the Labour Code of the Republic of Lithuania.

3. How can a contract of employment be terminated in Lithuania?

In Lithuania, the employment contract expires:

1. upon termination of the employment contract by agreement of the parties;
2. upon termination of the employment contract at the initiative of one of the parties;
3. upon termination of the employment contract at the will of the employer;
4. upon termination of the employment contract without the will of the parties;
5. upon death of a party to an employment contract – a natural person;
6. in accordance with the procedure established by the Minister of Social Security and Labor of the Republic of Lithuania, when it is impossible to determine the location of the employer – a natural person or representatives of the employer;
7. on other grounds established in the Labour Code and other laws.

4. What are the applicable notice periods, and what determines their length?

The time limits for giving notice of termination of employment vary depending on the type of employment contract terminated, the party initiating the employment contract and the grounds on which the employment contract is terminated.

An employment contract of indefinite duration and a fixed-term employment contract may be terminated by a written statement of the employee notifying the employer not later than twenty calendar days in advance. The employee has the right to withdraw the application to terminate the employment contract no later than within three working days from the date of its submission. He may subsequently withdraw the application only with the consent of the employer. The employee’s application terminates the employment contract at the end of the notice period and the employer must formalise the termination of the employment contract no later than the last working day.

The employment contract may be terminated by a written statement of the employee giving at least five working days’ notice to the employer, provided that:

1) the employee’s downtime lasts for more than thirty consecutive days through no fault of the employee or if it lasts for more than forty-five days in the last twelve months;

2) the employee is not paid his / her full salary (monthly salary) for two consecutive months or more or if the employer fails to fulfil its obligations established by the labour law norms regulating the safety and health of employees for more than two consecutive months;

3) the employee is unable to perform his / her job properly due to illness or disability or due to caring at home for a family member (child, father (adoptive parent, caregiver )), mother (mother-in-law, caregiver), husband, wife) who is in a need of a special permanent care or in a special need for constant care (assistance);

4) an employee working under an employment contract of indefinite duration has reached the age of retirement and has acquired the right to a full retirement pension while working for that employer.

The employer has the right to terminate an employment contract of indefinite or fixed term before the term for the following reasons:

1) the work function performed by the employee becomes excessive for the employer due to changes in the organisation of work or other reasons related to the activities of the employer;

2) the employee does not achieve the agreed work results in accordance with the shortcomings of his / her work indicated in writing to the employee and the jointly prepared performance improvement plan covering a period of at least two months, and the results of the implementation of this plan are unsatisfactory;

3) the employee refuses to work with the changes necessary or additional conditions of the employment contract or to change the type of working time regime or place of work;

4) the employee does not agree with the continuity of the employment relationship in the event of the transfer of the business or part thereof;

5) the court or the body of the employer makes a decision due to which the employer terminates.

5. Is it possible to employ employees as teleworkers in Lithuania, and are there any particular regulations that apply (differentiating from other regulations)?

During the pandemic, it was possible to recruit workers remotely. The Labour Code stipulates that teleworking is provided at the request of the employee or by agreement of the parties. The employer, taking into account the peculiarities of work organisation, assesses whether it can provide the opportunity to work remotely. The work functions performed by the employee, their specifics, etc. are evaluated. When working remotely, the employee is paid the salary stipulated in the employment contract. An employee may work remotely both continuously and several times a week, or for several hours a day or a week, depending on the agreement of the parties to the employment contract. In the absence of full-time teleworking, it could be agreed to perform certain functions remotely. In order to properly organise work in the company, institution or organisation, the parties to the employment contract may set a specific time for the employee to perform work functions remotely, for example, during which hours the employee will perform his work remotely and at a permanent place. In the case of teleworking, the requirements of the workplace (if any) shall be set out in writing, the work equipment, the arrangements for its provision, the rules for the use of work equipment shall be provided, and the workplace department, division or responsible person shall be accountable to the employer. in accordance with the procedure laid down. If an employee incurs additional costs related to his work, acquisition, installation and use of work equipment while working remotely, they must be reimbursed. Compensation size and its payment conditions are set by the parties of the labour contract.

6. What are the rights for women who become pregnant during their employment contract, and are they protected from being dismissed?

Pregnant, recently given birth, breastfeeding workers must be provided with safe and healthy working conditions.

The Government has approved a description of the working conditions of pregnant workers and workers who have recently given birth or are breastfeeding. a list of dangerous working conditions, harmful factors and substances for pregnant workers and workers who have recently given birth or are breastfeeding.

If hazardous or noxious factors cannot be eliminated, the employer shall implement measures to improve working conditions so that the pregnant worker, worker who has recently given birth or is breastfeeding is no longer exposed to such factors. If such an effect cannot be eliminated after changing the working conditions, the employer must transfer such employee (with her consent) to another job (workplace) in the same company, institution or organisation.

Employees who have transferred to another job in the same company, institution, organisation shall be paid at least the salary received before the transfer to another job.

If it is not possible to transfer a pregnant worker to another job (workplace) that does not adversely affect her or the unborn child’s health, the pregnant worker (with her consent) is granted maternity leave and is paid a monthly salary.

If it is not possible to transfer a worker who has recently given birth or breastfeeding after maternity leave to another job (workplace) which does not adversely affect her or the baby’s health, such workers (with her consent) shall be granted parental leave until the child reaches the age of one year, and statutory maternity social insurance benefits are paid during that period.

Pregnant workers who have recently given birth or are breastfeeding are not allowed to work overtime without their consent.

Pregnant workers, workers who have recently given birth and workers who are breastfeeding may be assigned to duty, work at night, rest days and holidays only on secondment with their consent. If such workers do not agree to work at night or provide a certificate that such work would endanger their safety and health, they shall be transferred to work during the day. If, for objective reasons, it is not possible to transfer such workers to full-time work, they shall be granted leave before the start of maternity leave or parental leave until the child reaches the age of one year. During the leave before the beginning of the maternity leave, the monthly salary due to the employees is paid.

Breastfeeding workers shall be allowed to breastfeed for at least half an hour at least every three hours, in addition to a general break for rest and meals. At the request of the employee, breaks for breastfeeding may be combined or added to a break for rest and meals or moved to the end of the working day, reducing the working day accordingly. Breastfeeding breaks are paid according to the employee’s salary.

Where a pregnant worker, a worker who has recently given birth or is breastfeeding is required to undergo a medical examination, it must be dismissed and paid for that period if a medical examination is required during work.

7. What types of paid days-off are the employees entitled to in Lithuania?

There are the following types of holidays in Lithuania:

1. annual;
2. purposive;
3. extended, additional.

During the leave period, the employee is left with a job (position). If an employee is left with a salary in accordance with the norms of labour law or an employment contract, he or she shall be paid in accordance with the terms and procedure for payment of remuneration, except for vacation pay paid to the employee for annual leave.

Employees are entitled to annual leave (paid-off holidays) of at least twenty working days (if working five days a week) or at least twenty-four working days (if working six days a week)paid by the employer. If the number of working days per week is less or different, the employee must be granted a leave of at least four weeks. Holidays are calculated on working days. Holidays are not included in the holiday duration.

Purposive paid-off leave (paid by the Social security institution):

1. pregnancy and childbirth;
2. paternity;
3. to take care of a child.

The employer shall ensure that the worker has the right to return to the same or an equivalent job (post) after the targeted leave under conditions no less favourable than the previous ones, including pay, and to enjoy all the better conditions, including the right, to which he would have been entitled, if it had worked.

For employees under the age of eighteen, employees raising a child (under 14) alone or a disabled child (under 18), and disabled workers are granted twenty-five working days of annual leave (if working five days a week) or thirty working days of annual leave (if working six days a week).

The employer and the employee may agree on other paid-off leaves, such as education, etc.

8. Is it possible to include a non-competition clause in the employment contract, and what are the grounds for concluding a valid non-competition agreement?

Yes, the parties to the employment contract may agree that the employee will not perform certain employment activities with another employer for a certain period of time, nor will he engage in independent commercial or productive activities related to the job functions if these activities are in direct competition with the employer’s activities.

This agreement may be concluded during the term of the employment contract and / or at the end of the employment contract. Upon termination of the employment contract, this agreement shall remain in force for a maximum period of two years after the termination of the employment contract. Non-compete agreements are only possible with employees who have special knowledge or skills that can be applied in a company, institution, organisation that competes with the employer, or when they become self-employed and thus harm the employer. The non-compete agreement must define the employee’s prohibited employment or professional activity, the amount of non-compete compensation for the employee, the non-compete area and the term of the non-compete agreement.

During the period of non-competition with the employer, the employee must be paid compensation in the amount of at least forty percent of the employee’s average salary. An employee who violates a non-compete agreement must terminate a competing employment or professional activity for the agreed period of the non-compete agreement and repay the compensation received and compensate the employer for the damage caused.

The employee has the right to terminate the non-compete agreement unilaterally when the employer is more than two months late in paying the non-compete compensation or part of it.

9. Is the employer obliged to pay compensation for the period of validity of a non-competition clause/agreement after the termination of employment?

During the period of non-competition with the employer, the employee must be paid compensation in the amount of at least forty percent of the employee’s average salary. Preliminary agreements for penalties in excess of the non-compete compensation received by the employee for three months are not valid. The employee has the right to unilaterally terminate the non-compete agreement when the employer is more than two months late in paying the non-compete compensation or part of it.

10. What happens to employees if their employer goes bankrupt in Lithuania, and are they entitled to severance pay?

Dismissal of employees due to the bankruptcy of the employer is not subject to the provisions of the Labour Code concerning the application of the notice periods for termination of employment and the restrictions on termination of employment established by the Labour Code. Employees made redundant as a result of the employer’s bankruptcy are paid a severance pay equal to two times their average earnings and, if their employment relationship lasts for less than one year, a severance pay equal to half their average earnings.

11. Are there any courts specially appointed for the purpose of dealing with labour law matters in Lithuania?

No.

12. In the event that an employee is a debtor in enforcement proceedings in Lithuania, to what extent is it possible for a bailiff to seize remuneration

The bailiff may deduct 30% of the salary provided it does not exceed 1 minimum monthly salary (in the year 2022 it is equal to 730 Eur) of an employee and 50 % of the excess of 1 minimum monthly salary.

For instance, if the salary of the employee is 500 Eur, the bailiff will collect 30 % of it – 150 Eur. But if the salary is 1000 Eur, the bailiff will collect 30 % from 730 Eur + 50 % from 270 Eur = 354 Eur.