The new Labour Code provides employees with the possibility

      to be represented in collective relations not only by trade unions but also by other employees’ representatives.Article 19 of the Code states that the representation and protection of the rights and interests of employees in labour relations

      may be implemented by trade unions, however in cases when there is no trade union functioning in an enterprise, establishment or organisation, or when the meeting of the employees’

      collective has not delegated the function of representation and protection of employees to the trade union of a

      certain branch of economic activity, the employees will be represented by the work council elected by secret vote in the general meeting of the collective of employees. By virtue of Article 49 of the Code, collective agreements can be of three levels:

      1) collective agreement on the state level (national);

      2) collective agreement concluded on the branch (production,

      services, professional) or territorial (municipal, district) level;

      3) collective agreement on the level of an enterprise (establishment, organisation) or its structural division.

      The parties to the national collective agreement shall be central (republican) trade union organisations and employers’ organisations, and the parties to the collective agreement

      of a certain branch shall be respective organisations of trade unions of a certain industrial branch (production, services,

      profession) and employers’ organisations. The parties to the

      territorial collective agreement shall be the organisations of trade unions functioning on such territory (municipality, district) and employers’ organisations. The national, branch and territorial collective agree- LIDEIKA, PETRAUSKAS, VALIÛNAS AND PARTNERS ments are applied in enterprises the employers whereof were

      the members of employers’ associations or joined such associations after signing of the agreement. If the provisions of a

      branch or territorial collective agreement are significant to a respective branch of production or profession, the Minister

      of Social Security and Labour may expand the sphere of application of the branch or territory collective agreement or

      certain provisions of such agreement stating that such agreement shall be applied to the entire branch, profession, sphere of services or a certain territory, if such request has been submitted by one or several employees or employers’ organisations participating in the branch or territorial collective agreement. The collective agreement of an enterprise shall be a written arrangement among the employer and the collective of employees of such enterprise concerning the conditions of work, remuneration for work and other social and economic conditions. Though Article 59 of the Labour Code states that the collective agreement of an enterprise is concluded in all types of enterprises, establishments and organisations, this

      does not mean that entering into a collective agreement is obligatory. An employer must start negotiations with the

      employees’ representatives, who has submitted requirements or suggestions, however the collective negotiations can end in one of the following ways: entering into the collective agreement,

      execution of the protocols of disagreements, or withdrawal

      from negotiations (Article 48 of the Code).

      The Labour Code abolishes one kind of disciplinary actions - severe reprimand, and provides a non-exhaustive list of rude violations of office duties for which a disciplinary action - dismissal from works – can be applied (until now the

      list has been finite). A rude violation of office duties shall be deemed a breach of discipline by which the provisions of laws and other legal acts, regulating the work of an employee, are directly infringed, or the office duties or the established work order are otherwise roughly violated. The non-exhaustive list

      of rude violations of office duties presented in the Code is as follows:

      1) impermissible behaviour with visitors or clients or other actions that directly impair the constitutional rights of people;

      2) disclosure of state, business, commercial or technological secrets or their divulgence to a competing enterprise;

      3) participation in activities which under laws, other regulatory legal acts, rules of work order, provisions of collective

      agreements or employment contracts are inconsistent with work duties;

      4) abuse of position in order to receive an unlawful income for oneself or other persons or due to other personal inducements, as well as arbitrary conduct or bureaucracy;

      5) infringement of equal rights of men and women or sexual harassment in respect of colleagues, subordinates or clients;

      6) refusal to provide information when laws, other regulatory legal acts or work regulations oblige to provide it, or

      provision of knowingly misleading information in such cases;

      7) act having the indications of theft, swindle, property embezzlement,

      illegal acceptance of remuneration, although no criminal or administrative liability has been imposed on an

      employee;

      8) the fact that an employee was under the influence of alcohol, drugs or toxic substances at work, except for cases when the intoxication was caused by the production processes in an enterprise;

      9) absence from work without justifiable reasons the whole day (shift);

      10) refusal to undergo inspection of one’s health when such inspection is obligatory for an employee;

      11) other violations, by which roughly breaches work order.

      The Labour Code provides a broader list of types of employment contracts - from currently

      concluded fixed-term employment contracts, indefinite duration employment contracts and

       contracts for seasonal works to employment contracts for temporary, extra work, outwork

       and rendering of certain personal services (e.g. as a nurse, driver etc., when an employer is a natural person).

       However, by virtue of the Labour Code it shall not be permitted to enter into a fixedterm employment contract

       if the work is of permanent nature, except for the cases when laws or collective agreements prescribe otherwise.

      In comparison with the existing procedure for termination of an employment contract set forth in the Law on Employment

       Contract, the Labour Code has many novelties. The Labour Code does not provide a detailed list of the grounds for

       termination of an employment contract which is established in the presently valid Law on Employment Contract.

      The Labour Code does not enumerate the said grounds, it only contains a provision that upon an employer's initiative,

       absent the fault of an employee, an employment contract may be terminated only due to important reasons which can

       be only the circumstances related to the employee's qualification, professional competence, his/her behaviour at work.

       An employment contract may also be terminated for economic, technological reasons and structural changes of the work

       place or similar important reasons. However, the Code presents a list of reasons which cannot serve as a legal ground for

       termination of an employment contract. Such circumstances include: membership in a trade union or participation in a

       trade-unionist activity after business hours and, upon an employers' consent, during business hours; performance of

       the functions of employees' representative at present or in the past; participation in proceedings against an employer,

       accused for infringements of laws, other regulatory acts or collective agreement, as well as appeal to administrative bodies;

       sex, sexual orientation, race, nationality, language, background, citizenship and social status, religion, marital or family status,

       beliefs or views, belonging to political parties and public organisations; age, except for cases when an employee has already

       acquired the right to the entire old-age pension or is receiving such old-age pension; absence from work, when an employee

       performs, in cases provided by laws, military or other duties and obligations of a citizen of the Republic of Lithuania. Part 3 of

       Article 130 of the Code, based on the provisions of the International Labour Organisation Convention No 158 on the Termination

       of Employment, establishes a condition that within the term of notice on termination of employment contract an employer must

       give an employee time, releasing from performance of working duties, for search of a new work, which may be not less than ten

       percent of the work time norm applied for an employee during a notice term. Article 135 of the Code provides a list of employees

       who have priority right to retain the work place when the number of employees is reduced. They include the employees who have

       been injured or fallen ill with professional disease in the work place; who alone maintain children (foster children) under sixteen

       years of age or other family members recognised the first or second group invalids; who have not less than ten-year work record

       in that work place; who have not more than three years left until the old-age pension and for whom such right is established in

       a collective agreement. According to the new Labour Code an employer, when dismissing an employee upon an employer's initiative

       without an employee's fault, must give an employee at least 2- month written notice, to employees of certain categories

       - 4- month written notice. Part 4 of Article 129 of the Labour Code provides for a very strict limitation stating that an

       employment contract with employees for whom until the right to receive the whole old-age pension not more than five years

       are left, with persons under eighteen years of age, disabled persons, employees who have children under fourteen years of

       age, may beLIDEIKA, PETRAUSKAS, VALIUNAS AND PARTNERS terminated only in exclusive cases when the leaving of such employee

       at work would substantially impair the interests of the employer. The principle of payment of severance payments is also changed

       in the Labour Code. Absent the fault of an employee, the amount of a severance pay depends on the employee's work record in

       an enterprise. Upon termination of the employment contract upon the employer's initiative (with notice), without an employee's

       fault, under the new Labour Code the severance payment in the amount of his average monthly remuneration would be paid to the

       dismissed employee, taking into account the continuous work record in such work place: (1) up to twelve months - in the amount of

       one monthly remuneration; (2) from twelve to thirty six months - in the amount of two average monthly wages; (3) from thirty six to

       sixty months - in the amount of three average monthly wages; (4) from sixty to one hundred and twenty months - in the amount of

      four average monthly wages; (5) from one hundred and twenty to two hundred and forty months - in the amount of five average monthly

       wages; (6) over two hundred and forty months - in the amount of six average monthly wages. The new Code also separately

      regulates the termination of an employment contract without notice (which also includes the termination of an employment contract

       through an employee's fault). An employment contract without notice must be terminated in the following cases: 1) by court decision

       in effect, or upon a court judgement in effect under which an employee is punished by a penalty disabling him/her to continue in work;

       2) when an employee is deprived, in the procedure prescribed by laws, of special rights to perform a certain type of work; 3) upon

       request of bodies or officials authorised by laws; 4) when due to the conclusion of medical commission or disablement diagnosing

       commission an employee can not occupy a certain position or fulfil certain duties; 5) when an employee from fourteen to sixteen years

       of age, one of the parents or a child's representative under law, or a doctor who takes care of a child's health, or school in which

       a child studies, require to terminate an employment contract; 6) upon liquidation of an employer, if according to laws another

       person has not been obliged to fulfil such employer's work obligations. An employer is entitled to terminate an employment contract

       without prior notice to an employee in the following cases: 1) when an employee is negligently performing his working duties or

       has otherwise breached discipline, if previously at least once throughout the last twelve months disciplinary penalties have been

       imposed on him/her; 2) when an employee one time roughly breaches his/her working duties (see comments regarding disciplinary

       liability hereunder). Article 138 of the Labour Code (Limitations on Termination of an Employment Contract while Reorganising the

       Company) stipulates that the change of the owner of an enterprise, establishment, organisation, their subordination, founder or

       name, merger, splitting, share-out of an enterprise, establishment or organisation, or joining of such enterprise, establishment or

       organisation to another enterprise, establishment or organisation - may not be deemed a lawful reason to terminate labour relations.

       This wording of Article 138 of the Labour Code does not differ from Article 32 of the previously valid Law on Employment Contract,

       and clearly fails to comply with the 12 March 2001 EC Directive on the approximation of the laws of the Member States relating to

       the safeguarding of employees rights in the event of transfers of undertakings, businesses

      The Code provides for the employees’ rights to information and consultation. According to Article 47 of the Labour

      Code, information and consultation embrace information about the present and future activity of an enterprise and its

      economic and financial status, information about the present status, structure of labour relations and possible developments in occupational respect, information about the intended measures to be used in cases of possible reduction of the number of employees, other information related to labour relations and the activity of the enterprise if such information is not deemed a state, business or commercial secret. The conditions and procedure of provision of information and consultations shall be established in the collective agreement. For more information please contact: Ramûnas Petravièius, tel. 681 888

      Employees must indemnify the loss incurred through their fault to the employer, usually within the limits of three average monthly remuneration (until now - within the limits of one monthly wage), due to:

      1) loss, reduction of value of, or damage (injury) of property;

      2) over-usage of materials;

      3) fines and compensations which an employer had to pay through an employees’ fault;

      4) expenses incurred due to damaged things;

      5) improper protection of material valuables;

      6) improper accounting of material and monetary valuables;

      7) the fact that no measures have been taken to prevent the issue of defective production, seizure of material or monetary valuables;

      8) breach of other work regulations, office regulations and other instructions.

      Pursuant to Article 225 of the Labour Code, agreement on full material liability can be concluded with employees whose work is directly related to protection, acceptance, delivery,

      sale, purchase, transportation of material values, and in respect of the means handed over to an employee for usage

      at work. The list of such works and office duties shall be established in a collective agreement. In cases when due to jointly

      performed work it is impossible to separate the liability of individual employees, an agreement on full material liability can be entered into with a group of employees. In such event,

      the loss will be indemnified by all employees who have signed such agreement, and a share of each of them in indemnification of loss will be established proportionately to the length

      of time spend by him/her on work, during which the loss was incurred, unless the agreement provides otherwise.

      Agreements on full material liability may not be concluded with employees under eighteen years of age. Employees will

      also carry full liability if the loss is incurred by a wilful or criminal act, under the influence of alcohol, or by losing tools, clothes or protective measures.

      The Labour Code provides, that according to the Civil Code, an employer must indemnify the loss incurred due to

      mutilation of an employee or any other injury of his/her health, or in case of his/her death, or his/her professional

      disease, if such employee was not insured against accidents at work or covered by social insurance against professional diseases, as well as due to damage, destruction or loss of an

      employee’s property, or impair of his/her or other persons’ property interests.

      The indemnification of non-pecuniary damage shall be established by virtue of the Civil Code.

      On 4 June 2002 the Parliament adopted the new Labour Code (announced on 14 June 2002, Official Gazette “Valstybës

      þinios” No 64) which will come into effect as of 1 January 2003. Although the Code is new, it does not contain many real novelties. The legal regulation of an employment contract, being a key part of labour law, has changed fundamentally,

      the norms of material liability have also been considerably corrected, the rules have been set regarding the applicability

      of foreign law in labour relations. However, the new Code contains no drastic differences in regulation of collective labour relations, the procedure for settlement of collective disputes has actually remained analogous, only minor

      changes have been introduced in the legal regulation of vacation and other rest time, remuneration for work and disciplinary liability. The Labour Code does not regulate the activities of trade unions, because these issues are regulated by a special law.

      The new Labour Code defines the concept of remuneration for work, establishes that an equal remuneration for work will be paid to men and women for equal work. Remuneration for work will be paid in money. The procedure for payment for overtime, night work, work on rest days and holidays as well as an idle time through no fault of an employee, has not changed. However, the Code does not provide any longer for

      fixed extra pays in case of deviations from normal working conditions - i.e. if the work environment is harmful or very

      harmful, the Labour Code (Article 192) only provides that in such event an increased remuneration, as compared to the work under normal environment, should be paid, while at present the extra pays accounting for not less than one and a half tariff rate or monthly remuneration in unhealthy work environment, and not less than double amount extra pay - in very unhealthy work environment. Part 3 of Article 120 of the Labour Code provides that the conditions of remuneration for work without an employee’s written consent may be changed by an employer only if the remuneration for work of a certain branch of economy, enterprise or category of employees is changed by

      laws, resolutions of the Government or pursuant to a collective agreement.

      Article 197 of the Code provides that in cases when the scope of employee’s work is increased as compared to the

      established norm, the remuneration for work will be increased proportionately.

      According to Part 5 of Article 150 of the Code, the work of administration officials, exceeding the established duration

      of work, shall not be considered as overtime; the list ofLIDEIKA, PETRAUSKAS, VALIÛNAS AND PARTNERS such office duties shall be determined in collective agreements

      or internal work regulations.