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How to hire and fire employees in Lithuania according to Labour Law: Maintaining relationship with the employee

19 February 2015
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labour agreements in Latvia, Lithuania, EstoniaChanges To The Contract

In the event of changes in production, its scope, technology or labour organisation, as well as in other cases of production necessity, an employer is entitled to change the conditions of an employment contract. If an employee does not agree to work under the changed working conditions, he may be dismissed by the Employer subject to the dismissal procedure set out in the employment contract. The essential conditions of an employment contract such as the employee’s place of work (enterprise, establishment, organisation, structural subdivision, etc.), or job functions, may be changed with the prior written consent of the employee. An employer may change remuneration for work without the written consent of an employee but only in the case when remuneration for a specific sector of employee is changed by laws, Government resolutions or under the collective agreement. In the event of changes in remuneration, wages cannot be reduced without the written consent of an employee.


labour agreements in Latvia, Lithuania, EstoniaChange In Ownership Of The Business

Changes in the ownership of an enterprise, establishment or organisation, subordination, change of name, any merger or division forming a new enterprise, establishment or organisation, may not be a legitimate reason to terminate employment relations. When there is a change in ownership of a business (except a change merely in the shareholding ownership), all employees are normally transferred to the new employer on the same terms and conditions.


labour agreements in Latvia, Lithuania, EstoniaSocial Security Contributions

Employers and employees are required to make social security contributions. During employment the employer will be liable for paying the following tax:

  • social insurance contributions counted from the gross salaries at the rate of 30.98 %,
  • payment to the guarantee fund counted from the gross salaries of 0.2%.

Employees are entitled to pay:

  • 15% of personal income tax,
  • obligatory insurance tax of 6%,
  • 3% for the social insurance.

Employers are required to contribute towards allowances payable to employees during their employment. These allowances include sick pay, maternity pay and paternity pay etc.


labour agreements in Latvia, Lithuania, EstoniaAccidents At Work

Safety and health at work means that an employer must adopt preventive measures in order to ensure employees are safe at work. It is the responsibility of an employer to ensure safety and health at work. Taking into account the size of an enterprise and the risks to employees, the employer must establish or hire a certified occupational safety and health service or performs this function himself. The Ministry of Social Security and Labour the Ministry of Health, in compliance with the Constitution of the Republic of Lithuania, Labour Code, other laws, Government resolutions and other regulatory acts, implement the state policy in the sphere of employee health and safety. The State Labour Inspectorate ensures that employers comply with employee health and safety requirements. The functions, rights and responsibility of the State Labour Inspectorate is established by the Law on State Labour Inspectorate. The employee who has lost his functional capacity as a result of an accident at work or occupational disease which resulted in the loss of income will be compensated for loss of income in accordance with the Law on Social Insurance against Accidents at Work and Occupational Diseases and other laws. If the injured employee is not covered by this social insurance, the income lost and medical aid and treatment costs as well as the expenses related to the victim’s social, medical and professional rehabilitation will be compensated by the employer in accordance with the procedure established by the Civil Code.


labour agreements in Latvia, Lithuania, EstoniaDiscipline And Grievance

The discipline and grievance procedure applicable to employees is defined by work regulations. These regulations are approved by the employer subject to the approval of the employee representative.


labour agreements in Latvia, Lithuania, EstoniaHarassment/Discrimination/Equal pay

Employees are protected from discrimination on grounds of sex, age, sexual orientation, marital status, race, religion or belief, disability and etc. Discrimination may occur before the employment relationship commences (for example in advertising the job), during the employment (for example in failing to promote), on termination or even after the employment has ended (for example in writing the reference). When applying the work classification system for determining the wage, the same criteria must be equally applied to both men and women, and the system must be developed in such a way so as to avoid discrimination on the grounds of sex. The Office of Equal Opportunities Ombudsman, which is an independent state institution, is one of the key institutions within the equal opportunities and gender equality machinery. It takes overall responsibility for the supervision and implementation of the Law on Equal Opportunities for Women and Men (1998) and the Law of Equal Treatment (2005) in Lithuania. The Ombudsman investigates individual complaints on the grounds of gender, age, racial or ethnic origin, religion and beliefs, disability, sexual orientation, language, social status. The Ombudsman submits recommendations and proposals to Parliament, governmental institutions on the priorities of gender equality policy, which includes recommendations on amendments to relevant legislation.


labour agreements in Latvia, Lithuania, EstoniaCompulsory Training Obligations

There are no compulsory training obligations for employees generally, but obviously some trades/professions will impose their own standards/expectations.


labour agreements in Latvia, Lithuania, EstoniaOffsetting Earnings

It is possible for employers to offset earnings against employee's debts. However, the employer may only make a deduction from the employee's wages if it is required or permitted by a statutory or contractual provision or the employee has given his prior written consent to the deduction.


labour agreements in Latvia, Lithuania, EstoniaPayments For Maternity And Disability Leave

The amount of maternity pay is calculated on the basis of the employee’s income received within 12 calendar months prior to the month leave began. Where more than one child is born, the amount of maternity allowance shall be paid for additional 14 days. The minimum monthly is one third of the employee’s income for the current year. The maximum monthly amount of maternity pay shall be equal to a sum 3,2 times the employee’s income received in the current year. Employees who have temporarily lost their functional capacity will retain their position and duties if they are absent from work due to temporary loss of functional capacity for a maximum of 120 successive days or 140 days within the last 12 months. In certain circumstances provided for by law and other regulatory acts, the position and duties shall be retained for a longer period. Sickness allowance is paid by the employer for the first 2 days and cannot be less than 80% but cannot be more than 100% of employees’ wage. Sickness allowance from State Social Insurance Fund is paid from the third day at 80% of the employee’s wage.


labour agreements in Latvia, Lithuania, EstoniaAbsence For Military Or Public Service Duties

Employees are entitled to take leave for military or public service duties. Working time does not include time taken for the performance of state, public or citizen's duties, military service or military training.


labour agreements in Latvia, Lithuania, EstoniaWorks Councils or Trade Unions

The rights and interests of employees may be represented and protected by the trade unions. Where an enterprise, agency or organisation has no functioning trade union and the staff have not transferred the function of employee representation and protection to the trade union, the employees shall be represented by a labour council which is elected by secret ballot at the general meeting of the staff. The same person cannot represent and protect the interests of both the employees and the employers. When protecting the rights of the employees, trade unions are guided by laws regulating trade union activities, the Labour Code and their respective regulations. The status of labour councils and their formation are established by law. The labour council possesses all rights of the trade union where there is no functioning trade union in the company. The labour council may not perform functions recognised under laws as the prerogative of trade unions.


labour agreements in Latvia, Lithuania, EstoniaEmployees’ Right To Strike

The employees and their representatives have the right to organise and manage strikes.


labour agreements in Latvia, Lithuania, EstoniaEmployees On Strike

Employees strike if a collective dispute is not settled or a decision adopted by the Conciliation Commission, Labour Arbitration or third party court, is acceptable to the employees, but is not being implemented by the employer. The right to adopt a decision to declare a strike (including a warning strike) is vested in the trade union according to the procedure laid down in its regulations. The employer must be given an at least seven days' written notice of the beginning of the intended strike or warning strike. When a strike is declared, only the demands which were not met during the conciliation procedure may be put forward. A warning strike lasting no longer than two hours may be held before the strike is declared. The decision to call a strike shall specify:

  • the employees demands with respect to why the strike has been called;
  • when the strike will begin;
  • the body leading the strike.

The law sets out the situation where longer notification is required to be given to the employer and the circumstances where strikes are not permitted.


labour agreements in Latvia, Lithuania, EstoniaEmployers’ Responsibility For Actions Of Their Employees

Liability is incurred when one party to a labour relationship causes damage to another party through non-performance of work duties or by performing them unsatisfactorily. Liability is incurred when all the following conditions are present:

  • damage has been caused;
  • damage has been caused through illegal activity;
  • there is a causal relationship between an illegal activity and damage;
  • the offender is guilty;
  • the offender and the victim were in a labour relationship during the violation of law;
  • the resulting damage relates to work activities.




Jovita Valatkaite, solicitor of the Gencs Valters Law Firm in Vilnius

Practising in fields of  Labour Law in Latvia, Lithuania and Estonia

T: +370 52 61 10 00

F: +370 52 61 11 00

For questions, please, contact Valters Gencs, attorney at law at

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The material contained here is not to be construed as legal advice or opinion.

© Gencs Valters Law Firm, 2016
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