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New Labour Code of the Republic of Lithuania enters into force. What you should know?

New Labour Code of the Republic of Lithuania enters into force. What you should know?

It is rather short time remaining until the new Labour Code of the Republic of Lithuania enters into force (effective date is 1st July, 2017). Therefore we are sharing advice on how to adapt business processes appropriately in advance in order to comply with the latest regulatory changes related to:

– an amendment to an employment contract,

– revision of existing domestic local laws, adoption of new mandatory internal local acts;

– establishment of the Commission in order to set up Works council;

– non-competition, confidential information and processing personal data.

1) First of all, we recommend to start reviewing company documentation and start amending it according to the provision of the new Labour Code. We also purpose to prepare new employment contracts templates, which will be used for employees hired after 1st July, 2017. We would like to point out that in the new Labour Code there are new types of employment contracts, which can help to reduce administrative burden on the employer.

2) We advise employers to review existing rules of procedure, payment of salary and other procedures in company which are in force, adjust them to the new requirements and remove provisions that are in conflict with the new Labour Code. It is necessary to point out employer’s responsibility to specify the categories of employees according to their positions and qualifications, and the amounts of each form of payment and their wages (minimum and maximum) in the payment system.

3) Companies, which on average have more than 20 employees, will be required to establish the Commission of the Elections of the Works Council in order to set up Works Council. The employer must inform the Works Council and consult with it on the decisions on approval or modification of the company’s internal regulatory documents.

4) The regulation of non-compete agreements is changing. The parties of the employment contract may agree that the employee will not compete with the employer during employment and  for a certain time after the expiration of the employment relationship. The employee is entitled to compensation amounting to at least 40 percent of average monthly salary. The maximum duration of non-competition is 2 years after the termination of the employment. It is necessary to agree on: the term of non-competition, the compensation for it and its payment procedure, the scope of non-compete agreement and its territory. The parties may also agree on a penalty in case the employee breaches the non-competition obligation but the penalty may not exceed compensation for 3 months. We recommend employers to review existing non-competition agreements with employees to make sure that the specified conditions match the new requirements stipulated in the new Labour Code.

5) The parties of the employment contract may enter into an additional agreement on the protection of confidential information during the performance of the employment contract and after the end of the contract. We offer to define in an agreement of confidential information what is confidential information, the duration of an agreement, the employer’s duty to maintain confidentiality of information and penalties on violations of the obligations to protect confidential information.

6) About the protection of personal data and privacy of the employee in a workplace. It is prohibited for the employer to handle personal data of the employee which is not related to labour needs, also to provide personal data of the employee to the third parties, except in cases provided by the law. It is recommended to formalize and familiarize employees with the policy of usage of information and communication technology, and monitoring of the personnel and control procedures in the workplace; also to adopt and publish the policy of security of personal data of the employees together with measures for its implementation, if the average number of employees is more than 50; employees should be informed by figurative sign about video and audio recording when it is allowed for specific activities of the company.

Companies, which on average have more than 20 employees, will be required:

– within 6 months of the effective date of the Labour Code to establish the Commission of the Elections of the Works Council in order to set up Works Council (prepare the package of the documents of the election of the Works Council and approve work regulations of the Works Council);

– to approve the remuneration system (salaries and supplements) rules;

– review existing rules of procedure and other internal rules;

– review the employment contract.

Companies, which on average have more than 50 employees, will be required to adopt:

– local acts on equal opportunities policy and employee data storage policies;

– personal data retention policies and measures for its implementation;

– review existing rules of procedure and other internal rules;

– review the employment contract.

We also highly recommended to:

– evaluate the organization of work, working hours and work remuneration adaptation to the new Labour Code (working at night, overtime, on rest days, on business trips, on duty, during holidays and etc.);

– procedure for the implementation of the remote work, if such work organization procedures are applied;

– procedure for determining the order of holidays;

– prepare selection of criteria for employees which will be redundant, if only a part of the employees is discharged from the office;

– prepare non-formal education program, if an apprenticeship agreement is concluded.

If you need help reviewing your existing employment contracts or you need our help by adopting documentation of your company in compliance with the new Labour Code, we will be happy to assist you. Also we can provide training regarding the new Labour Code.

Loreta Andziulytė