The newest employment law update, July 2025, by ECOVIS explores the latest developments in employment law and looks at the issues that matter to employers.
Lithuania bans entry with non-biometric Russian passports from June 1, 2025
As of 1 June 2025, Lithuania no longer recognises non-biometric passports issued by the Russian Federation as valid travel documents for entry into its territory. The restriction does not apply to rail transit between Kaliningrad and mainland Russia.
For Russian nationals holding residence permits issued by Lithuania or other EU/EEA/Schengen countries, the same restriction will take effect on 1 December 2025, allowing time to replace non-biometric passports.
Exceptions may be granted on a case-by-case basis for members of the democratic opposition, independent media, or civil society, where the purpose of travel aligns with Lithuania’s national interests.
This measure aligns with similar restrictions already adopted by other EU Member States and reflects national security concerns and ICAO travel document standards.
Supreme Court decision on dismissal case
On 5 June 2025, the Supreme Court of Lithuania delivered a ruling clarifying the legality of dismissals in the context of organisational restructuring and outsourcing part of a business.
In this case, a healthcare institution, aiming to reduce losses, decided to discontinue the in-house production of dental prostheses and instead outsource these services to third parties. As a result, the positions of dental technicians were abolished, and the employees concerned were dismissed.
The employees challenged the dismissals, arguing that the employer had first asked them to accept a significant pay cut—nearly threefold—and, upon their refusal, restructured the organisation and eliminated their roles, outsourcing the functions to an external provider. The employees claimed this violated Article 45(2) of the Lithuanian Labour Code, which prohibits terminating an employment contract under Article 57 if the employee refuses to accept a lower salary. They also argued that the outsourcing constituted a transfer of part of the business, in which case, employment continuity must be ensured.
The Supreme Court rejected the employees’ claims, holding that an employer can independently organise its activities, including decisions on its structure, workforce, positions, and operational efficiency. The Court stressed that genuine organisational changes that render an employee’s function redundant can justify dismissal, even if the employee previously refused to accept a lower wage. Such dismissals do not breach Article 45(2) prohibition if the reorganisation is real and lawful.
In conclusion, the Court confirmed that employers may reorganise and optimise their operations for efficiency, provided the changes are genuine and comply with legal requirements. Employee rights must be respected, but cannot prevent legitimate business restructuring.
Supreme Court of Lithuania: Employer’s Undertaking in Migration Process Does Not Constitute an Employment Contract
In a landmark ruling, the Supreme Court of Lithuania clarified that a mere promise by an employer to hire a foreign national, submitted during immigration procedures, does not establish a binding employment relationship. The employment contract is only valid once mutual agreement is reached on essential terms and the employee’s qualifications are verified.
The case involved a logistics company that declined to hire a foreign driver after he failed a required practical driving test. Lower courts had awarded compensation, but the Supreme Court reversed the decisions, confirming that no employment contract was formed, and the employer acted within its rights to terminate the recruitment process based on the applicant’s lack of demonstrated skills. Accordingly, no employment contract was lawfully concluded, and the claimant is not entitled to compensation or damages.
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