SCL interpretations regarding labour disputes on rights with an international element concerning the jurisdiction, interpretation, and application

2020-05-21

On May 6th, 2020, the Supreme Court of Lithuania released an important ruling on the interpretation and application of procedural law norms governing the jurisdiction of labour disputes on rights with an international element.

We present the main and most relevant aspects from the ruling of the Supreme Court of Lithuania:

• If the employee‘s permanent residence is in another state, a labour dispute on rights initiated by the employer must be settled in that other state, unless the parties agree to settle the dispute under the Labour Code.
• The provision of the Labour Code (Article 215 (3)) prohibiting an employer from initiating a labour dispute on rights in a state other than the employee’s state of permanent residence is imperative and considered lex specialis regarding Article 215 (2) of the Labour Code which states that in civil cases arising from labour disputes on rights, jurisdiction is determined under the rules of the Code of Civil Procedure of the Republic of Lithuania unless the European Union labour law norms or international agreements of the Republic of Lithuania provide otherwise. This provision can only be derogated from if all two conditions are met:

1) the parties agreed to settle the dispute in Lithuania under the procedure established by the Labour Code and

2) such agreement was already concluded in the event of a dispute between the parties.

In the absence of these conditions, Lithuanian labour dispute resolution bodies must refuse to hear such a dispute.

• The provision prohibiting an employer from initiating a labour dispute in a state other than the employee’s state of residence seeks to protect the weaker party to the employment contract by rules of jurisdiction more favourable to his interests and therefore applies only if the labour dispute is initiated by the employer. If an employer that has headquarters in the Republic of Lithuania concludes an employment contract with an employee resident of another state, the latter has the right to initiate an individual labour dispute on rights at any time in Lithuanian labour dispute resolution institutions. If an employee permanently residing in a foreign state initiates a dispute in the Labour Disputes Commission in Lithuania, an employer who does not agree with the decision of this Commission is not obliged to apply to the courts of the employee’s permanent residence for a different resolution of the dispute examined by the Lithuanian Labour Disputes Commission (Article 231 of the Labour Code), as the transfer of a pre-trial labour dispute to Lithuania does not start a new labour dispute.

For more information or consultation on labour law disputes, please contact the ECOVIS ProventusLaw team.