National Action Plans for employment 2004 - case of Lithuania

Though social partners persistently share in formation and assessment of the Lithuanian employment and labour market policy at the national level, their role in drawing up of the Lithuanian NAP for Employment 2004 was quite insignificant. On one hand, it was conditioned by social partners’ approaching the preparation of NAP as a prerogative of the Government of the Republic of Lithuania (Lietuvos Respublikos Vyriausybė, LRV), on the other hand, financial and human resources of the social partners are insufficient to enable them to deal with the NAP material, related EU documentation and statistical information on an ongoing and systematic basis. NAP material drawn up by the Governmental Commission comprised of responsible representatives from ministries and scientific institutions was positively approached by the social partners at the Tripartite Council of the Republic of Lithuania (Lietuvos Respublikos Trišalė taryba, LRTT). Though no serious reservations were made, representatives of the employers noted that the NAP contained too many general statements and too few obligations of the LRV in the field of employment. In 2005, it is planned to increase involvement of the social partners into drawing up of the NAP 2005. LRTT should also intervene more actively. It shall encourage tackling of some issue at tripartite commissions operating under labour market policy institutions as well.

Introduction

It should be noted in general that social dialog and partnership in labour-related and social fields are just at the stage of development in Lithuania. The Tripartite Council of the Republic of Lithuania (Lietuvos Respublikos Trišalė taryba, LRTT) and tripartite commissions at the labour market institutions play somewhat bigger role in formation and assessment of the employment policy. Activities of the social partners are inefficient at the local level (in companies, enterprises). Organisations of employers and trade unions often do not reach common opinion; horizontal co-operation is not enough developed inside their organisations. Nevertheless it should be noted that the social partners’ organisations are quite active in formation and assessment of implementation of the employment policy, though their activities are insufficiently targeted.

Procedural aspects

At the national level, the social partners play an important role in formation of the employment policy. In preparation of the key document defining the employment policy in the country - 'Programme for Increasing Employment of the Republic of Lithuania for 2001-2004', the programme draft was discussed at the LRTT before submitting it for the approval by the Government of the Republic of Lithuania (Lietuvos Respublikos Vyriausybė, LRV). In addition, the LRTT reviews on a regular basis the annual reports on the programme and recommendations concerning revision thereof. The general public is kept informed on the progress of the programme implementation.

Moreover, the social partners take active part in discussions of relevant issues of the implementation of the employment policy at the tripartite commissions subordinated to the labour market organisations of all levels. Therefore, we can state that social partners are consulted in substance in the light of implementation of the national employment policy, but their impact on the preparation of NAP was insufficient.

On preparation of the NAP 2004, consulting was sought from the LRTT and national level social partners’ organisations:

• Trade unions: the Lithuanian Labour Federation (Lietuvos darbo federacija, LDF), the Lithuanian Confederation of Trade Unions (Lietuvos profesinių sąjungų konfederacija, LPSK) and Lithuanian Trade Union 'Solidarumas' (Lietuvos profesinė sąjunga 'Solidarumas', Solidarumas);

• Employers: the Lithuanian Business Employers’ Confederation (Lietuvos verslo darbdavių konfederacija, LVDK) and the Lithuanian Confederation of Industrialists (Lietuvos pramoninku konfederacija, LPK) (LT0410102F).

On 22 January 2004, the Ministry of Social Security and Labour (Socialinės apsaugos ir darbo ministerija, SADM) signed an agreement with the Association of Lithuanian Chambers of Commerce, Industry and Crafts (Lietuvos prekybos, pramonės ir amatų rūmų asociacija, LPPARA) on the implementation of the provisions of the 'European Employment Strategy (EES)'.

On April 2004, the LRTT presented methodological recommendations for the development of the EES and NAP for Employment. Social partners were not directly obligated to furnish material for the NAP, but according to Mr. R.Darulis, the Deputy Director of the Labour Department of the SADM, they had enough time to submit their comments and requests. Individual guidelines of the elaborated NAP or fragments of the documents in progress were not discussed with the social partners.

In drawing up the first NAP in Lithuania, real situation of social partnerships, poor potential of the social partners in general and with regard to drafting distinct parts of the NAP individually were taken into consideration. Therefore, in order to assess different views as much as possible, representatives from scientific research organisations engaged in the fields of improvement of the employment policy were included in the composition of the provisional commission for drawing up the NAP for Employment 2004 in the Republic of Lithuania. Material of the mentioned representatives collected in various fields of social partnership was used for drawing up individual chapters of the NAP.

The NAP text was prepared by the Governmental Commission formed from representatives of different ministries and scientific institutions. Each ministry was instructed to consult its social partners (within the limits of appropriate competence).

Members of the NAP drafting commission would receive material from responsible representatives of the ministries and scientific institutions, so they could not quantify contributions of the social partners to the preparation of the NAP.

The procedure of signing the NAP was set forth neither by the LRV, nor with social partners, nor with other organisations.

In general, social partners had no major comments with regard to the NAP. Representatives from the LPK noted that the NAP contained many general statements, while the planned actions were not described clearly enough, i.e. they asked for more precise future indices (e.g., what is the average wage planned for 2005-2007, what charges will be for electricity, how much money will be assigned from the public budget for training of adults, etc.). According to the authors, many of the above mentioned questions were addressed, though exact figures were difficult to present in all cases, in particular considering the Lithuanian Parliament (Lietuvos Respublikos Seimas, LRS) election on 24 October 2004 and consequential changes in the LRV.

With regard to the Lithuania’s response to the call for the reform partnerships made at the spring 2004 European Council, it should be pointed out that no special measures were implemented in our country in 2004, as this process commenced in 2003 together with preparation and commenced implementation of the 'Action Plan for the Development of Social Partnership 2003-2004'.

Matters of policy content

It should be noted that Lithuania is undergoing a transition from the model of strictly centralised regulation of employment relations to the regulation of such relations based on a social dialogue. Through their organisations, social partners are intervening implementation of the employment improvement measures in Lithuania. Here the LRTT is playing the key role. This Council has been reviewing the implementation of the 'Programme for Increasing Employment of the Republic of Lithuania for 2001-2004', as elaborated in accordance with the EU employment strategy guidelines, twice per year since 2002. Social partners’ organisations of other levels (see below) deal with more particular issues related to the implementation of the policy measures, as pertinent to the specifics of the institutions under subordination of which they are established.

In Lithuania (due to weak potential of social partners in general), the system of social dialogue is still functioning on the tripartite principle. Provisions of tripartite co-operation are incorporated in a number of regulations (e.g., Law on Support of the Unemployed (Bedarbių rėmimo įstatymas), Law on Vocational Education and Training (Profesinio mokymo įstatymas), etc.). The Labour Code of the Republic of Lithuania (Lietuvos Respublikos darbo kodeksas) in force from 1 January 2003 incorporated the system of social partnership consisting of the LRTT and other tripartite and bipartite councils (commissions, committees) formed in the procedure stipulated by laws or collective agreements.

Tripartite co-operation is popular in Lithuania mainly in tackling the issues relating to employment, work remuneration, employees’ social guarantees, safety at work, health care and vocational training. Drafting of the Labour Code and consideration thereof made a major contribution to activation of the social dialogue.

The system of tripartite partnership in the field of labour market and employment in Lithuania consists of:

The LRTT;

• Council for Vocational Training at the SADM and the Ministry of Education and Science (Švietimo ir mokslo ministerija, ŠMM);

• Tripartite Council at the Lithuanian Labour Exchange;

  • Territorial tripartite commissions at (46) territorial labour exchanges;

• Council of Experts at the training office of the Lithuanian labour market;

  • Territorial Expert Commission at (7) labour market vocational training and consulting offices.

The LRTT tackles social, economic and employment-related problems by mutual agreement of the parties in order to reserve social peace in the society. In 2002, the first annual tripartite co-operation agreement was signed by the LRV, trade unions and employers’ organisations. Among others, the agreement provided for the following:

• On request of representatives of the employers’ organisations and trade unions, create an opportunity for them to share in drafting of regulations designated for implementation of the Labour Code; discuss regulation drafts at the LRTT; take joint efforts in organisation of information, training and counselling of employees and employers on issues related to the labour law;

• Every semester review at the LRTT how labour laws are complied with and make recommendations on improvement and implementation of the labour laws and improved compliance control;

• Twice per year review at the LRTT the progress in implementation of the measures stipulated in 'Programme for Increasing Employment of the Republic of Lithuania for 2001-2004';

• Improve the system of safeguarding work remuneration and population income by developing the strategy for indexation and differentiation of the tax-free minimum and minimal monthly wage;

• Once per year review at the LRTT the progress in implementation of illegal work prevention, support co-operation between institutions controlling illegal work and social partners;

• Once per year debrief and assess at the LRTT information submitted by the Commission for Safety and Healthcare of Employees, Council of the State Social Insurance Fund, Council of the Lithuania Vocational Training, Guarantee Fund.

In 2003, the LRV approved the Action Plan of the LRV, trade unions and employers’ organisations on the 'Development of Social Partnership in 2003-2004'. The basic components of the plan are as follows:

• the system of social partnership and improvement thereof;

• improvement of legal and regulatory framework of the social partnership;

• improvement of collective employment relations;

• information and awareness of social partners.

Seeking to strengthen the role of social partners in tackling the problems of job-losers and to coordinate joint efforts efficiently, the Lithuanian Labour Exchange (Lietuvos darbo birža, LDB) has signed cooperation arrangements with 18 largest state and public organisations, administrations of employers’ organisations.

It should be noted that proposals of the social partners in Lithuania at the level of discussing the implementation of the employment guidelines contributed a lot to attuning the planned measures to real economic conditions. No special undertakings or individual tripartite agreements were signed. Relevant decisions were validated in Governmental regulations and other acts of the LRV.

In promotion of adaptability and mobility of labour force in the labour market, consideration of employers’ proposals contributed to simplified formalisation of employment relations to employ academic youth for practice in companies/enterprises, increased funding of jobs supported by the 'Employment Fund' and local employment incentives, etc. On the other hand, employers improved transport services for employees (in particular in regions with predominating rural infrastructure).

The social partners are especially active in development of human capital and lifelong learning. In 2003, the ŠMM delegated the function of final evaluation of qualifications to the LPPARA as well as to the Chamber of Agriculture (Žemės ūkio rūmai). This enabled segregation of evaluation of the acquired qualifications from the training process and is therefore expected to ensure better evaluation of qualifications and bigger responsibilities of social partners.

In order to improve individual skills demanded in the labour market, legislation regulating vocational training programmes of the labour market sets forth that at least 2/3 of the total scope of training shall be implemented through real jobs (in companies and enterprises). This provision was agreed upon with and approved by employers’ representatives. Further support of practical training is expected through implementation of the 2004-2006 Joint Programming Document of Lithuania, measure 2.2. 'Improvement of Labour Force Competence and Adaptability to Changes'.

Nationwide orientation to the development of economy based on knowledge and information technologies increases the need for continuous training. However, education of adults, and continuous vocational training in particular, is the bottleneck in the Lithuanian lifelong training system. Therefore, cooperation with social partners is sought to improve the legal framework to define obligations of employers and employees in the field of qualification improvement and economic motivation of employers to finance employees’ participation in training programmes. It is planned to create mechanisms enabling co-operation of public, employer’s and personal funds for prolonged vocational training. Provisions of the 'National Education Strategy for 2003-2012' underline the necessity to ensure accessibility, continuation and justice in education development.

As regards the priorities, made by the Council, one should point out that representatives of the social partners’ organisations at all levels found recommendations to be highly relevant for Lithuania.

In 2003 and on May 2004 representatives of all social partners’ organisations agreed to raising of the minimal monthly wage and tax-free minimum in order to encourage the population to engage in less paid jobs and to lessen the tax burden of low-income receivers.

As it was mentioned, the role of the social partners becomes increasingly active in incentives of various vocational training establishments (universities, colleges, vocational training centres, etc.); employers increase direct investments into qualification improvement of the employees. Employers and trade union organisations are increasingly involved in projects on EU structural funds expected for improvement of human resources.

The employment policy of the LRV was based on the implementation of the 'Programme for Increasing Employment of the Republic of Lithuania for 2001-2004'. As it was mentioned before, this document was regularly discussed and assessed as to its implementation by the social partners at the LRTT. In general, social partners positively assess the employment policy followed by the LRV in 2001-2004. Yet, there are some confrontations in Lithuania on individual issues regarding the perspectives of the improvement of the national employment policy.

According to employers, in future the LRV should increase liberalisation of employment relations, stop restricting migration of labour force from non-EU countries, reduce taxation of labour force and provide for opportunities to support vocational training of adults. Besides, Lithuanian employers more and more often emphasise the necessity to minimise emigration of labour force with the help of economic measures.

According to employees’ representatives, it is necessary to reinforce the control of compliance with statutory guarantees, to use economic measures for encouraging employers to enter into collective agreements, to raise wages more rapidly (relating them to companies’ business results) and to accelerate development of vocational training of adults.

In their assessment of the NAP, the social partners noted that:

• it is reasonable to lessen the entire scope of the document;

• description of analytical material and strategic provisions could be less extensive;

• it is reasonable to place the NAP on a higher level, so that the document become a part of the current national social-economical policy;

• it is reasonable to define more particularly in the NAP the responsibility of various ministries and departments (social partners including) for achievement of relevant goals and to provide for tighter cooperation thereof in the field of development of the employment policy;

• it is necessary to provide the social partners and society with wider and systematic information about the contents of the NAP and its drafting procedures.

Employers find the Lithuanian NAP 2004 to contain too few clearly defined obligations of the LRV in the field of employment.

BEPGs

The 'Lithuanian national report on structural reforms 2004' was drawn up in accordance with the material submitted by the ministries and other public authorities. The report was drawn up in accordance with the form/structure of the national report on structural reforms as set by the Council Committee for Economic Policy with regard to the European Commission and ECOFIN. The drafting of the report was coordinated by the Ministry of Finance (Finansų ministerija). The 'Lithuanian national report on structural reforms 2004' was approved by LRV on 13 October 2004.

The draft report was submitted for agreement by the ministries and other public authorities of the Republic of Lithuania (Ministry of Economy, SADM, Ministry of Transport, ŠMM, Ministry of Environment, Ministry of the Interior, Ministry of Foreign Affairs, Bank of Lithuania, Public Procurement Office at the LRV, Competition Council, State Property Fund, Information Society Development Committee at the LRV, Lithuanian Statistics, Securities Commission, Insurance Supervision Authority, Ministry of Justice, the Department of the European Union Policy Analysis and Inter-Institutional Coordination of the Chancellery of the LRV).

Provisions of the Ministry of Finance and instructions on the drawing up of the report do not set forth that the report must have been directly agreed upon with the social partners. This could be done by each ministry or authority for which attention the draft was submitted (this part contains information received from Ms. Aurelija Jurgutytė, the Head of the Economic Policy Coordination Division of the Ministry of Finance).

Comments

With the view to fulfil its obligations stipulated in the Agreement of the European Community, Chapter VIII 'Employment' Article 128, § 3, the LRV (by its Resolution 'On the Drawing up of the 2004 NAP for Employment') formed the interdepartmental commission to elaborate the draft of the mentioned plan. Concurrently LRV obligated SADM to approve the members of the commission, to coordinate work of the commission and to submit the NAP 2004 to the European Council and European Commission in the procedure and by time limits set by the European Council.

The interdepartmental commission was formed from the representatives of SADM, ŠMM, Ministry of Finance, Ministry of Transport, Ministry of Economy, Ministry of the Interior, Ministry of Agriculture, the Department of National Minorities and Lithuanians Living Abroad at the LRV, Lithuanian Statistics, the Lithuanian Labour Exchange, the Lithuanian Labour Marker Training Office and the Institute of Labour and Social Research.

According to the members of the commission for the drawing up of the NAP 2004 of Lithuania:

• it is reasonable to extend the intervals of the NAP. Such documents should be made every 2 or 3 years only, while short annual information on the results of the employment policy in accordance with the Council recommendations would be quite enough;

• procedures for approval of the NAP should be defined more clearly. Shall this document be signed by the social partners or shall it be approved by the Government, etc.? It is reasonable to publish material on EU experience in this field and make related recommendations.

• the status of the NAP should be defined more clearly. Is it an annual report on the changes in the sphere of employment and determinant factors thereof? Or is it a plan of concrete actions for the future?

According to the social partners, and to employers’ mind in particular, it is reasonable to combine into one document the EES and the guidelines of the general economic policy. Accordingly, a uniform national action plan should be drawn up then.

Commentary

To sum up the presented material, we can say that according to the view of Lithuanian social partners, drawing up of the NAP is a prerogative of the Government. Therefore, they did not have in fact any special requests or recommendations as to the process of drawing up this document. The social partners also noted that they disposed of limited human and financial resources and were therefore often unable to conduct independent analysis of the situation and submit relevant proposals or recommendations.

Involvement of the social partners in the drawing up of the Lithuanian NAP 2004 was more fragmented than systematic. Therefore, it is expected to activate participation of the social partners to a large extent in 2005, in particular in the context of NAP. The LRTT plans to form a commission for assessment of implementation of relevant provisions of the NAP on a regular basis, for analysis of relevant EU regulations and for provision of recommendations to public authorities. Accordingly, horizontal and vertical cooperation of social partners should be strengthened. Therefore, the Tripartite Commission at the Lithuanian Labour Exchange and Council of Experts at the Lithuanian Labour Market Training Office were recommended paying more attention to the analysis of implementation of appropriate guidelines. In September 2004 SADM started discussions with representatives of the social partners’ organisation on their potential to contribute more actively to the drawing up of the NAP 2005. They are supposed to make comments on individual guidelines of the employment policy or, if possible, to draw up a separate part of the NAP. These efforts would be extremely useful not only for improvement of the Lithuanian NAP, its quality and unbiased assessment, but also for encouragement of currently insufficient cooperation among the social partners’ organisations.

It’s worth repeatedly noting that social partners in Lithuania have had limited potential so far (insufficient human and financial resources) to ensure regular and systematic dealing with the NAP material. Therefore, it is difficult to make concrete forecasts as to their final contribution to drawing up of the NAP 2005 in Lithuania (Boguslavas Gruzevskis, Institute of Labour and Social Research).