Law on works councils adopted

In October 2004, after more than two years of debate between the social partners, the Lithuanian parliament finally adopted a law introducing works councils. These new employee representative bodies may be established in enterprises with or more 20 employees where there is no trade union present.

A Law on Works Councils (Lietuvos Respublikos darbo tarybų įstatymas) was adopted by parliament (the Seimas) on 26 October 2004. The legislation lays down the status of works councils and their composition and activities (and the basis for terminating these activities), and regulates the rights and obligations of works councils and their members, and guarantees for the members.

A draft law on works councils was prepared in August 2002 by the Ministry of Social Security and Labour (Socialinės apsaugos ir darbo ministerija, SADM). It was then considered by the Tripartite Council of the Republic of Lithuania (Lietuvos Respublikos Trišalė taryba, LRTT). On 1 January 2003, a new Labour Code (Lietuvos Respublikos darbo kodeksas) was adopted, which provided for most industrial relations issues to be regulated through collective agreements. Due to very low trade union membership in Lithuania, most of the Labour Code's provisions could not be applied without the existence of works councils as an employee-side representative structure.

It was expected that the works councils legislation would be adopted by 1 January 2003. However, the draft was debated five times by the LRTT, without agreement, in the period up until May 2003. Trade unions were concerned about competition from the new bodies and employers were unwilling to provide additional guarantees to employee representatives on works councils. Finally, a compromise was reached among the social partner organisations on the LRTT. After being approached, the International Labour Organisation (ILO) submitted its comments. Based on these, the draft law was amended and submitted to parliament, along with the alternatives on which the social partners had failed to come to a consensus. Similar discussions were then held among various groups in parliament. Finally, the law was adopted in October 2004 .

The new law stipulates that a works council may be established when there is no trade union in an enterprise and no decision has been made at an employee meeting to transfer rights of representation and protection to the relevant sectoral trade union. An enterprise can have one works council only, irrespective of the number of branches or subsidiaries it may have.

A works council may be established in an enterprise that employs at least 20 workers, and is elected by an employee meeting. In smaller enterprises, the function of the works council is transferred to an employee representative elected by an employee meeting. The employee meeting that elects the works council or employee representative is considered to be quorate if at least 50% of the employees participate. The law gives employees the right to initiate the establishment of a works council. The employer must announce the election of the works council's members upon receipt of a written proposal to establish one, signed by at least one-fifth of the employees.

Depending on the number of employees in the enterprise, a works council may have a minimum of three and a maximum of 15 members. The term of office is three years. All employees of the enterprise who are at least 16 years old and have worked for the enterprise for at least six months may be elected onto works councils. The employer and its representatives have no right to works council membership.

The law on works councils stipulates that members should perform their functions within their working hours and be paid their regular wages. Members are entitled to 60 hours of time off per year to attend council meetings and carry out their functions, unless a collective agreement provides for more time off. The skills and qualification that works council members need to perform their functions as employees’ representatives are to be upgraded at the employer’s expense, with at least three days per year to be dedicated to such training.

The law gives works councils the right to participate in information and consultation procedures, conclude collective agreements, and bring court cases concerning the legality of employer decisions. However, works councils cannot undertake functions that are entrusted by law only to trade unions, such as calling a strike.

Under the law, the activities of a works council are not interrupted in the event that a trade union is subsequently established in an enterprise - the two bodies are instead obliged to cooperate. Thus, if a trade union is established in an enterprise or if an employee meeting transfers representation and protection rights to an appropriate sectoral trade union, the works council continues its work. Where a trade union and a works council function in parallel, a joint body formed by the trade union and works council has the right to conclude collective agreements and represent employees. If no consensus on forming such a joint body is reached, an employee meeting shall take a decision on the issue of representation. Otherwise, a new works council may not be formed when its term of office comes to an end, and only the trade union will continue its functions in the enterprise.