iGlobal Law

Core Facts

• Population:  2.8M
• GDP:  USD 41 billion
• GDP per head:  USD 15,347
• Workforce:  1.3M
• Unemployment (2017):  7.9%
• Average monthly wages (2017):  USD 917

Regulatory

• Government debt:  40% of GDP
• Personal income tax:  15%
• Corporation tax:  15%
• World corruption ranking 2016:  38th Transparency International
• Ease of doing business ranking:  21st Business Freedom Index
• Labour law:  ILO Conventions ratified
• Data protection:  Member of the EU and so recognised as having adequate protection

The Lithuanian Labour Code came into effect in 2003 and has been amended several times since. It regulates both collective and individual employment relationships and it applies the principle that parties are free to agree their own contract terms provided they are no less favourable to the employee than the Labour Code.

Employment contracts must be in written form and be consistent with the model established by law. Employment contracts are mainly of indefinite length but can be for fixed terms in certain circumstances provided that a fixed term cannot exceed 5 years.

Trade Unions in Lithuania are relatively weak and so are not influential in Lithuanian labour relations. In part this is because there is an historic preference for a separate union for each enterprise. As a result, the terms agreed in collective agreements do not form a significant part of contracts of employment. The Labour Code provides for the establishment of Works Councils.