The Legal System of Posting of Workers in Lithuania
Daiva Petrylaitė, Professor of Labour Law at Vilnius University, Law Faculty
Vida Petrylaitė, Associate Professor of Social Security Law at Vilnius University, Law Faculty
Despite already 20 years of legal regulation and practise in the sphere of posting of workers, it can be stated that this issue is not popular among legal scholars, the case law is also small and fragmented. It must be admitted that Lithuania is “sending (posting) country” with low numbers of other EU workers posted to Lithuania and quite significant number of workers posted from Lithuania to other EU Member States.
The article analyses the system of legal regulation of posted workers in Lithuania. This legal institute was introduced after the transposition of the Directive 96/71/EC in Lithuanian labour law. It should be noted that Lithuanian labour law has been reformed several times over the last few decades. The legal norms regulating the employment relations of posted workers also have been changed several times. The aim was to correct some legal problems, to fill in legal gaps and, of course, to transpose the new provisions of the relevant EU directives.
Nonostante i venti anni di regolamentazione legislativa e di pratica legale, si può affermare che il tema del distacco transnazionale dei lavoratori non sia popolare tra gli studiosi di diritto e anche la giurisprudenza è poco numerosa e frammentata. Si deve ammettere che la Lituania è un “paese di invio (o distaccante)”, con un numero ridotto di lavoratori dell’UE distaccati in Lituania a fronte di un numero piuttosto significativo di lavoratori distaccati dalla Lituania in altri Stati membri dell’UE. L’articolo analizza il sistema di regolamentazione giuridica dei lavoratori distaccati in Lituania. Questo istituto legale è stato introdotto dopo il recepimento della direttiva 96/71/CE nel diritto del lavoro lituano. Si osserva che il diritto del lavoro lituano è stato riformato più volte negli ultimi decenni e anche le norme legali che regolamentano i rapporti di lavoro dei lavoratori distaccati sono state modificate più volte, avendo l’obiettivo di correggere alcune criticità interpretative, colmare le lacune nella disciplina e, ovviamente, recepire le nuove disposizioni delle pertinenti direttive comunitarie.
1. Introduction - 2. National legal framework - 3. Definition of posted worker - 4. Some aspects of terms and conditions of employment applicable to posted workers - 4.1. Rules concerning the wage - 4.2. Minimum paid annual leave - 5. Conclusions - NOTE
In general, Lithuanian labour legislation regulating the situations of posting of workers provides quite different regulation for domestic posting and transnational posting. This division was determined with the joining European Union in 1 May 2004, when Lithuanian labour law had to be adapted to the requirements of EU legislation concerning posting of workers. Despite already 15 years of legal regulation and practise in the sphere of posting of workers, it can be stated that this issue is not popular among legal scholars, the case law is also small and fragmented. It must be admitted that Lithuania is “sending (posting) country” with low numbers of other EU workers posted to Lithuania and quite significant number of workers posted from Lithuania no other EU Member States. Taking into account economic situation of Lithuania and mainly existing level of Lithuanian salaries, the number of workers posted to Lithuania from the third countries (mainly Ukraine, Belarus, some other former Soviet Union countries) is much greater and these cross-border situations are dealt in practise more often. Thus, national legislative rules on posting of workers are also very important in order to ensure protection for workers from third countries. Thus, it is quite logical and adequate that Lithuanian legislator has chosen to apply the same material provisions which were introduced as a result of implementation of EU Directives also for workers from the third countries.
2. National legal framework
It is stated that the history of transposition of Directive 96/71/EC into the Lithuanian legal system was quite confusing . Though Lithuanian Labour Code, one of the objectives of which was to transpose EU labour law directives into Lithuanian labour law, entered into force on 1 January 2003 , however, it did not address the legal regulation of posted workers. As general rule, Article 5 of the Labour Code indicated that Lithuanian labour laws and other regulatory acts shall be applied to labour relations in the territory of the Republic of Lithuania regardless of whether the person is employed in Lithuania or has been posted by his employer abroad (Par. 1); furthermore in the Paragraph 4 of the same Article it was indicated that Lithuanian labour laws shall not be applied to the labour relations which occur between foreign employers and employees, when the employees are posted by the employer in the territory of the Republic of Lithuania. There was also an internal contradiction in the legal regulation at that time – the Paragraph 4 of the Article 220 of the Labour Code regulated that foreign nationals who are permanently employed in another state and who have been posted for a limited period to work in the territory of Lithuania during their work at the enterprises, agencies, organisations and institutions operating in Lithuania, shall be guaranteed the working conditions provided by the laws, other regulatory acts and collective agreements of the [continua ..]
3. Definition of posted worker
As regards the application ratione personae of Directive 96/71/EC “posted worker is defined in Article 2 (1) of the Directive: ‘posted worker’ means a worker who, for a limited period, carries out his work in the territory of a Member State other than the State in which he normally works. For the purpose of this Directive, the definition of a worker is that which applies in the law of the member state to whose territory the worker is posted. The main element of the three situations of posting defined in the Directive is the maintenance of employment relations between the sending undertaking and posted workers. And as a result, this condition and the definition of what should be considered as a posted worker are two aspects that need to have a legal basis in the Member States . Directive 96/71/EC does not contain criteria describing the concept of “limited time” to indicate that work in another Member State is of temporary nature, for example, the criterion of the duration of the worker’s employment in his/her Member State of origin (sending State) during the relevant periods, the criterion of the maximum possible duration of posting to another Member State, etc. The criteria for distinguishing the temporary nature of work are set in the Directive 2014/67/EU. Article 4 (1) of the Directive 2014/67/EU provides the rule that the competent authorities shall make an overall assessment of all factual elements that are deemed [continua ..]
4. Some aspects of terms and conditions of employment applicable to posted workers
The minimum standard of legal protection for posted workers is set in Article 3 of the Directive 96/71/EC. The provisions of the Directive ensure that posted workers must be covered by the host Member State’s minimum standards of protection with regard to working and employment conditions referred to in the Paragraph 1, inter alia, maximum periods of working time and rest periods, paid annual leave, minimum rates of payment for work, health and safety at work. The provisions of Article 3(1) of Directive 96/71/EC are clearly provided in the Paragraph 2 of Article 108 of the Labour Code. An employee posted temporarily to work in the territory of the Republic of Lithuania, irrespective of the law applicable to the employment contract or employment relationship, shall be subject to the provisions of this Code and other regulatory legal acts of the Republic of Lithuania regulating labour relations, including national (cross-sectoral), territorial and sectoral (industry, services, professional) collective agreements or separate provisions thereof, the application of which has been extended, establishing: 1) maximum working time and minimum rest periods; 2) duration of the minimum paid annual leave; 3) remuneration, including extra pay for overtime, night work, and work on days off and holidays; 4) the terms of employment for temporary workers; 5) safety and health at work; 6) safety at work for persons under the age of 18 and employees who are pregnant, who recently [continua ..]
4.1. Rules concerning the wage
When transposing the provisions of the Directive in Lithuania, attention was drawn to several problems. The following problems with the implementation of the said Directive in Lithuania have been identified. The daily allowances, with the exception of actual travel. Accommodation and subsistence expenses incurred in connection with the movement, are not considered as part of minimum wage, established by the Law. Daily allowances in Lithuania are not subject to personal income tax or State social insurance contributions, if their amount does not exceed those amounts established by the legal acts. In this way, Lithuanian companies often paying only a minimum monthly wage together with the untaxable daily allowances according national law become subject to inspections by the controlling authorities and social partners in other Member States, especially Denmark, Sweden, Norway, mainly those states which do not have a statutory minimum wage regulation. Whereas, since the Directive 96/71/EC itself does not contain any indications of the material content of the definition of the minimum wage, its components must be determined for the purposes of this Directive in accordance with the national law of the Member State. Besides modern changes in the regulation of the conditions of posting aims not into focusing on the minimum wage but on the normal or average wage in the related sector. From the first day of posting, the same payment rules must be applied as for native workers, i.e., [continua ..]
4.2. Minimum paid annual leave
Article 3(1)(b) of Directive 96/71 provides to guarantee workers posted “minimum paid annual holidays”. Article 108 (2) (2) of the Labour Code provides the guarantee “duration of the minimum paid annual leave”. It should not be understood that Lithuanian provision restricts the understanding of the guarantee. Again, we should refer to national definition of annual leave. Article 126 of the Labour Code provides that annual leave is the time off from work that is granted to an employee to rest and renew his or her capacity for work while paying him or her holiday (leave) pay. Employees are entitled to at least 20 working days (for those who work five days per week) or at least 24 working days (for those who work six days per week) of annual leave. If the number of working days per week is less or different, the employee must be granted leave of no less than four weeks. In addition, national legislation provides longer minimum annual leave for certain categories of employees, e.g., employees under the age of 18, employees who are single-handedly raising a child under the age of 14 or a disabled child under the age of 18, and disabled employees are entitled to 25 working days (for those who work five days per week) or 30 working days (for those who work six days per week) of annual leave. Next to that there are certain provisions which also are important even they do not relate directly to the duration of the minimum paid annual leave. Annual leave [continua ..]
Joining European Union in 1 May 2004 and requirements to adapt national labour laws introduced new aspects in national regulations including those concerning posted workers. Lithuania can be considered as “sending (posting) country” with small numbers of other EU workers posted to Lithuania and quite significant number of workers posted from Lithuania to other EU Member States. Thus, despite more then15 years of legal regulation and practise in the sphere of posting of workers, it can be stated that this issue is not popular among legal scholars, the case law is also small and fragmented. For the feast period, the Directive 96/71/EC was transposed into national law using two legal instruments: provisions of Lithuanian Labour Code stating the basic principle that additional guarantees to employees who are posted to the territory of the Republic of Lithuania by foreign state employers as well as to employees posted to abroad shall be set in special law. Thus, Lithuanian Labour Code provided only reference provision to the special law – Law on Guarantees for Posted Workers of the Republic of Lithuania. The main feature of the said regulation was that the law regulated both the working conditions of employees of foreign employers posted to the territory of Lithuania and employees posted from Lithuania to the territory of a foreign state. It was questioned whether such transposition of the provisions of the Directive, which is broader than its scope, [continua ..]