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COUNTRY OVERVIEW

There is no existing employee board-level representation in Lithuania and the transposition of the directive evoked little interest.

For further information on the SE legislation, such as the choice of SNB members, click on the more button.

There is no existing board-level representation for employees in companies in Lithuania. The draft legislation on the transposition of the directive on employee involvement in European companies was presented to the Tripartite Council (LRTT), in which both unions and employers are represented, where a text was agreed in January 2005 before being sent back to the government. Although there was some comment on the process in specialist newsletters, there was no public debate.

Form of transposition

Directive was transposed by law in May 2005 more than seven months after the October 2004 deadline

The directive on employee involvement in European companies was transposed through the following legislation passed on 12 May 2005: Law of the Republic of Lithuania on the involvement of employees in decision making in European companies (Lietuvos Respublikos Įstatymas dėl darbuotojų dalyvavimo priimant sprendimus Europos bendrovėse).

Separate legislation adapting Lithuanian company legislation to the Regulation on European companies was passed in April 2004.

Special negotiating body (SNB)

Selection of national members

Lithuanian SNB members are in the first instance chosen by the existing employee representatives – either unions or, if there are no unions, works councils. Only if there are no employee representatives or they cannot agree, are the SNB members chosen by a general meeting of all the employees. Similar arrangements apply where several Lithuanian companies are involved, if there are no existing employee representatives or they cannot agree, although this time a delegate conference elects the SNB members.

The legislation states, as a starting point, that Lithuanian members of the SNB should be appointed by employees or their representatives and that, if there are several companies and/or workplaces involved in Lithuania, the employees or their representatives should reach a joint agreement on Lithuanian SNB members. Employee representatives in Lithuania are either the unions at the workplace or – if there are no unions – a works council elected by all employees.

The legislation implicitly gives the employee representatives the first chance to choose the SNB members. It is only if the employee representatives fail to appoint SNB members within 30 days of being informed of management’s intention to set up a European company, that Lithuanian SNB members are elected through a secret ballot at a general meeting of all employees. This general meeting may be called by any employee representative. Half of the employees must be present for the decision of the general meeting to be valid, although this quorum is reduced to a quarter at a second meeting if too few attend the first one.

The same procedure also applies if there are no employee representatives, when Lithuanian SNB members are again elected at a general meeting of all employees. However, in this case the general meeting is called by management.

If there are several companies or workplaces involved and they all have workplace representatives, then their workplace representatives should agree on the Lithuanian SNB. However, if they cannot agree, or there are some companies/workplaces without employee representatives, then a delegate conference is called by management, with each delegate representing 10 employees. This delegate conference then elects the Lithuanian SNB members in a secret ballot. Two-thirds of the delegates must be present for the decision of the conference to be valid, although this quorum is reduced to a half if the first conference is too small (Article 11).

External trade union representatives

The presence of external union representatives on the SNB is neither specifically prohibited nor specifically permitted by the Lithuanian legislation.

The section of the Lithuanian legislation on the choice of the Lithuanian members of the SNB does not refer to the issue as to whether or not they may be external union representatives (Article 11).

Financing of experts

Funding limited to a single expert.

The section of the Lithuanian legislation on funding limits the expenses covered by the participating companies to “only one expert”. It also states that the costs of travel, insurance, accommodation and subsistence of SNB members, and “the procedure for its reimbursement” should be set by national rules (Article 14).

Standard rules under the fallback procedure

Allocation of national seats on SE representative body

Lithuanian members of the SE representative body are chosen in the same way as Lithuanian members of the SNB – by the existing employee representatives, with elections – either at a general meeting or a delegate conference – only if there are no existing employee representatives, or they cannot agree.

Lithuanian members of the SE representative body, known in the Lithuanian legislation as the works council of the European Company (Europos bendrovės darbo tarybos) are chosen in the same way as Lithuanian members of the SNB. The consequence of this is that in the first instance they are chosen by the existing employee representatives – either unions or, if there are no unions, works councils. Only if there are no employee representatives, or they cannot agree, are the representative body members chosen by a general meeting of all the employees. Similar arrangements apply where several Lithuanian companies are involved, if there are no existing employee representatives or they cannot agree, although this time a delegate conference elects the members of the representative body (see section on SNB). As with the SNB members, the legislation does not state that members of the representative body must be employees of the company (Article 21).

Budget of representative body

The company should bear the costs of the representative body, including one expert.

The company is obliged to bear the costs of the representative body. However, as with the SNB, the Lithuanian legislation states that the amount of the expenditure relating to travel, insurance, accommodation and subsistence of representative body members should be set by national rules, as should the procedure for its reimbursement. The costs to be borne by the company include the expenses of “only one expert”, unless a larger number has been agreed (Article 28).

National procedure for the allocation of board seats

Employee representatives at board level from Lithuania are chosen in the same way as Lithuanian members of the SE representative body.

The Lithuanian legislation states simply that the same rules which apply for the choice of Lithuanian representative body members also apply to the choice of Lithuanian employee board-level representatives under the fallback procedure (see section on national seats on SE representative body). They are chosen in the first instance by the existing employee representatives and are elected, either by all employees or by delegates of all employees, only if there are no existing employee representatives, or they cannot agree (Article 31).

Misuse of procedures and structural change

Misuse of procedures

There should be new negotiations if changes shortly after an SE has been established show that the purpose of the SE was to deprive employees of their rights.

The Lithuanian legislation requires that there should be new negotiations if “shortly after the establishment of a European company, essential changes take place … which clearly show that the purpose of the establishment of the European company was to deprive the employees of the right to be involved in decision making”. Essential changes are defined as changes in the number of employees or the way the European company is incorporated “which would have extended the rights of the employees to be involved in the management of the company”, if they had happened beforehand. Shortly is not defined more precisely (Article 6).

Structural change

The Lithuanian legislation does not provide for renegotiation after structural change, other than shortly after the establishment of the European company, where structural changes are intended to deprive employees of their rights.

There is no automatic right to renegotiate the agreement if there are changes in the structure of the SE, except where “shortly after the establishment” of the company, it is clear that the procedures were misused. This means where it is clear that the purpose of establishing the SE was to deprive employees of their rights to be involved in company decision making.

Position of trade unions and employers

Unions and employers were consulted on the introduction of the legislation and they were broadly supportive of the proposals.

Unions and employers were involved in the discussions on the transposition of the directive on employee involvement in European companies into Lithuanian law as a draft of the legislation was submitted to the tripartite council (LRTT). There were no major clashes on the issue with both sides broadly supporting the proposals.

L. Fulton (2008) Anchoring the European Company in National Law - Country Overviews (online publication, prepared for worker-participation.eu)

Alle Lithuania