Collective bargaining in Lithuania: current situation and priorities

Collective bargaining is on the rise due to the new Labour Code but it does not reach its full potential in Lithuania. Workers’ coverage of sectoral collective agreements is quite low. Statistics by the Organization for Economic Cooperation and Development shows that the coverage is around 8 percent (2017/ note: this indicator is arguable). There are many flaws in the collective bargaining system in Lithuania. Very often it lacks a spirit of a constructive social partnership and it is seen as a formality.

The most urgent problems of the Lithuanian Trade Union Confederation (LPSK) in this area are the following:

  • A lack of quality collective agreements in the private sector. Private enterprises are not keen on signing collective agreements. It is clear that the biggest advancement is made in the public sector. Mostly, collective agreements in Lithuanian private sector are declarative and have no real impact. One of the biggest challenges is that the business does not want to include anything related to binding financial commitments into the collective agreements. It is complicated to bargain for higher salaries. This is a big problem because wages in Lithuania are among the lowest in the European Union. LPSK is looking forward to establishing a system, where negotiations would be held between employers and trade unions (in case they are present in the company), instead of work councils.

  • There is a need for adequate monitoring. The new National collective agreement regarding the size of the base salary of employees in the public sector was signed. Lithuanian trade unions stress the need for adequate control of how it is implemented, especially regarding wage payment systems and their entrenchment in enterprises.

  • It is close to impossible to establish trade unions in some sectors. For example, the Lithuanian banking/financial sector is hostile to trade unions. All attempts to establish them were quickly suppressed. It is important to note that the biggest players are from the Scandinavian countries but in the Baltic states, they act differently than at home. Representation of employees at transnational enterprises is a growing challenge for LPSK. Supermarket chains (like „Maxima“, „Lidl“) are hostile to trade unions too. LPSK wants to launch an internal initiative so that our branch trade unions would identify all the transnational corporations in their sector and choose one or two of the highest importance to focus on. The goal would be to establish relations with the trade unions working in their affiliates abroad, get data regarding salaries (amounts and structure), seek unification of posts in different countries and coordinate positions and actions.

  • A new double employee representation system weakens the collective bargaining even further. In Lithuania workers are represented by trade unions, work councils or trustees. A right of collective bargaining belongs exclusively to trade unions but information and consultation are the main functions of work councils. (If more than 1/3 of workers are members of a trade union, work council is not established and all of its functions are given to a trade union. 1/3 of enterprise’s workers do not have to belong to one single trade union. Also, it is important to emphasize, that institutes of work councils and trustees in Lithuania are created artificially. The Lithuanian Trade Union Confederation seeks to change this system.

  • There is a need to pay more attention to freelancers and self-employed persons. In Lithuania 1/10 of all workers (around 150.000) are freelancers or self-employed. They face many challenges and are especially vulnerable. The Lithuanian Trade Union Confederation is committed to looking for opportunities on how to include them under the collective bargaining umbrella and enhance their social protection and benefits.

  • Capacity building stays a priority. There is a need to educate more trade unionists so that they would be more competent in collective bargaining on different levels. It is a big challenge, especially at the enterprise level.

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