The Lithuanian Trade Union Confederation (LPSK) views the decision of the Vilnius City Municipality to dismiss the boards of five municipal companies and appoint new boards before 1 November, just before the provisions of the Labour Code on employee representation on company boards come into force, as a deliberate attempt to avoid the application of the new regulation.

We do not regard this action as merely a decision by the Vilnius City Municipality. A decision of such scale, taken immediately before the new regulation enters into force, signals to us that such conduct is being politically tolerated.

If the Government does not clearly distance itself from this precedent, trade unions will have grounds to interpret it as a political endorsement for other state- and municipally-owned companies to follow the same path.

We would then face a very clear situation: the Seimas grants employees the right to participate in company governance, while public-sector shareholders, immediately before this right comes into force, demonstrate how its implementation can be postponed for another board term.

This is no longer a matter of legal technicalities. It is a question of the attitude towards employees and social partnership.

For many years, trade unions have consistently pursued the path of social dialogue. The inclusion of employee representatives on the boards of state- and municipally-owned companies was one of the most important steps towards a higher level of social dialogue – from formal information and consultation to genuine employee participation in decision-making.

What is now being demonstrated openly is how much such partnership is actually valued.

If, immediately before a new employee right comes into force, efforts are focused not on finding ways to implement it as effectively as possible, but on finding a way to avoid its application, we have to acknowledge the reality: one side of the social dialogue is offering partnership, while the other is choosing a position of power.

In such a case, trade unions will also have to reconsider their means of action.

If employees are not to be treated as partners when decisions are being made, we will have to initiate substantial liberalisation of the regulation of strikes and seek to ensure that Lithuanian workers have a genuine opportunity to defend their interests through collective action.

It is not possible to speak about strengthening social dialogue, the European social model and employee participation on the one hand, and then, the next day, look for legal loopholes to render a newly granted employee right ineffective for several more years.

“We proposed speaking the language of partnership. If the government chooses the language of power, trade unions also know how to speak it.

That is why we are now awaiting a very clear response from the government: is this a decision by the Vilnius City Municipality from which the government distances itself, or is it a new standard showing state and municipal companies how to avoid employee representation on their boards? Our further actions will depend on the answer to this question,” says LPSK Acting President Dalia Jakutavičė.

LPSK also draws attention to the municipality’s arguments concerning the competence and independence of employee representatives and potential conflicts of interest. Employee representation does not in itself imply either a lack of competence or a conflict of interest. Employee representatives on company boards must act in the interests of the company, just like other board members, while also ensuring that employees’ perspectives are heard when strategic decisions are made.

Employee representation is not a threat to good corporate governance – the threat lies in attempts to avoid it.