Vytautas Žukauskas. Employee – a weaker party?

Trade unions in the Tripartite Council suggest introducing a provision to the new Labour Code which stipulates that an employee is always a weaker party in the employment relationships. This view perfectly sums up the fundamental problems of the current Labour Code: the stringent labour relationship regulations are, the better it is, because an employer allegedly exploits his employees. Such attitude does not imply any possibilities to reach an agreement between the parties concerned. If the new Labour Code is to be amended under this view, it may not have anything good left in it.

Different views towards labour relationships in Lithuania are encouraging. In 2013 the number of trade union members was 98,800 which corresponds 5.4% of the total working-age population. Only a minority of employees perceive their employer as an enemy and, therefore, the representation of employees’ interests does not imply the suppression of an employer by means of the Labour Code.

We must realize that stringent labour market regulation only distances Lithuania from the enviable Western European and Scandinavian wages. The current labour code is among the stringent in the European Union. For example, Lithuania is the leading country in terms of dismissal-related expenses. The average cost of dismissal is 25 weeks of his/her labour, compared to the EU average of 13. The harder it is to dismiss an employee, the less are willing to hire him.

Employees are not protected by the Labour Code, because if they were, they would be the safest in Lithuania. They are safe when there is a demand and competition between different employers. Further ignorance of the fact that strict regulation does not create incentives to hire and invest will never allow us to reach favourable conditions for employees. The current Labour Code creates an image of a passive, bullied, incapable of protecting his interests and having no choices, employee. Even if it is the situation of some (in the public sector, for example), a strict Labour Code only deepens the problem rather than solving it.

Employees’ choices are restricted, because stringent labour regulations decrease the number of jobs. Low wages result from low levels of investment and labour productivity. In general, employees’ possibilities to negotiate with employers are becoming purely theoretical, because everything is already regulated. Defended by the Labour Code, employees become hostages of strict regulation. Frequently, unemployment is the safety implied.

The new Labour Code is a major step forward, but we should not delude ourselves into thinking that it has reached the pinnacle of the flexibility of labour relations. Despite that, the adoption of the proposed regulation will bring us a little bit closer to other EU countries that have much flexible labour regulation. A new attitude towards labour relations is necessary to have regulation which is in line with today’s reality and is less similar to that of LSSR (The Lithuanian Soviet Socialist Republic), from which the current Code is not so distinct. Normal employee-employer relationships are possible. This works in practice and should be enshrined in law.