Employee protection or medieval inquisition?

Unemployment in Lithuania has been declining steadily over the past decade, except during the pandemic. The number of job vacancies has also increased steadily. Increasingly, what we hear in the public sphere is not about workers' difficulties in finding a job, but about employers' challenges in attracting or retaining workers.

Teleworking, incentive travel, health insurance - these are just a few of the ways employers try to "please" their employees. The advantage of timely and official salaries, highlighted by employers, has become a mockery of the dawn of independence.

"Meanwhile, the Labour Code of the Republic of Lithuaniacontinues to live successfully in the spirit of the early 21st century, when it was necessary to use extremely harsh measures to protect the "weak and abused" worker. Today's labour market makes it necessary to seriously reconsider the concept of the employee as a weak party," says Laurynas Staniulis, partner at the law firm AVOCAD.

One of the most serious problems in today's labour market is the employer's ability to dismiss an employee. Dismissal of an employee is one of the most difficult or expensive risks to manage and can cost more than 12 months' salary.

The LC provides that if the dismissal of a worker is found to be unfair, the worker is entitled to compensation for the entire period during which the dispute between the worker and the employer over the lawfulness of the dismissal is pending, up to a maximum of 12 months. As court proceedings in Lithuania are not fast, as a rule, the case almost always takes more than a year to be heard. As a result, if an employee's dismissal is found to be unfair, the compensation awarded to the employee is usually 12 months' salary, regardless of whether or not the employee worked during that period.

This is fundamentally at odds with the essence of compensation, which aims to cover the loss of income suffered by the worker when he or she is dismissed and loses income. In the meantime, it is rare for anyone not to have found a new job, and often to have been employed practically since the dismissal. In such a case, if the court awards the employee the maximum compensation, the question arises - is it compensation for the employee or a penalty for the employer?

It is not the institution of compensation itself that is being questioned, but the need for a personalised approach to cases. If the court were to take into account the fact that the worker was unfairly dismissed but found a new position relatively quickly, the compensation to be awarded should be calculated exclusively for the period during which the worker had no earnings, thus compensating the worker for the damage suffered by him.

Inflexible interpretation of the provisions of the Labour Code on compensation to an employee in case of unfair dismissal, contrary to the objective of preventing employer abuse, often creates room for employers who seek ways to avoid dismissal of an employee at the initiative of the employer and to "force" the employee to submit a request themselves. Such attempts can take the form of worsening working conditions, mobbing, etc. Meanwhile, honest employers, whose values and business ethics do not allow them to use similar methods, are forced to risk being penalised for dismissing an employee under the Labour Code if some procedural irregularity leads to the dismissal being found inappropriate.

Data from the State Labour Inspectorate for the first quarter of 2024 show that, although dismissal disputes account for only 8% of the total number of labour disputes, labour disputes concerning the unlawful dismissal of an employee are the second most frequent. This only confirms that the problem is of great importance.

Is it not time to adapt the regulation, interpretation and application of labour relations to today's rapidly changing labour market?