Collective redundancy in Lithuania
Due to economic conditions sometimes it is required to relieve more than one employee at a time. Although these actions are necessary to preserve the business or reduce the expenditures, termination of multiple employment contracts is controlled by the authorities. It shall be noted that collective redundancy in Lithuania shall be completed following special rules which are provided in this article.
Definition of collective redundancy
According to the Art. 1301 of the Labour Code of the Republic of Lithuania (hereinafter – the Labour Code) collective redundancy is considered a situation when during the period of 30 days due to economic or technological reasons, structural reorganization of the company or other similar conditions which are not related to specific employee, employment contracts are terminated with certain amount of employees.
The amount of employees is determined by the size of the company. If a company has 20-99 employees, redundancy of 10 or more employees will be considered a collective redundancy. If a company has 100-299 employees, redundancy of 10% of the employees will be considered a collective redundancy. In case of a company with 300 employees, termination of contracts with 30 or more employees will be considered a collective redundancy.
If the employment contract with an employee is terminated because of the reasons related to that specific employee, for example, breach of the rules or employment contract, such contract termination is not considered a collective redundancy.
Also if a fixed term or seasonal contract is terminated because the contract has reached its expiration date, it shall not be considered a collective redundancy.
According to the Art. 1301 of the Labour Code in order to complete a collective redundancy the employer shall consult the representatives of employees. After these consultations, the employer shall notify the local Labour Exchange office and the employees. The notification to the Labour Exchange office shall be submitted before the notifications are submitted to the employees.
According to the Art. 129 and Art. 130 of the Labour Code if the employment contracts are terminated because of to economic (technological reasons) or structural reorganization, the employees shall be notified 2 months before the termination. Elderly employees, employees under 18 years old, disabled employees or employees which have children under 14 years old shall be notified 4 months before contract termination.
If the employer fails to comply with obligation to consult with the representatives of the employees or to notify the Labour Exchange office in timely manner, collective redundancy cannot be carried out, otherwise the collective redundancy is deemed illegal.
Jovita Valatkaite, lawyer of the Gencs Valters Law Firm in Vilnius
Practising in fields of Reduction of staff in Latvia, Lithuania and Estonia
T: +370 52 61 10 00
F: +370 52 61 11 00