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Employment Law Review 2013-2014: Latvia

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What are the currently debated Latvian Amendments to Labour Law? 2013 has been a year without any general amendments to the employment law in Latvia, but many questions about implementation, so the work on Amendments to the Labour Law began. In August 2013 the Amendments to the Labour Law were presented to the Parliament of Latvia (hereinafter - Saeima), which were approved after the first reading. Read about these Amendments and the major reforms in the pipeline for the year ahead in the Employment Law Review 2013/2014 for Latvia.

With thanks to our Latvian member Raidla Lejins & Norcous Latvia. Originally posted on the Ius Laboris Knowledgebase: www.globalhrlaw.com

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Employment Law Review 2013-2014: Latvia

  1. 1. Employment Law Review 2013/2014: Latvia Publication Date: 21 March 2014 Member Firm(s): Raidla Lejins & Norcous Latvia Country: Latvia What significant changes to employment law in Latvia took effect in 2013? And what major reforms are in the pipeline for the year ahead? 2013 has been a year without any general amendments to the employment law in Latvia, but many questions about implementing new provisions in the already existing Labour Law were raised, so the work on Amendments to the Labour Law began. In August 2013 the Amendments to the Labour Law were presented to the Parliament of Latvia (hereinafter - Saeima), which were approved after the first reading. The legislative procedure of Latvia requires a draft law to pass three readings, so the Amendments currently are being debated in Saeima. It is expected that the Amendments will come in force in late 2014 or early 2015. Reforms implemented in 2013 Significant Case Law Findings Termination of employment contract with an employee who is a member of several trade unions. In the previous years there have been many misinterpretations of norms concerning termination of an employment contract with an employee who is a member of several trade unions. In the Judgment No. SKC-1144/2013 the Senate of Supreme Court ruled that the fact that the employee is a member of several trade unions does not in itself impose an obligation on the employer to obtain consent from each one of the trade unions. If an employer has received consent from one trade union to terminate the employment relationship with an employee-member of the trade union, the employer is entitled to assume that the opinion of this trade union is in accordance with that of all other trade unions of which the employee is a member. Obligation to provide the same or equivalent post after the return from parental leave. In August 2013 the CJEU made a decision on preliminary ruling to the questions referred to by the Supreme Court of Latvia. The CJEU found that Directive 96/34/EC on the framework agreement on parental leave concluded by UNICE, CEEP and the ETUC
  2. 2. 2 does not preclude the dismissal of a worker who has taken parental leave if this dismissal is not motivated by the use of the parental leave. In the context of the abolition of a post, the employer may provide an assessment of a worker on parental leave (even in his or her absence) with a view toward transferring that worker to an equivalent or similar post according to the employment contract of the particular employee. Regulation on Investigation of Workplace Accidents The Cabinet of Ministers of Latvia has improved procedural provisions of the regulation on the investigation of workplace accidents, thus reducing the administrative burden for employers and the State Labour Inspectorate. Effective January 2014 it is now easier for employers to conduct investigations of workplace accidents since it is no longer necessary to form investigation committees. Instead, employers will be able to decide which persons will conduct the investigation of a workplace accident. Previously, the State Labour Inspectorate also investigated workplace accidents involving Latvian employers’ employees who work abroad. But, as tested in practice, such investigations cannot be conducted accurately because the Labour Inspectorate has limited capacity to conduct investigations in another country. The new provisions provide that investigations will be performed only by a safety specialist appointed by the employer. What’s coming next? Amendments to the Labour Law The most significant changes arising from the Amendments to the Labour Law include changes regarding the terms of applying disciplinary penalties, payment of annual leave entitlements, extension of fixed-term employment contracts, as well as protection of those breastfeeding employees, and other amendments described below. Extension of employment contract entered for a fixed term. Under certain conditions provided in the law, the employer is entitled to enter into a fixed term contract with an employee. If, upon expiration of such a contract, the parties enter into a new contract and the time period before establishing a new employment relationship has not been interrupted for more than 30 consecutive days, it is regarded as an extension of the previous employment and thus could be regarded as being entered into for an unlimited period. The draft law proposes to extend for up to 60 days the period during which no repeated employment contract may be entered into
  3. 3. 3 between the same employee and employer. The purpose of this proposal is to reduce the possibilities for employers to circumvent the legal requirement to enter into contracts for an unlimited term. Extended term for fixed-term employment contracts. It is proposed that the maximum period allowed for entering into an employment contract for a fixed term is extended from three to five years. The purpose is to even up labour related costs in comparison with other countries where the maximum period for fixed-term contracts already is five years and thereby to improve the country’s competitiveness. Employment of members of Management Board. The draft law proposes amendments relating to members of the Management Board of a company. Current provisions of the Labour Law provide that an employment contract with Management Board members shall be entered into, unless they are employed on the basis of another contract governed by civil law. This requirement has raised many questions in practice, generally because the Commercial Law, which is the governing law in relation to commercial activity, does not have any provisions regarding contracts to be entered into with Management Board members. Thus, the proposed amendment would exclude from the Labour Law the requirement for an employment contract for Management Board members. Extended term for application of disciplinary penalty. The current regulation provides that a disciplinary sanction may be imposed not later than one month from the date the violation is detected, excluding the period of temporary incapacity of the employee as well as the period when the employee is on leave or does not perform work due to other justified cause, but not later than six months from the date the violation was committed. The proposed amendments would extend the period for up to 12 months. The proposed amendments refer to cases related to an employee’s long-term absence from work or situations where violations are discovered during internal or external periodic audits (revision, inventory, annual report, etc.) which in many cases are organized annually, thus a violation cannot be detected in six months. Another technical, but important, proposal is require employers to issue to the employee a written document concerning the imposed disciplinary sanction. Currently the Labour Law does not impose such an obligation, and employers tend to withhold such documentation. Such a situation reduces the employee’s ability to protect him- or herself. In order to balance an employee's ability to defend his or her rights with the need to ensure legal certainty, and taking into account the proposed
  4. 4. 4 requirement that an employer provide the employee a document concerning his or her disciplinary sanction, the draft law shortens the period of time for an employee to request revocation of a reproof/reprimand or dismissal from one year to one month. Shorter terms for collective redundancy procedures. Proposed amendments include a reduced period of time during which an employer who intends to carry out a collective redundancy shall notify the State Employment Agency and local government – from 45 days to 30. Similar changes are proposed in relation to an employer’s right to initiate a collective redundancy procedure after submission of its notice to the State Employment Agency, i.e., the time period is reduced from 45 to 30 days. These amendments were made to comply with the recent CJEU ruling No. C-44/08 concerning the interpretation of the Directive 98/59/EC on the approximation of the laws of the Member States relating to collective redundancies. Gender equality. The draft law restricts the length of the special maternity protection period with regard to breastfeeding. Currently, special maternity protection for breastfeeding employees is applicable to the entire period of breastfeeding, but the proposed amendments limit such protection until a child is two years old. Another amendment concerning this topic relates to the right of child-care leave. Currently, the legal framework provides that child-care leave is given only to the biological and adoptive parents, but amendments would also extend this right to the members of a foster family and to legal guardians. The amendments provide that the termination of the child-care leave ahead of time and the employee's return to work will be possible by mutual agreement between the employer and employee or by providing such terms in the collective agreement or the employment contract. The draft law also provides for exceptional cases where the return is possible by a simple statement from the employee (for example, in the case where a child has died). Notice of termination. While the current wording of the Labour Law provides a detailed description of issuance of an employer’s termination notice, it lacks regulation as to the means of issuance of the notice. In practice this causes quite a few problems when an employee, trying to avoid his or her termination, does not appear at work to collect the notice. Taking into account that a termination notice becomes valid from the moment it is provided to the other party, it is rather important that the
  5. 5. 5 moment of notification is made clear in the law. Hence, the amendments propose including in the Labour Law a new section dealing with the particularities of the notification procedure. In accordance with the proposed amendments the correspondence about the notice of termination may be conducted personally or by using post or messenger. Also e-mails signed with a secure digital signature may be used if the employer and employee have agreed to it in the employment contract. Payment for the annual leave. Proposed amendments are more flexible with respect to payment for the annual leave. Current Labour Law provisions establish that payment for the annual leave must be made not later than one day before the annual leave starts, but the new draft law would permit employees to request that payment for annual leave be made at another time, for example, along with the next payment of salary. Taking into account the resistance of the Trade Unions Association towards the proposed amendments, declaring such amendments are not in the interests of employees, the wording of the currently proposed amendments will most likely slightly change in the course of further review by Saeima during the second and third reading. Originally posted on the Ius Laboris Knowledge Base: www.globalhrlaw.com About Ius Laboris Ius Laboris is an alliance of law firms offering employers cross-border employment and pensions law advice. It has 1,300 specialist HR lawyers in over 150 cities and 44 countries. Ius Laboris offers access to the best local HR law experts in one global team with 20% more ranked employment lawyers (Chambers & Partners, November 2013) than any other global HR legal services organisation. Further, Ius Laboris has 50% more recommended lawyers than its nearest rival in a recent survey in PLC's employment law guide. Clients include many household names as well as multinational companies in all sectors ranging from energy, retail and technology to pharmaceuticals. For more information on Ius Laboris, please visit iuslaboris.com.

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