After six months of debates, Lithuania’s Seimas (parliament) on Tuesday voted on a new and highly disputed Labour Code, which, if signed into law by President Dalia Grybauskaitė, will come into effect in 2017.

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© DELFI / Šarūnas Mažeika

The new Labor Code with accompanying legislative amendments is one of seven packages of the so-called new social model, which aims to improve the regulation of labour relations.

In particular, the new Labor Code simplifies dismissal procedures and reduces severance payments. Employers will now be able to dismiss workers very quickly without specifying the reason and with a severance pay of up to six months salary.

In addition, the maximum overtime hours allowed per year increase to 180, from current 120.

The Labour Code also provides for the possibility to conclude permanent, fixed-term, temporary agency, apprenticeship, project work, job sharing, employee sharing and seasonal job contracts.

The government hopes that the new Labour Code and the laws reforming the social insurance fund (Sodra) will come into effect from early 2017.

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