Latvian labor law: Any need for further reform?

  • 2004-09-22
  • By Valters Kronbergs
In the European Union employment law is basically left up to the member states. It is not surprising, therefore, that we find considerable differences in employment law from country to country within the EU. Yet since the 1970s the "social Europe" advocates have been seeking to advance a single Pan-European employment framework, with a view to implementing the existing north European model of employer-restrictive employment law across the union.

The most recent example of this has been a proposal from the European Commission to limit Britain's ability to opt out of the EU's working-time directive. The approach in Britain has been to resist the EU's social and employment initiatives, seeing them as a barrier to employment market flexibility and growth. Attempts at curtailing the British opt-out has triggered a lively public debate over the proposals, with one British employer organization characterizing them as a totally unacceptable effort to "impose a Franco-German style of industrial relations through the back door."

In Latvia, these kinds of issues rarely receive any public attention. The prevailing view seems to be that since Latvia has basically harmonized its laws with the EU and a series of International Labor Organization conventions it ratified in the early 1990s, not much needs changing in the area of employment law.

That's why it was interesting to hear one Latvian business leader suggest recently that Latvia should cut back on the legal requirement of a four-week annual vacation. His logic was simple: If Latvia wants to make good on the government's stated objective of reaching the EU's average GDP level within 10 years, wishful thinking alone won't do it. Perhaps unsurprisingly, the idea of cutting back vacation entitlements did not get much support and isn't likely to go any further.

So is there anything left to improve in Latvia's labor and employment legal framework, or is it fine as it is?

One area where there is still a bit of a curiosity is the unenforceable "duty to bargain" with unions. In cases where an employer is faced with a certified union, he has a legal duty to negotiate with a view to concluding a collective agreement. Yet there is no real mechanism in place to bring closure to the process; if the parties are intransigent, they can endlessly go through the motions of negotiating but never reach an agreement. While this may please some employers who are unsympathetic to the idea of having a collective agreement, it still means that they have to show signs of negotiating 's whether they are doing so in earnest or not 's and that can amount to a considerable waste of time and resources.

A system of compulsory arbitration for first contracts would be one possible solution. Yet how would that be, for example, in a case where the union only has 25 percent support of the workforce, enough to get certified but not really representative of the entire group of employees? Maybe compulsory arbitration, combined with a majority support threshold (instead of just 25 percent), would be a better combination.

Another area of some concern is the fairly broad scope of jurisdiction of the labor inspectorate. While the inspectorate clearly has an important role to play in the enforcement of occupational.