Amendments of fixed-term employment contract regulation

  • 2010-11-10
  • By Laima Platūkytė, Associate Lawyer

ECOVIS Miškinis, Kvainauskas ir partneriai advokatų kontora

On August 1, 2010, the amendments to the Labor Code of the Republic of Lithuania (hereinafter – Labor Code) took effect. The most important of them is temporary and associated with the fixed-term employment contracts.
Earlier, the Labor Code prohibited concluding a fixed-term employment contract if the work was of a permanent nature, unless it was provided for by the law or collective agreements. After the amendments, a fixed-term contract can be concluded even for work of a permanent nature if an employee is recruited to a newly created workplace.

However, the restrictions of its application should be noted: 1) newly created workplaces are considered to be those which are created after August 1, 2010; 2) the number of such fixed-term contracts in the company shall not exceed 50 percent of its contracts in total; 3) a fixed-term contract of this kind cannot be concluded with an employee who worked in the company before, and with whom employment was terminated after  August 1, 2010, by the agreement between the parties or by the initiative of an employer without any fault on the part of an employee; 4) the term of such a contract can last up to 2 years, but no longer than till July 31, 2012.

After August 31, 2012, the previous regulations of prohibition to conclude a fixed-term employment contract for work of a permanent nature will take effect again, and all the valid employment contracts made on the grounds of this amendment will be automatically considered as contracts of an indefinite-term.
In conclusion, it should be noted that the new amendment won’t bring substantial changes to the labor market, but it can certainly be considered as an attempt to make it more flexible.