New legislation on Temporary Employment

  • 2011-06-08
  • By Ph.D. Tomas Bagdanskis, Attorney at Law

Professional Law Partnership „Bagdanskis iLAW“
[email protected]

On 19 May 2011, the Lithuanian Parliament adopted the Law on Temporary Agency Employment to implement the EU Directive on temporary agency work. Up to now there has been no special regulations for the so called “employee rent”, although Lithuanian companies have been using such service for a long time. Despite this, opinions have been voiced in public debates that temporary agency employment is illegal and this, of course, could have made it look suspicious for business people and prevented them from using such a staff management tool. After the law comes into effect, this problem will end.
The law basically followed the recommendations of the Directive without setting additional restrictions. One may assess it positively because temporary employment is not the single alternative. If improper decision is adopted, businesses would choose alternatives of service provision or contract relations (sometimes even illegal work).

The Law on Temporary Agency Employment lays down the peculiarities of employment relationship between temporary agency workers and a temporary-work agency, such as remuneration to temporary agency workers during non-working periods between employment; working and employment conditions during the period at the user undertaking; rights and duties of persons participating in temporary agency employment relations establishing the obligation of user undertakings to ensure safe and healthy working conditions; responsibility for the damage caused, etc. Employment agencies will provide temporary agency workers with social insurance under the same conditions as other workers are insured.

Temporary agency workers will be subject to the same conditions as permanent workers of employment agency clients are regarding working and leisure time regime and work safety. Temporary agency workers will also be able to use all conveniences or infrastructure present in the workplace (for instance, cafeteria, child care and transportation services) and will have access to the same conditions as others workers.

Employment agencies must provide the information on started temporary agency employment activities and the number of temporary workers to State Labour Inspectorate of the Republic of Lithuania in the procedure and time period set by the Government of the Republic of Lithuania or its authorised institution. This means that no licence or guarantee fund for the agency in order to start activity is required.
By the amendment of the Labor Code, the following term will be revised: a “temporary” employment contract will be changed to a “short-term” employment contract.

The adoption of the law will ensure more transparent and better business conditions; businesses will be able to use labour force more flexibly and at the same time to ensure the competitiveness of the Lithuanian economy. In addition, this will ensure safety to temporary workers themselves who sometimes used to look at this form of employment with distrust.
We hope that temporary agency employment will contribute to creation of new jobs that would not have been created otherwise, and reduce emigration by providing Lithuanian people (especially to youth having little experience) with employment opportunities in Lithuania.

I believe that legal regulation will play an important role in reducing unemployment and illegal employment. For example, according to the Italian experience, greater restrictions for the temporary employment sector have lead to an increase in illegal work, and vice versa, after restrictions were lifted, illegal employment decreased.

According to the data of the International Confederation of Private Employment Agencies, the average duration of the employment of a temporary agency worker is from one to three months. According to the data of the Association of Temporary-Work Agencies, the agencies belonging to the association employ temporary workers for 2 to 3 months on average. After the first employment contract expires, the majority of temporary agency workers are re-employed at the same temporary-work agency. On average, 80 percent of temporary agency workers are re-employed. The number of temporary agency workers in Lithuania account for 0.1% of total employees; meanwhile the European average is 1.5%.
The Law on Temporary Agency Employment will enter into force on 1 December 2011.

Professional Law Partnership „Bagdanskis iLAW“
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[email protected]