LAW

ON

SUPPORT OF THE UNEMPLOYED

13 December 1990 No. I-864

Vilnius

(As amended by 15 January 1998 No. VIII-608)

The law of the Republic of Lithuania on Support of the Unemployed, together with other laws regulating labour relations, establishes state guarantees of the constitutional right of citizens of the Republic of Lithuania to work and choice of occupation.

Chapter I

GENERAL PROVISIONS

Article 1. Employment of Citizens of the Republic of Lithuania

Citizens of the Republic of Lithuania shall have the right to freely choose a job or engage in other activities not prohibited under law.

The rights and duties related to the employment of citizens of the Republic of Lithuania in foreign countries shall be established by the laws of those countries, unless bilateral agreements provide otherwise.

Article 2. Applicability of the Law to Foreign Nationals and Stateless Persons

This Law shall be applicable to foreign nationals and stateless persons in the general manner, except for the cases regulated by separate laws or international agreements.

Article 3. Implementation of the Right to Work

Citizens shall implement their right to work either by directly applying to employers or through the mediation of the labour exchange. Employment contracts shall be concluded by agreement between the citizen and the employer according to the procedure established by law.

Citizens may choose not to work.

Article 4. The Right to be Employed under Contract

Citizens may conclude, in the manner prescribed by law, employment contracts with employers in other countries or in places other than the permanent place of residence of the person who concludes the contract.

If such a contract is concluded through the labour exchange, the procedure of compensation of expenses incurred thereby and also additional related expenses shall be assessed by the Government of the Republic of Lithuania.

Mediating the employment of citizens abroad is the exclusive right of the State which shall be implemented by the labour exchange of Lithuania. Other organisations may mediate the employment of citizens abroad only with appropriate authorisation (licences).

Authorisation (licences) shall be issued by the Ministry of Social Security and Labour of the Republic of Lithuania.

Article 5. The Unemployed

Capable of work individuals within working age who are out of work shall be considered as unemployed if they are not full-time students at educational institutions and have registered with the national labour exchange of their place of residence as persons looking for jobs and ready to go into vocational training.

The procedure of registration of the unemployed, also the manner of extending and paying unemployment benefits shall be laid down by the Ministry of Social Security and Labour of the Republic of Lithuania.

Chapter II

EMPLOYMENT RIGHTS AND GUARANTEES OF CITIZENS

Article 6. State Guarantees of Employment

In cases provided by this Law, the State shall guarantee the citizens:

free vocational counselling and consultation services, as well as information concerning available jobs;

free labour exchange services in looking for work and going into job;

free vocational training facilities in the event of unemployment;

the possibility, in the event of unemployment, to perform public works and works financed from the Employment Fund; and

unemployment benefit.

Article 7. Employment Programmes and Additional Guarantees

If necessary, the labour exchange of Lithuania shall prepare national or, together with local governments, territorial programmes of employment of the population, which shall be approved by central or local government institutions and financed from the appropriate budgets. Such programmes shall be prepared primarily for the protection against unemployment of individuals who are within the category of most socially vulnerable, as specified under Article 8 of this Law. In order to provide such individuals with work, local governments, on the recommendation of the labour exchange, shall prescribe for the employers employment or creation of new jobs quotas of up to 5 percent of the total number of employees.

Employers who fail to comply with the employment or job quota requirement shall in every instance make payments into the Employment Fund in the amount of 12 official average gross monthly wages of the sector’s employees, except in cases where the labour exchange failed to apply for the employment of citizens specified in Article 8 of this Law.

The funds shall be used at the discretion of local governments for the financing of programmes specified in paragraph 1 hereof.

Where additional funds are required for the creation of jobs or for the modification of the existing jobs in order to employ, in the manner specified in paragraph 1 hereof, the unemployed individuals with job placements from the labour exchange, the Employment Fund shall pay the employers a lump-sum compensation:

in the amount of up to 24 minimum monthly wages per one work place intended for persons with disabilities;

in the amount of up to 12 monthly wages per one work place intended for other unemployed individuals specified in Article 8 of this Law.

Article 8.	Individuals to whom Additional Guarantees of Employment
are Applicable

Additional employment guarantees shall apply to:

persons under 18 years of age;

women with children under 14 years of age and men who are single parents of children of the above age;

persons who are within 5 years of becoming eligible to receive full old-age pension;

persons who have been released from places of imprisonment;

persons with disabilities, in accordance with the procedure provided under the Law of the Republic of Lithuania on the Social Integration of Disabled Persons.

Article 9.	Employer’s Obligation to Give Employees Notice of Termination
of Employment under Contract

If the employee is not at fault, the employer may on his own initiative terminate an employment contract of indefinite duration according to the procedure prescribed under law only after a 2-month written notice. A 4-month written notice must be given to employees who are within 5 years of becoming eligible to receive full old-age pension, minors under the age of 18 years, persons with disabilities, women with children under 14 years of age, and men who are single parents of children under the age of 14 years.

Employment contracts or collective agreements may prescribe longer periods of notice.

Periods of notice established under paragraph 1 hereof shall also apply for the termination of fixed-term employment contracts.

In cases where the time period until the expiry of a fixed-term employment contract is less than the period of notice prescribed hereunder, employers may dismiss employees on their own initiative when the employees are not at fault only upon the expiry of the employment contract.

If an employee is dismissed prior to the expiry of the period of notice, the date of dismissal shall be postponed to the date of expiry of the period of notice.

The employer may not on his own initiative terminate employment contracts with employees specified in Article 8 of this Law, if the employees are not at fault and their number in the total number of the employees is less than employment or new jobs creation quotas prescribed by local governments.

Article 10. Obligations of the Employer when Dismissing a Group of Employees

Employers who are reducing the number of employees according to the procedure prescribed by law or who are closing operations of a business, institution or organisation and by reason thereof are planning to dismiss, within 30 days, a group of employees
(10 or more employees in enterprises, institutions and organisations which employ up to 100 people, or more than 10 percent of the employees in enterprises, institutions or organisations which employ more than 100 people) must notify the labour exchange and local governments of such plans 3 months in advance.

Local governments, on the recommendation of the labour exchange, may suspend the dismissal of employees for up to 6 weeks. Part of the expenses related thereto may be reimbursed for the employers from the Employment Fund or local government budgets.

If an employer dismisses a group of employees without complying with the procedure established in paragraph 1 hereof, the employees’ dates of dismissal may be moved to the date when the period of notice was to have expired.

Article 11. Registration of Available Jobs

Employers must register available jobs with the labour exchange which must publicly announce the received information. On the decision of the labour exchange, employers who violate the available jobs registration procedure shall pay into the Employment Fund a penalty equalling one official average gross monthly wage of the employees for each unregistered available job.

The registration procedure shall be established by the Ministry of Social Security and Labour of the Republic of Lithuania.

Chapter III

ECONOMIC PREREQUISITES OF EMPLOYMENT OF THE POPULATION

Article 12. The Employment Fund

The Employment Fund shall be set up for financing the population employment measures.

The resources of the Employment Fund shall comprise unemployment insurance contributions compulsory to the employers, and also other funds specified in Article
13 of this Law.

Compulsory unemployment contributions are a segment of compulsory state social insurance contributions payable according to insurance rates, the amount whereof is every year fixed by the Government of the Republic of Lithuania when approving the State Social Insurance Budget Fund.

The State Social Insurance Fund Board shall by the 25th day of each month transfer to the Employment Fund deducted amounts prescribed by the Government of the Republic of Lithuania - quarterly 1/3 of the amount provided for the purpose in the state social insurance budget. At the close of each quarter the above deductions shall be recalculated based on the actually received amounts of the insurers’ contributions and the additional underpaid amounts shall be transferred together with the current payments, whereas the overpaid amounts shall be deducted from the current payments.

The Employment Fund expenses shall comprise resources earmarked for the financing of measures under Article 14 and for the building up of the Employment Fund reserve where up to 20% of the annual Employment Fund resources are accumulated.

The procedure for establishing and using the Employment Fund shall be laid down and its budget shall be approved by the Employment Council at the Ministry of Social Security and Labour of the Republic of Lithuania. The Council shall be headed by the Minister or the Council member authorised by him. The Council shall consist of 15 equal members, equally representing the organisations of employees (trade unions, federations, associations, etc.) and employers (federations, associations, etc.), and also institutions of state administration. The representatives of employees and employers shall be delegated by the organisations which they represent, whereas the representatives of institutions of state administration shall be appointed by the Government of the Republic of Lithuania.

The Ministry of Social Security and Labour of the Republic of Lithuania shall manage the Employment Fund and inform the public of its application. The regulations of the Employment Council shall be approved by the Government.

Article 13. Financial Resources of the Employment Fund

The Employment Fund shall consist of:

the employers’ compulsory unemployment insurance contributions;

charitable contributions from legal and natural persons;

the income of the labour exchange;

additional payments of employers, as specified in Articles 7 and 11 of this Law;

subsidies from the state budget; and

other income.

The State shall be the guarantor of the Employment Fund.

Article 14. Use of Employment Fund Resources

Employment Fund resources shall be used for:

financing vocational training of the unemployed and of the employees given notice of the termination of employment in the manner set forth in Articles 9 and 10 of this Law;

financing population employment programmes;

creating additional jobs for the employment of population groups specified in Article 8 of this Law;

compensating in part the employers’ expenses related to the suspension of employee dismissal under Article 10 of this Law;

financing the works financed from the Employment Fund;

financing public works;

paying unemployment benefits;

extending loans to the unemployed desirous of setting up their own business;

financing the activities of the labour exchange of Lithuania and training service of Lithuania’s labour market;

reserve fund which is used for financing measures performed in a centralised manner.

Chapter IV

Social Guarantees for the Unemployed Citizens

Article 15. Entitlement to Unemployment Benefits

Unemployed individuals with an at least 24-month state social insurance record within the 3 years immediately preceding their registration with the labour exchange shall be entitled to unemployment benefit provided that the labour exchange did not offer them employment which would suit their particular skills and state of health, or any opportunity of vocational training.

The unemployed individuals who for valid reasons specified in paragraph 5 of Article 161 of this Law did not have the state social insurance record required under paragraph 1 hereof prior to registering with the labour exchange shall also be entitled to unemployment benefit.

The unemployed individuals who do not have the state social insurance record specified in paragraph 1 hereof which would entitle them to unemployment benefit shall become entitled to it following their placement by the labour exchange in public works or works financed from the Employment Fund or completion of vocational training within the 12 months after their registration with the labour exchange, provided that the total duration of the work and studies period was not less than 180 calendar days or if its duration equalled the time period they still lack for the required state social insurance record if this is not more than 180 calendar days.

The procedure under paragraph 3 hereof shall also be applicable to the unemployed who have not been extended unemployment benefit under Article 17 of this Law, or its payment has been terminated, or the period of its payment has expired.

Article 16. Unemployment Benefit

The labour exchange shall extend and pay in the established manner unemployment benefit to the unemployed individuals:

1) specified in paragraphs 1 (except for subparagraph 2) and 2 of Article 15 of this Law on the 8th day following their registration with the labour exchange;

2) specified in paragraph 1 of Article 15 of this Law, dismissed from work on the employee’s application (Law on the Employment Contract, Article 28, paragraph 1), by agreement between the parties (Law on the Employment Contract, Article 27), dismissed from work on the employer’s initiative (Law on the Employment Contract, Article 29, paragraphs 6-12), also upon the expiry of the employment contract under Article 26, paragraphs 14-20 - upon the expiry of 3 months after registration with the labour exchange;

3) specified in paragraphs 3 and 4 of Article 15 of this Law after they satisfy the conditions laid down in paragraph 3 of Article 15.

The benefit shall be payable on a monthly basis but for not longer than 6 months in a 12-month period. Excluded from the period of entitlement for the unemployment benefit shall be the period the unemployed individual worked in public works or performed the work financed from the Employment Fund or was enrolled on a vocational training programme.

For individuals who are close to pensionable age (who are within five years of becoming eligible to receive full old-age pension) the payment of unemployment benefit shall be extended for two more months.

Article 161. The Amount of Unemployment Benefit

The amount of unemployment benefit shall depend on the unemployed individual’s state social insurance record and reasons of loss of work.

For unemployed individuals entitled to unemployment benefit under paragraph
1 of Article 15 of this Law the amount of unemployment benefit shall be calculated according to the following formula:

B=SI + (2* MLS - SI) * (r/R), where

B - means Unemployment Benefit;

SI - means State Supported Income approved by the Government for the month for which the unemployment benefit is paid;

MLS - means Minimum Living Standard approved by the Government for the month for which the unemployment benefit is paid;

r - means the unemployed individual’s state social insurance record;

R - means the insurance record denominator. R = 25 years. The insurance record of such duration entitles the unemployed individual to the maximum amount of the unemployment benefit.

In any case the unemployment benefit may not be less than the state supported income approved by the Government and may not exceed the amount of two MLSs.

The unemployment benefit calculated according to the above formula shall be paid to unemployed individuals dismissed from work:

1) on the employer’s initiative (Law on the Employment Contract, Article 29, paragraphs 1-12);

2) on the employer’s will (Law on the Employment Contract, Article 30);

3) under the Law on the Employment Contract, Article 26, subparagraph 6, when the employee is deprived of the rights to employment in certain jobs through no fault of his, and under subparagraphs 7-11 and 14-20 of the Article;

4) on the employee’s application because of circumstances out of his control (Law on the Employment Contract, Article 28);

5) on the employee’s application (Law on the Employment Contract, Article 28, paragraphs 1 and 2);

6) by agreement between the parties (Law on the Employment Contract, Article 27);

7) self-employed individuals.

Unemployed individuals specified in paragraph 2 of Article 15 of the Law on the Employment Contract shall be paid unemployment benefit in the amount of state supported income. The benefit of the above amount shall be paid to unemployed individuals who do not have the full required state social insurance record for valid reasons:

to individuals dismissed from work:

1) on the employer’s initiative (Law on the Employment Contract, Article 29, subparagraphs 1-5);

2) on the employer’s will (Law on the Employment Contract, Article 30);

3) under the Law on the Employment Contract, Article 26, subparagraph 6, where the employee’s fault is not the reason for depriving him of the rights to be employed in certain jobs, and also under subparagraphs 7-11 of the Article;

4) on the employee’s application by reason of circumstances out of his control (Law on the Employment Contract, Article 281);

5) on the employee’s application (Law on the Employment Contract, Article 28, paragraph 2);

also to unemployed individuals:

1) who are guardians of persons declared legally incapable, who nurse disabled persons of group 1 or group 2 (members of their families and close relatives);

2) who have been discharged from the national defence service (servicemen of active service), if prior to their conscription they were not employed under employment contract;

3) who are graduates from vocational training schools, tertiary schools and institutions of higher education;

4) who have been released from places of confinement;

5) women with children under 8 years of age and men who are single parents of children of the above age.

Unemployment benefit of the above amount shall also be paid to the unemployed individuals specified in paragraphs 3 and 4 of Article 15 of this Law.

Unemployed individuals who receive pensions from the state or social insurance budget, the amount whereof is less than the unemployment benefit (training allowance) to which they are entitled shall be paid the difference between the unemployment benefit to which they are entitled and the received pension.

Article 17. Disqualification for Unemployment Benefits

An individual shall be disqualified for unemployment benefits if prior to the granting of unemployment benefit the unemployed individual refused to accept an offer of work which suits his professional qualifications and state of health, also if travel by urban or suburban transport to and from the place of offered work does not take more than
3 hours or 2 hours in case of women with children under 8 years of age and men who are single parents with children of the above age, or if he once refused an offer of enrolment on a vocational training programme in a profession in demand in the local labour market.

An individual shall also be disqualified for unemployment benefits if:

he fails to appear at the labour exchange at the prescribed time to accept an offer of work or enrolment on a vocational training programme;

he refuses a health check offered by the labour exchange in order to establish his fitness for work.

Article 18. Reduction, Suspension and Termination of Unemployment Benefits

Unemployment benefits shall be reduced by 50 percent for the unemployed individual who once refuses an offer of work under the conditions specified in paragraph 1 of Article 17 of this Law or once refuses an offer of vocational training.

The payment of unemployment benefit shall be suspended if the unemployed individual:

is a student and receives from the Employment Fund training allowance payable to unemployed individuals;

accepts placement in jobs financed from the Employment Fund.

Payment of unemployment benefit shall be terminated for a unemployed individual who:

twice within the period of payment of unemployment benefit refuses offers of work under the conditions specified in paragraph 1 of Article 17 of this Law and twice refuses offers of vocational training;

fails to appear, without a valid excuse, at the labour exchange at the prescribed time in order to accept an offer of work or enrolment on a vocational training programme.

Article 19.	Vocational Training of Unemployed Individuals and Employees
who Have Been Given a Notice of Dismissal

Unemployed individuals to whom the labour exchange is not in the position to offer, in the established manner, work suitable for their professional qualification and state of health, also unemployed individuals who lack adequate training may be placed into vocational training to acquire requisite skills meeting the local market demands or to upgrade their qualification.

During the period of training the unemployed individuals shall be paid training allowance payable to the unemployed in the amount of 1.3 of the received unemployment benefit, which may not exceed 2 MLSs.

Unemployed individuals who prior to their placement in training were not entitled to unemployment benefit shall be paid, during the training period, the training allowance of the unemployed in the amount of state supported income.

The Employment Fund resources shall be used to finance vocational training of unemployed individuals and pay the unemployed individuals’ training allowance for the maximum period of 6 months. In certain cases, where vocational training lasts longer, the financing of vocational training and payment of training allowance for the unemployed may be extended for up to 10 months on the proposal of the tripartite commission at the labour exchange.

Facilities of vocational training financed from the Employment Fund may also be provided to the employees who are given notice of the termination of employment contract under Articles 9 and 10 of this Law.

The provision with vocational counselling and training facilities of the unemployed individuals and employees who are given notice of dismissal shall be ensured by the Training Service of the Labour Exchange of Lithuania.

The procedure of vocational training and its financing from the Employment Fund shall be established by the Ministry of Social Security and Labour.

Article 20. Public Works

Temporary public works shall be organised for the unemployed and other persons who have registered with the labour exchange.

Public works shall be organised by the labour exchange together with local governments.

Citizens performing public works shall receive payment for the time of work which is calculated by applying the hourly payment which is not less than the minimum hourly wage fixed by the Government.

Individuals performing public works shall not be entitled to unemployment benefit if their wages are higher than the benefit. If the wage is lower than the received benefit, the difference between the wage and the benefit shall be paid by the labour exchange.

Persons employed for public works shall continue their registration with the labour exchange and the state employment and social guarantees prescribed by this and other laws shall be applicable to them.

The procedure for the performance of public works shall be established by the Government of the Republic of Lithuania or the institution authorised by it.

Article 201. Works Financed from the Employment Fund

Works financed from the Employment Fund shall be offered to the unemployed individuals specified in paragraphs 3 and 4 of Article 15 of this Law, also, according to Article 19, to individuals to whom the labour exchange is not in the position to offer a permanent job after their completion of a vocational training course.

The national labour exchange shall organise works financed from the Employment Fund for a maximum period of 6 months, concluding contracts with employers regarding the employment, by order of priority, first of all of the unemployed individuals who commence their labour activity, providing them with opportunities to acquire basic skills and helping them towards permanent employment. Should it transpire that additional vocational training is required for permanent employment, the duration of such works may be extended for up to 8 months.

Employers who, following the job placements of the labour exchange, employ unemployed individuals in works financed from the Employment Fund ,shall be reimbursed from the Employment Fund on a monthly basis for their expenses in the amount of minimum monthly wage and social insurance contribution calculated as payable for the amount.

The procedure of employment in the works financed from the Employment Fund shall be laid down by the Ministry of Social Security and Labour of the Republic of Lithuania.

Chapter V

THE LABOUR EXCHANGE OF LITHUANIA

Article 21. Structure of the Labour Exchange

State guarantees for the employment of the population shall be implemented in the labour market by the Labour Exchange of Lithuania at the Ministry of Social Security and Labour of the Republic of Lithuania . It consists of the national and local labour exchanges.

Tripartite commissions functioning on a voluntary basis shall be set up at the labour exchange for the consideration of issues concerning the population employment. The commissions shall consist of an equal number of equal members: representatives of the employees (trade unions, federations, associations, etc.), the employers (unions, associations, etc.), and representatives of public authorities. Representatives of employees and representatives of employers shall be delegated by the above organisations, whereas representatives of public authorities shall be appointed by the Government of the Republic of Lithuania and local governments.

The regulations of the Labour Exchange and of the tripartite commission shall be approved by the Government of the Republic of Lithuania.

Article 22. Functions of the Labour Exchange

The Labour Exchange shall:

analyse supply and demand of labour and forecast possible changes in the labour market;

register available jobs and unemployed individuals;

look for job openings and inform individuals seeking employment;

mediate the employment of citizens;

takes part in organising vocational training of the unemployed individuals and employees who are given notice of dismissal;

mediate the employment of citizens abroad;

dispose in the established manner of the financial resources received from the Employment Fund and publicly disclose the ways of their spending, also give recommendations concerning the application of the Employment Fund finances;

prepare national programmes and, together with local governments, territorial programmes of employment, intended primarily for those sections of the population which are not in the position to compete with other citizens in the labour market under equal conditions;

make recommendations to local governments for the suspension of employee dismissal or for the postponement of dismissal if there are no opportunities to employ the dismissed employees or to enrol them on a vocational training programme, or if an employer failed to timely inform the labour exchange of the dismissal by him of a group of employees;

impose penalties on the employers for the violation of available jobs registration procedure;

together with local governments organise public works and placement in the works of the unemployed individuals;

organise works supported by the Employment Fund; and

extend unemployment benefits.

Article 23. The Rights of Tripartite Commissions

Tripartite commissions shall:

consider and give recommendations to the labour exchange on employment policy, labour market regulation, the priorities of social assistance offered to the unemployed, as well as greater viability of the system;

make recommendations on such matters as employment of the population, measures for limiting unemployment, job creation and setting of employment quotas for those who are not in the position to compete with other individuals under equal conditions in the labour market, also vocational counselling of the unemployed citizens and issues of their training and retraining;

regularly consider the activities of labour exchanges and the application of the Employment Fund resources and make appropriate recommendations.

Chapter VI

SUPERVISION OF COMPLIANCE WITH THE LAW

ON SUPPORT OF THE UNEMPLOYED

Article 24. Supervision of the Compliance with this Law

Compliance with the Law on Support of the Unemployed shall be supervised by the State Labour Inspectorate.

Article 25. Dispute Resolution

Disputes arising from the application of this Law shall be settled in court.

Article 26. The Consequences of Illegal Use of the Employment Fund Resources

Persons who fail to disclose a material fact or make a false statement and by reason thereof obtain unemployment benefit or make use of any other measures financed from the Employment Fund must within a month from the application day reimburse the related expenses to the Employment Fund. In the event of a dispute the above expenses shall be recovered into the Employment Fund by legal action.

Chairman

Supreme Council

Republic of Lithuania	Vytautas Landsbergis