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Newsletter 2011 May

  • Lithuania

    18-05-2011

    Labour Law

    Amendments to the Labour Code adopted

    On 12 April 2011 the Parliament adopted amendments to item 4 of part 1 of Article 2 of the Labour Code of the Republic of Lithuania (hereinafter the Labour Code). The amendment additionally establishes prohibition to discriminate applicants for work or employees due to plans to have children. On one hand, the Government of the Republic of Lithuania (hereinafter the Government) did not approve of such supplementation and viewed it as surplus, since the above-mentioned item already had established the principle of equality of subjects of labour law irrespective of their marital and family status as well as factors unrelated to the employee's professional qualities. On the other hand, by adopting such new provision the Parliament targets on the elimination of occasional occurrences of possible discrimination of persons due to their plans to have children.

    This supplement became effective on 28 April 2011.

    On 19 April 2011 the Parliament adopted amendments to Articles 101, 146 and 214 of the Labour Code. The amendment to Part 2 of Article 101 of the Labour Code establishes the provision that the list of competitive positions and the procedure of competitions in public organisations owned by the state or a municipality is set by the Government. Such regulation is aimed at ensuring transparency in the selection of the right candidate and better quality in the management of such institutions. This amendment shall come into force on 1 June 2011. By that date the Government is obliged to prepare and approve appropriate subordinate legislation.

    Provisions of Article 146 of the Labour Code prohibit discrimination of part-time employees. For the purpose of clearer regulation of the application of the part-time employees’ rights and guarantees, the Parliament amended Part 3 of this article by adding that working part-time does not limit such employees’ rights compared to employees who perform same or equivalent full-time work, taking into account their previous work experience, qualification and other factors.

    In addition, the Parliament supplemented Article 214 of the Labour Code by providing that employees who raise children under 12 and work in shifts longer than 8 working hours can request to sum up additional time off every 3 months. This amendment means that such shift-workers will be able to take a shift off during a period longer than one month. For example, twelve-hour shift employees will be able to take a shift off every month and a half, whereas twenty-four-hour shift employees will be able to take a shift off every 3 months.

    The amendments to Articles 146 and 214 of the Labour Code came into force on 3 May 2011.

    Finance Law

    Amendments to the Law on Audit adopted

    On 12 April 2011 the Parliament adopted the Law on Amendment and Supplementation of Articles 1, 2, 5, 6, 8, 9, 12, 13, 14, 16, 17, 18, 20, 21, 22, 23, 24, 27, 28, 30, 32, 33, 34, 43, 44, 49, 50, 58, 59 and the Annex of the Law on Audit of the Republic of Lithuania. Taking into account provisions of the Directive 2006/123/EC of the European Parliament and of the Council on services in the internal market and in order to provide greater freedom to the providers of audit services in selection of the legal form for their activities, these amendments establish that an auditor may perform an audit in a self-employed capacity. It is stipulated that all the provisions applicable on an audit enterprise when performing an audit are mutatis mutandis applicable to a self-employed auditor. Moreover, the amended law no longer limits legal forms of an audit enterprise, as opposed to previous requirement that an audit company can take the legal form solely of an individual enterprise, general partnership, limited partnership, or a private limited liability company.

    The amendments to the Law on Audit have dropped the former requirement for audit enterprises, engaged in audit of enterprises where audit must be conducted according to the procedure established by legislation, to purchase compulsory civil liability insurance. Such audit enterprises (except audit enterprises which perform audit in enterprises of public interest) must insure their civil liability just with general civil liability insurance.

    The amendments have also dropped the requirement for the auditor’s conclusion to be signed by the head of an audit company.

    These amendments became effective on 28 April 2011.

    Amendments to the Law on the Settlement Finality in Payment and Securities Settlement Systems and to the Law on Financial Security Arrangements proposed

    Whereas national laws have to transpose the provisions of the Directive 2009/44/EC of the European Parliament and of the Council (hereinafter referred to as the Directive) by 1 June 2011, the Government submitted the Parliament, by the resolution of 20/04/2011, two draft laws to amend the Law of the Republic of Lithuania on the Settlement Finality in Payment and Securities Settlement Systems (hereinafter the LSF) and to the Law on Financial Security Arrangements (hereinafter the LFSA).

    The draft LSF proposes to establish the institute of an interoperable system and to provide for a duty of operators of interoperable systems to enter into an arrangement with common rules for cross-system execution of payment orders and transfer orders and to determine the moment of irrevocability of such transactions.

    The draft LFSA proposes to broaden the contents of financial security arrangements and to better enable commercial undertakings to use the possibilities of financial collateral by providing that financial collateral can be not only money or securities but also credit claims. Credit claims means pecuniary claims to credit granted by a credit institution, except credit arising out of consumer credit agreements.

    In addition, it is proposed to stipulate in the LFSA the final set-off arrangements as legal instruments. The aim of final set-off arrangements is to convert all the obligations between the parties into a single net amount. To that end, the obligations of the parties to each other are priced, and the party which owes a higher amount must pay the difference to the other party. If such arrangements are enacted, the parties to the arrangement will be able to set-off their obligations by paying only the difference. In performance of the final set-off procedure, obligations of the parties are deemed as due immediately.

    Competition Law

    Amendments to the Law on Competition adopted

    On 21 April 2011 the Parliament adopted the law to amend Articles 3, 40, 42 of the Law of the Republic of Lithuania on Competition and to supplement it with Articles 441 and 442. These amendments provide for personal liability of heads of undertakings with regard to cartel agreements and unfair competition. According to previous regulatory framework, only legal entities as commercial operators could have been subject to liability for infringements of the Law on Competition.

    Pursuant to the amended Law on Competition, a head of an undertaking, who contributed to prohibited agreements between competitors or who abused of a dominant position of a commercial operator, shall be deprived from 3 to 5 years of the right to serve as the head of a public or a private legal entity, to sit as the member of a collegiate supervisory and/or management body of a public and/or private legal entity. Moreover, the Law on Competition provides that a head of an undertaking may be additionally imposed a fine of up to 50 thousand Litas.

    In addition, terms of limitation periods for imposing sanctions on commercial undertakings were extended from 3 to 5 years. Time runs from the day the infringement was committed or on the day it ended in the case of a repeated or continuous infringement.

    With the aim to prevent that commercial operators elude liability for competition infringements by procrastinating investigations, the amendments stipulate for 3 cases of suspension of the terms for imposing sanctions: when the Competition Council performs an investigation, when an investigation performed by the Competition Council is suspended by court or when a dispute is tried in court.

    These amendments became effective on 3 May 2011.

    Transport Law

    Regulations on the Carriage of Passengers and Baggage by Road Transport approved

    On 13 April 2011, the Minister of Transport and Communications issued order No. 3-223 to approve the Regulations on the Carriage of Passengers and Baggage by Road Transport (hereinafter the Regulations). These Regulations replaced the same-titled regulations which were valid from 1997. The Regulations are obligatory to municipalities, natural persons and legal entities. The Regulations are applicable in the carriage of passengers by scheduled, special and pre-booked bus and trolleybus services in the territory of the Republic of Lithuania and by charter automobile services in the territory of the Republic of Lithuania and on international transport routes.

    Other News

    Eversheds Saladžius, in cooperation with the Association of Lithuanian Banks, organised a conference Reforms of the Lithuanian Financial Sector: What changes are expected? Is the financial sector ready for them?. The conference provided delegates from the financial sector with an introduction to the planned reforms and an opportunity to discuss the issues with the experts. Speakers of the conference included Ms Ingrida Šimonytė, Minister of Finance of the Republic of Lithuania, Dr. Audrius Misevicius, Member of the Board of the Central Bank of the Republic of Lithuania, Mr Ramunas Kaklauskas, Head of the Department of Law and International Relations at The Securities Commission of the Republic of Lithuania, Dr. Stasys Kropas, President of the Association of Lithuanian Banks, Mr Andrius Romanovskis, Director of the Lithuanian Insurance Association and Dr. Vitas Vasiliauskas, Chairman of the Board of the Central Bank of the Republic of Lithuania. Conference was moderated by Julius Niedvaras, Director of the International Business School at Vilnius University.

    Should you wish to hear conference audio record or see the presentations, please go to www.evershedssaladzius.lt

    Eversheds Saladžius follows the track of delivering Pro Bono tribute to the society

    Eversheds Saladžius follows the track of delivering Pro Bono tribute to the society. Following the tradition this year we again invited a group of students from Vilnius Secondary School Versme to visit our law firm and get introduced with the legal profession. A very nice company of young people spent several hours enjoying our lawyers acquaintance, discussing on legal issues and having some informal chats. The essence of the project was the visit of high school students with a purpose to gain some direct experience and knowledge from the law firm and its employees.

    Eversheds Saladžius in cooperation with BCC invited to Business Breakfast

    Eversheds Saladžius in cooperation with the British Chamber of Commerce invited to a traditional BCC MONTHLY BREAKFAST TECHNICAL BRIEFING held on 27th April (Wednesday) at Shakespeare Boutique hotel.

    During the Business Breakfast Eversheds Saladžius Associate Milda Aukštakalnytė delivered presentation “Fresh start” for individuals: how, why, when?. The presentation discussed bankruptcy of the natural persons in Lithuania. The issue is in the market air for several years already. Finally, it seems some practical point has been reached: the Government of the Republic of Lithuania has just introduced a draft Law on the Bankruptcy of Natural Persons. The presentation elaborated on the main aspects of the draft law and discussed the possible regulation opportunities.

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