I. Povilaitienė. Labor Code Reform: It’s Worth Preparing Now

 

“The Seimas has adopted one of the largest packages of amendments to the Labor Code (LC) in recent years. Although the new provisions will only come into force on November 1, 2026, some employers should prepare much earlier – they will have to review the terms of employment contracts, internal procedures, the organization of remote work and the processes of settlement with employees.

 

One of the more significant changes is the expansion of the possibilities in employment contracts to deviate from certain imperative provisions of the LC, when the employee’s salary is at least two average national salaries (currently EUR 5,053.6). Until now, such a possibility has been quite limited, but from November there will be more space to individually agree on the terms of employment relations, including certain aspects of the termination of the employment contract.

 

However, there will remain areas that cannot be changed by agreements – employee safety and health, minimum rest time, prohibition of discrimination and conclusion of an employment contract. In addition, the probationary period may reach up to 6 months.

 

Changes to the organization of remote work are also envisaged. In principle, the obligation to satisfy an employee's request to work remotely remains in certain cases, but it is more clearly defined when the employer may refuse to do so - if the peculiarities of the work organization or production process do not allow this.

 

At the same time, the documentation procedure is simplified: the employee will no longer need to submit a conclusion from a health care institution - a health care document substantiating the state of health will be sufficient. Collective agreements may also provide for exceptions regarding the compensation of teleworking costs and the establishment or non-establishment of teleworking for employees belonging to groups of employees provided for by law.

 

A new basis for terminating an employment contract is being introduced - dismissal without notice of employees who no longer meet the requirements of impeccable reputation established by law. The reasons for the employer's right to terminate an employment contract at the employer's will are also being clarified - the employer will be able to make such a decision only if he has a justified reason.

 

Important changes are also envisaged in the area of ​​final settlement with dismissed employees. The general rule remains the same - all payments must be paid to the employee on the day of termination of the employment relationship. However, from now on, the parties will be able to agree that the part of the salary or other benefits exceeding the average salary of one month would be paid later - no later than within 3 months of the termination of the employment relationship. This amendment provides more flexibility in cases where the final payments are large and the parties want to settle them in stages.

 

We will also see innovations in the organization of work and rest time. The provisions regarding work on the eve of public holidays, passive standby at home and the choice of the desired working time regime have been clarified. Certain groups of employees will be given the right to choose the working time regime, and the employer will be able to refuse this request only by substantiating it with the peculiarities of the work organization or production process.

 

Another important direction of changes is wider opportunities to regulate employment relations by collective agreements. More areas are planned in which collective agreements will be able to establish rules different from the general provisions of the Labor Code. The role of employee representatives is also strengthened, their rights are expanded and additional guarantees are provided.

 

The reform also affects collective labor relations. Some dispute resolution deadlines are shortened, the maximum fine in collective labor dispute cases is increased, the duration of a warning strike is extended, and the rules for ensuring minimum services during a strike are revised. Additional guarantees are also established for employees who participated in lawful strikes.

 

Although the changes will enter into force only from 1 November 2026, it would not be rational to postpone preparation for them until the last day. It is worth reviewing employment contracts and agreements, remote work procedures, other internal legal acts, procedures for settling with dismissed employees, and collective agreements in advance.

 

Early preparation will allow for smoother implementation of the changes and reduce the risk of practical difficulties or possible labor disputes after the new provisions come into force.

 

The author of the insight is Ieva Povilaitienė, partner of the professional law firm TEGOS.”