The State Labour Inspectorate (VDI) draws attention to the fact that there is no one solution for all situations arising from sanctions, so it is important for employees to assess their specific situation and know what actions can be taken. VDI aims to inform employees about their rights and encourage them to seek advice or defend their rights in accordance with the procedure established by legal acts if they have questions or encounter possible violations.
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If the employer cannot provide work due to applied sanctions
In general, if the employer cannot provide the work agreed in the employment contract due to objective reasons, not due to the employee’s fault, and the employee refuses to perform other work offered to them (when there is an opportunity to offer such work), the employee should be declared on downtime.
The declaration of downtime must always be related to objective reasons (before declaring downtime, it must be assessed whether it was not caused by the fault of the parties, whether the parties can control the circumstances, whether these circumstances may depend on the employer’s will, whether the employer can influence, etc.). An objective reason is a circumstance of an evaluative nature. Objectivity is assessed by the Labour Disputes Commission (LDC) or the court.
Downtime must be properly formalized, and the employee must be paid for it in accordance with the Labour Code. Therefore, the employee should not be simply left in a situation where there is no work, but it is unclear whether they are working, whether downtime has been declared, and how payment for this period will be settled.
Thus, the employer must either provide the employee with work according to the agreed work regime and working time norm (ensure that the agreed amount of work is provided, organizing it according to the established regime), or, being unable to provide work due to objective reasons beyond the employer’s control, properly and timely make other decisions that do not contradict legal acts: declare downtime, offer the employee to change the work function with their consent (for which work can be ensured), offer to change the working time norm with the employee’s consent, etc.
“An employee cannot simply be left without work without explaining their legal status,” notes I. Piličiauskaitė-Dulkė. “If it is not possible to provide work, the employer must make a specific decision that complies with legal acts. Downtime is one such decision, but its basis must always be real and objective.”
If there is no work, but downtime is not declared
If the employer does not provide work to the employee but does not formalize downtime and does not pay for the period, the employee can apply to the Labour Disputes Commission (LDC).
The Labour Disputes Commission can be asked to assess the specific situation, including whether the period during which the employee was not provided work due to reasons beyond their control should be recognized as downtime, as well as to award the wages and other amounts due to the employee for this period.
The Labour Disputes Commission examines individual labour disputes regarding the conclusion, performance, and termination of employment contracts, as well as non-compliance or improper compliance with labour law norms. The LDC can order the employer to restore the violated rights of the employee, award the amounts due to the employee, compensation for material or non-material damage, and in cases provided by law – also penalties or fines.
This means that even if the employer has not formalized downtime, the employee is not powerless – they can defend their rights by applying to the LDC.
If the employer wants to dismiss the employee because the work function is no longer needed
If due to changes in work organization or other real reasons related to the employer’s activity, the employee’s performed work function becomes redundant, the employer may terminate the employment contract under Article 57 of the Labour Code.
In such a case, the employee must be properly warned. The general notice period is 1 month, and if the employment relationship lasts less than one year – 2 weeks. Longer notice periods apply to certain groups of employees.
When terminating the employment contract under this article, the employee is entitled to severance pay equal to 2 average wages, and if the employee worked less than one year – severance pay equal to 0.5 average wage. Therefore, simply telling the employee that there is no work in the company due to sanctions is not enough: the termination of the employment contract must be properly formalized and the guarantees established in the Labour Code must be ensured for the employee.
Moreover, the employee may be prohibited from working during the notice period, but full pay for this period must be paid.
If the employee wants to terminate the employment contract themselves
The employee can also decide to terminate the employment relationship themselves. However, it is important to know that the guarantees and severance pay due to the employee depend on the chosen ground for termination of the employment contract.
For example, if downtime has been declared to the employee and it lasts for more than 30 consecutive calendar days, the employee may have the right to terminate the employment contract under Article 56(1)(1) of the Labour Code, notifying the employer 5 working days in advance.
In such a case, the employee is entitled to severance pay equal to 2 average wages, and if they worked less than one year – severance pay equal to 1 average wage.
Therefore, employees who want to terminate the employment relationship as soon as possible and register with the Employment Service quickly are advised first to assess on what grounds the employment contract will be terminated and what guarantees will apply in such a case.
If the employee terminates the employment contract on their own initiative without important reasons under Article 55 of the Labour Code, severance pay is not due.
“When rushing to end the employment relationship as soon as possible, it is very important not to choose a less favorable ground for the employee just because it seems simpler. Different grounds for termination of the employment contract entail different guarantees, so before making a decision, it is worth assessing all the circumstances of the specific situation,” emphasizes I. Piličiauskaitė-Dulkė.
If it is impossible to contact the employer and the employee wants to terminate the employment contract
If the whereabouts of the employer or their representative cannot be determined, the employee can apply to VDI – submit a written request for termination of the employment contract. A sample request can be found on the VDI website.
If the whereabouts of the employer or their representative cannot be determined within the established period, VDI issues a certificate stating the termination of the employment contract.
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Important to know: when terminating the employment contract on this basis, if the whereabouts of the employer cannot be determined, severance pay is not paid to the employee.
Therefore, this may be one way to end practically non-existent employment relationships faster, but the employee should assess that in such a case they will not receive severance pay that could be due when terminating the employment contract on another basis provided in the Labour Code.
If the employer does not pay wages
If the employee’s wages are not paid on time, they have the right to apply to the Labour Disputes Commission for unpaid wages, penalties, and other amounts due.
If the employee’s full wages are not paid for two consecutive months or more, the employee may have the right to terminate the employment contract under Article 56(1)(2) of the Labour Code, notifying the employer 5 working days in advance. In such a case, the employee is also entitled to severance pay established by law.
When wages or other payments related to the employment relationship are paid late due to the employer’s fault, the employee who has not yet been dismissed must be paid penalties together with the late payment. The current penalty rate is 0.1% for each day of delay.
If the employment relationship has already ended and the employer fails to settle on time not due to the employee’s fault, the employee may be entitled to fines, the amount of which according to Article 147(2) of the Labour Code is related to the employee’s average wage and the delayed settlement period.
Therefore, even in cases where wages or other amounts due to the employee are not paid due to sanctions applied to the company, the employee can apply to the LDC and demand that their rights be assessed and the amounts due to them, including statutory penalties or fines, be awarded.
If the employee is entitled to payments but the company’s funds are frozen
The employee’s right to wages, severance pay, or other payments due and the actual possibility to make the payment due to applied financial sanctions are two different issues. The employee’s right to certain monetary amounts is recognized by the LDC (or court) decision.
If the payment due to the employee cannot be made due to financial sanctions applied to the company or frozen funds, it is important to find out whether in the specific case it is possible to apply an exception provided in international sanctions legal acts or obtain permission to make the payment.
Important to know: employees can apply to the Financial Crime Investigation Service (FNTT) regarding the possibility to apply an exception to financial sanctions or obtain permission to make the payment.
FNTT coordinates, supervises, and ensures the implementation of financial sanctions, including restrictions on the disposal of funds and economic resources, in Lithuania. FNTT indicates that entities subject to financial sanctions and other interested persons can apply to FNTT for exceptions or permits. The request must be motivated and based on specific factual and legal circumstances.
It is important to understand that FNTT does not decide on labour disputes regarding the amount due to the employee but on the possibility to make the payment when financial sanctions restrictions may apply. Therefore, FNTT should be approached with LDC decisions and awarded amounts.
VDI: employees should not be left in the dark
“We understand that due to international sanctions applied to companies, employees’ situations can be very different. Some are declared on downtime, others continue to work, and yet others do not receive work and at the same time do not receive clear information from the employer,” emphasizes the Head of the Labour Law Department and stresses that in this case it is especially important not only to know one’s rights but also not to be left in the dark.
VDI reminds that if the employer cannot provide work to the employee due to objective reasons, in general, the issue of downtime should be resolved. If the work function becomes unnecessary due to changed circumstances, the employment contract can be terminated observing the notice periods established in the Labour Code and paying the severance pay due to the employee.
At the same time, the employee who wants to terminate the employment relationship faster can choose another ground for termination of the employment contract provided in the Labour Code, but in such a case it is important to assess what guarantees will apply to them.
Important to know: the most important thing is that the employee should not be left in a situation where they do not know whether they have to go to work, whether downtime has been declared, whether the employment contract is valid, and when they will be paid.
Even in cases where the employer has not formalized downtime due to sanctions, does not pay wages or other amounts due, the employee can apply to the Labour Disputes Commission. The LDC can assess the specific situation, decide on downtime, wages and other payments due to the employee, as well as, in cases provided by law, on penalties, fines, or compensation. Information about the LDC can be found on the VDI website and .
It should be reminded that if the problem is related to frozen funds and the possibility to make payments due to financial sanctions, employees should apply to FNTT regarding possible exceptions or permits for sanctions.
What is important for the employee to assess?
- Is the employment contract still valid?
- Does the employer provide work?
- If there is no work – has downtime been properly declared?
- Is downtime paid according to the Labour Code requirements?
- Does the employer properly communicate about the situation?
- Does the employee want to terminate the employment contract themselves?
- If the employee wants to terminate the employment contract themselves – on what grounds will it be done and will severance pay apply?
- If wages or other amounts due are not paid – is it necessary to apply to the Labour Disputes Commission?
- If amounts due to the employee cannot be paid due to frozen funds – is it necessary to apply to FNTT for a possible sanctions exception or permit?
Important to know: international sanctions do not eliminate employees’ rights and guarantees, but the specific situation must be assessed individually, taking into account both labour law and sanctions requirements.
The information is prepared based on currently known circumstances and is of a recommendatory nature, so each specific situation should be assessed individually, taking into account the factual circumstances and applicable legal regulation.
If you have questions about your situation or employee rights, you can consult with VDI. Consultations on labour law issues are provided by phone +370 5 213 9772, and you can also submit an inquiry in writing. More information about consultation methods and services provided by VDI can be found on the VDI website.
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